All the speculation around the turmoil over seems to be missing one key component. I think a bigger driving force then this sexual harassment and CEO antics is the waymo lawsuit. Uber itself has acknowledged that without self-driving capabilities the company will most likely not find profitability. From reporting I've read, it appears the waymo lawsuit has a high probability of success.
If the waymo lawsuit essentially forces Uber to start its self driving program back from scratch then the path to self-driving viability has essentially been scrapped. To me, this is a better explanation of the recent spat of high-level exits from the company.
Uber doesn't just need self-driving cars, they need driverless cars. That's ten years away, and there's no way Uber can sustain its losses for that long. It's an investment Ponzi scheme, and it's losing steam. When it collapses, it's going to take a big chunk of the tech private equity market with it.
This is my assessment as well. People at the c-suite level had to be aware that viability of the company is highly reliant on the magical thinking that they could get to market with driver-less tech before the VC money runs out. The (very real) prospect of complete restart of that research program has likely freed them of the fantasy.
I'm not totally discounting the PR issues as a partial cause of the exits. As a c-level employee, you (more than most hires) have to answer for rotten company culture. I also, however, think both issue (lawsuit and PR issues) make it untenable for the current batch of executives to stay on.
Ponzi schemes pay out large returns in the short-term, making you think it's a good idea to put more money into them. Uber has done one better, and paid no one anything in terms of returns, yet still collected billions in investment.
"Ponzi scheme" apparently is just invective that can refer to any sort of market failure now, not necessarily the actual Ponzi scheme type investment fraud such as that which Charles Ponzi carried out.
In this particular example, remember that Charles Ponzi's books were totally fake; outright fraud. That does not characterize other phenomena such as other things like speculative bubbles or simple investment gambles that don't pay off. In contrast the Bernie Madoff scam is a recent example of an actual Ponzi scheme.
The subsidized ride thing is pretty crazy too. Uber offered me the ability to pay them a fee, then get a number of flat rate rides. I got a ten pack, used it to go across my city (a 25 dollar ride normally, even with pool) for 2 bucks. I think they lost a grand total of 200 bucks on me alone, and I haven't touched the app since then. Switched back to Lyft when they offered a saner version of the same thing.
> they need driverless cars. That's ten years away
Maybe in the US. But Uber is everywhere. Given their penchant for "bending" the law, I wouldn't be surprised if they start deploying driverless cars in places with more lax regulation, which will 1) help their bottom line, 2) give them more training data, and 3) prove it works to make regulatory issues easier in the US.
That's of course if they can keep their tech, which seems less likely given the waymo suit.
I don't believe they are required to make a deal. However, their parent company is a big investor in Uber, so they have some incentive not to drive the Uber into the ground.
This could be the next IBM PC license if Waymo owns the tech that all driverless cars need to operate. They don't need to make much money off Uber, they need to get their tech out there into production so they can refine it before their competitors can get to market.
As someone trying to raise right now, I am very concerned that this is going to implode the entire industry. An Uber collapse will set off a panic as people wonder who else is swimming naked. It will also tank the return on any VC fund of which it is a part, leading to a whole round of terrible VC returns.
Yes and no. The problem is that panics affect the entire market and have cascading follow-on effects. Not only does this affect fund raising but it also affects the entire tech economy, and thus the ability to convert new customers if your customers have anything to do with the tech economy.
We are fine if we can't raise more, so I am not panicked... just concerned.
Is your theory that absent subsidies no one would prefer an Uber over a taxi? Because if not, presumably Uber could just raise prices and hunker down for 10 years. (Assuming they survive lawsuits and assorted revelations) Is their another clock that prevents them not just from not just growing, but existing?
Not a clock, but potential competitors. The barrier to entry is simply too low. For example, look how quickly Fasten/Fare/etc appeared in Austin after Uber left.
As a product, ride sharing is not quite a commodity, but it's not far off either. As a consumer, I care more about what the product does (a better taxi service) and how much it costs than exactly what company is providing it. Absent artificial constraints (e.g. taxi licenses) it's never going to be a high margin business.
So yes, they could hunker down and "exist", but that doesn't seem like a viable strategy to the get the kind of projected growth their current valuation depends on.
