Uber has the distinction of having its company name enter the English language as both a verb and noun: ‘Let’s uber to the restaurant’, and ‘We’ll grab an Uber’. Like Kleenex and Band-Aid before it, Uber is sliding into the world of the generic. And guess what? It still hasn’t made a profit (unlike Kleenex and Band-Aid, I might add).
Investors invest in companies – whether they are ride-hailing ‘platforms’ or job boards – because they expect, at some point, to realize a profit. They want their $1M to turn into $25M. Sometimes investors are patient – think about those Amazon investors waiting all those years as the company relentlessly plowed their earnings back into operations – and sometimes they are impatient.
But sometimes investors get a better look at what their chosen company is doing – and they say, ‘What the heck? We don’t see any road to profitability!’ That’s usually when they get nasty.
Uber – who, it must be said, can’t seem to decide if it is part of the ‘sharing economy’, a gig ‘platform’, a ride hailing and logistics company, or something else entirely – is casting about for the fabled road to profitability. It has shown that it can lose hundreds of millions of dollars with ease. It has shown that it can generate millions of dollars for its founders while its ‘non-employees’ end up with the equivalent of $10-15/hour. But can it actually run itself as a profitable business?
Last year rumors swirled that Uber was working on a staffing business. Well, turns out that it was actually working on a – wait for it! – shift-work-finding app. Wow! We’ve never seen one of those before, have we? Well, I mean except for Syft, Gig, Bacon, JobToday, Shiftgig, and a few others. Uber wants staffing firms to use its somewhat non-revolutionary app to find and manage their workers.
And of course, Uber hints that this will for sure put it on the road to profitability.
If I was an Uber investor – which I’m not – I would be skeptical. Compare them, for example, to ZipRecruiter. Zip grew organically, then took an initial $63M investment and grew faster, and the whole time it was profitable. It did not become part of the English language (yet?) but I suspect its investors are much happier that Uber’s are.
So keep this tale of Uber-idiocy in mind if or when you decide to embark on the solicitation of investors and the fabled path to profitability.[Want to get Job Board Doctor posts via email? Subscribe here.].