It's hard to see what inherent long-term advantages they have. Their core business is already a commodity. Even if they somehow get usable driverless tech better/faster/cheaper than anyone else, at some point that will become a commodity too. When that happens, there won't be much left on which to compete beyond price.
You bring up some good points. But I think it's important to not forget that Uber has been around 2009, and wasn't spending their entire time trying to achieve driverless vehicles.
Don't doubt for a second that there is a ton of engineering that went on in Uber's app that allows it to handle scale. For example, I was in Austin a few weeks ago and used RideAustin. Same experience as Uber. Then I read on the news that the weekend of SXSW, the entire app was basically crushed from the volume of ride requests and couldn't service anybody.
And besides, who wouldn't use Uber if it cost the same amount as a taxi? For me, the advantages of Uber has always been the quality of service. The drivers are nicer, the cars or cleaner, the drivers don't demand tips nor insist at the last minute that their credit card machine doesn't work at the last minute.
And most importantly of all, I would argue that Uber's inherent long-term advantage is their brand. Anywhere in the world that has Uber, I get the same service. I can go to Honolulu and Uber works the same. I just open the app, punch my destination in, look for my driver and go. Same if I was in Mexico City. Same if I was in Delhi.
However, the same is not true for taxis. In certain places (notably South East Asia as a tourist), you agree on a certain fixed fare before getting into the taxi. In the United States they expect tipping, whereas other countries may not. They might insist their credit card machines aren't working in Toronto. There's no accountability of the driver, no GPS trip details in the app...the list goes on.
I think that kind of brand and user experience is highly valuable.
I personally think they could get away with raising prices, but then the drivers would become their customers, and profit margins for Uber as a dispatcher would be driven very thin---it's just not that hard to run a GPS-driven dispatch service. The only thing that makes an Uber an Uber is a window sticker and an app on the driver's phone. How long before there's an uber-Uber that just sends your request to all the dispatch services and the first one that shows up gets your fare?
> How long before there's an uber-Uber that just sends your request to all the dispatch services and the first one that shows up gets your fare?
There already is an app for this, with over a billion existing users: Google Maps.
If you search for directions in London, there's a "ride hire" tab next to public transport. It gives you price estimates for Uber, London official taxis, and Hailo - all booked with a button from Google Maps, never having to open the Uber/Taxi/Hailo app.
Yeah - I dislike Uber's tactics as much as the next guy, and the Waymo lawsuit is nuclear.
But they're spending money like crazy because they still feel like it's getting them "upwind" in ways that will be lasting. New markets, and market dominance in existing markets.
If they scaled back their immense outflows, and used profitable markets to subsidize less profitable ones, I'd bet they could be profitable.
While I wouldn't literally describe Uber as a ponzi scheme, I think you are right in the figurative sense. It usually helps to make that distinction. But yeah, it's hard to not see Uber running into a massive liquidity crisis at some point in the next deaced. The company is only viable to the extent the private capital markets allow it to be. I don't think it has any hope at all of accessing public markets.
What's the difference between driverless and self-driving car? The ultimate goal of self-driving car is driverless. Current state of the art does require a driver to be with the car.
And years of regulatory red tape. Moving from current -> self-driving legal and regulatory framework will be one battle. Moving from that to a driverless model will be much larger.
And those updates have to percolate through federal, state, county, and city level regulations. Making it an inherently slow process.
I agree, and I think that's also good for driver and traffic safety. As I mentioned a while back, in case of traffic light going dark, officer has to stepped in to regulate the traffic. Current self-driving car is not capable of handling that without any faults. Among cars, they need to negotiate who to move first on a all-away-stop sign. Self-driving cars need to be able to get data from government relating traffic condition. Currently we all rely on GPS data to determine whether there's congestion or not, as well as user's input (Waze) but that's far from enough to be 100% driverless.
Dataset availability is really really poor today. We can move with great confidence on known conditions, but so many edge cases remain to be solved.
But the end goal is that as a driver of my own car, I can just sit in the passenger seat. As a passenger of a taxi, similarly, I expect no driver.
The ultimate goal of self-driving car is to be driverless. But, if you want to produce a car without driver seat & steering wheel, then yes, from that perspective, driverseat-less car is different from self-driving car.
It's not about the seat, it's about whether or not a driver needs to be in that seat. Lower levels of autonomy need a driver to be able to step in. That is self-driving, but not driverless.
As I said three times already, self-driving car ultimately doesn't need a driver to be on the steering wheel. Why is it so hard to understand that? That's the whole idea of self-driving car.
Groupon went public, and their stock went from $26/share to $4. If the same thing happens to Uber in a down round, that's pretty much the definition of collapse.
Without saying whether I think such a thing is likely, Uber compensates significantly with stock, and they cannot retain talent if the trust in the cashout goes away.
Maybe I'm being naive but how can a company that replaces a whole layer of management and overhead of traditional Taxi companies by an App not reach profitability? Is maintaining an app that expensive? I can't imagine.
> By contrast, in the hundred years since the first motorized taxi, there has been no evidence of significant scale economies in the urban car service industry. That explains why successful operators never expanded to other cities and why there was no natural tendency towards concentration in individual markets. Drivers, vehicles and fuel account for 85% of urban car service costs. None of these costs decline significantly as companies grow. As the P&L data above demonstrates, Uber has not discovered a magical new way to drive down unit costs.
Sweden famously deregulated their taxi industry. American taxi regulations are awful--I can't compare them to other countries, but they're terrible in an absolute sense, and they vary widely by city. In New York, they even change depending on where you are and what color the taxi is (yellow ones and green ones have different rules). So all these city-by-city variations become a big diseconomy of scale.
The reason for the US' horrible state of affairs: corruption. Ever since regulation of the taxi industry started, the 'players' in each city decided to use this artificial constraint to enrich themselves. Medallions (the right to drive a cab in a city) were doled out to the politically connected, who, in turn, rented them out to the actual workers (drivers) for a tidy sum. It was a great scam.
If there's one positive thing about Uber, it's that they brought an end to this medallion monopoly.
The medallion system helps create gypsy cabs. If starting a legal and licensed taxi service just required filing the same type of paperwork as any other similar company, and becoming a regulated taxi driver was more like becoming a truck driver you'd probably see a lot less gypsy cabs.
In NYC, that's exactly how it works, just pass a simple test and do some paperwork, and you can drive a cab. Medallions only restrict cabs that are permitted to take street hails in lower manhattan -- as long as you don't do that, there's no limitation on numbers of cars.
Uber and related apps are a bit overrated in terms of their "innovation."
You see, Uber-like "radio dispatch" services have existed in the NYC area for decades, but they used regular phone voice calls, not apps, which was slightly less convenient, I guess, but barely. It was not really qualitatively different IMHO (you waited about the same amount of time, and have about the same amount of certainty about the fare and whether they'll show up.). In fact, it could arguably be easier, as you didn't have to sign up for an account, download an app, set up payment method ahead of time, you just dialed a phone number
The only real innovation ridesharing apps have brought IMHO, are carpooling options like UberPOOL, Via, etc. This was not as practical to do before apps that could automate the dispatching and matching involved
I suspect that you have never actually used a phone-dispatch car service in NYC. You have no visibility into their ETA. Call back and ask... the answer is always the same "5 minutes".
I've used it tons of times. I grew up around here. You're right, you don't have much visibility into the ETA. I THOUGHT that was an advantage of Uber, but it's not -- I've sometimes called Uber and they blatantly lie, bait-and-switching about ETAs (eg, 3 min before I click, then it becomes 12min). Also, dealing with the ETA is easy. Wait 6 minutes, if they don't show up, call a different car service. The problem will take car of itself.
The "best" part about Uber is they penalize you for waiting too long to cancel your Uber so if the guy takes three times as long as promised and you cancel then you are charged the cancelation fee.
Yep. San Francisco has been utterly inundated. The last estimate I saw was ~48,000 more vehicles from the app services. Most of those are additional, because they are coming in to the city to drive (e.g., the drivers don't live here).
Important to keep in mind that that is not only a lot of cars for SF, but also that they aren't just driving a bit and parking. They're driving and driving (and driving and driving), when they're not blocking traffic picking up or dropping off.
In urban areas there are good reasons for restrictions on numbers.
One imagines the cost of complying with labor regulation in those countries makes for better economies of scale. I agree that "seldom in the U.S." is more precise, though.
robot driven electric powered vehicles that operate 24/7 (minus maintenance and recharge time) are a major way to gain efficiencies in drivers/vehicles/fuel. the nature of an automated ride hailing service, also, gains efficiencies in densely populated areas. it doesn't quite reach economy-of-scale level stuff the way a manufacturing business does, but there are definite efficiencies that Uber (and their competitors) are aggressively pursuing.
The parent comment on which this thread is based is arguing that Uber's elimination of top-heavy management in traditional taxi companies is so great that they should be able to profit even if they never achieve self-driving cars. Clearly if they can entirely eliminate the cost of labor it complicates the question.
That seems like a strange conclusion considering Uber doesn't even pay for the vehicles and fuel.
UberPool is one pointed example of scale economics working. Another would be Uber's brand encouraging more riders and the ability to scale into smaller markets that taxis normally couldn't service.
> That seems like a strange conclusion considering Uber doesn't even pay for the vehicles and fuel.
Well, they do, indirectly, in that that is part of the money the driver is paid. Yes, one way they've improved the numbers is squeezing their drivers more, but they can't do that forever. They're already encountering a lot of pushback.
I question the claim that Uber is serving a bunch of small markets that traditional livery services do not. Do you have an example?
Not OP, but I can say from personal observation/experience that while not 'small', Uber has increased taxi use in the general sense in Texas cities that are so car-centric and-or sprawl-like that traditional taxi services were never really popular (Houston, Austin, Dallas, etc) - having more drivers available in an ad-hoc manner has made the dispatch time much more reasonable (minutes vs a hit-or-miss scheduling ordeal of ~1h) and so using taxis (e.g. Uber) as a viable means of transportation, especially for things like social events, is much more common than it was before. I suspect the same is likely in similar places where 'everyone has a car' and the geography is very spread out.
For example, Boca Raton in Florida is a wealthy area that had no taxi service until Uber. You literally had to get a limousine to go somewhere. Now its simple and cheap to get an Uber.
The point is that you can get a $5-10 Uber ride instead of before where you'd spend $100+ on a limousine ride that you need to arrange well ahead of time. It wasn't a realistic option before except for special occasions.
Simple economics argues you are wrong about the costs aspect of things here. Do you think drivers are simply doing public service? Perhaps they have special gas pumps that are 30% cheaper?
Traditional taxi companies are now increasingly employing 3rd-party apps which function much like Uber's. In many US cities, the "Curb" app will hail you a regular taxi cab and allow you to pay for the whole thing through the app (including tip, even if you just happen to hail the cab without opening the app).
Uber's long-game, and the reason they've been funded so handsomely, is the autonomous taxi plan.
Its a pity that taxi companies were so slow to adapt to Uber by providing convenient ways to summon and pay for a cab. All that people really want is to get from point A to point B without a hassle.
Talking about Sweden Uber is just another taxi company here. It's not possible to provide taxi service without having a license. Uber has to comply. Still it's more convenient to use their app because it has better UX than everything else on Swedish market.
Which isn't hard to replicate or improve upon. Is Uber fighting the local government in Sweden to have less regulation too? It seems that's what they are doing here (Brazil).
I don't think so. They have already lost one legal battle and it's really hard for a corporation to lobby the government due to a lot of reasons: trade unions involvement, prevailing social-democratic mentality, one of the lowest levels of corruption in the world (4th place, probably related to the mentality).
, (social-democracy and one of the lowest corruption levels in the world).
I have yet to see one of those app's come even close to replicating the experience that uber brings. It's one thing to have an app, it's another thing to have a well designed app with consistent policies that are followed the same by every driver.
Any time I've had to use an uber clone apps (from a traditional taxi service, not lyft) they haven't instilled a lot of confidence in me to how reliable they are.
> consistent policies that are followed the same by every driver.
This was the most amazing thing about Uber, to me. I live in Boston and used to take cabs all the time pre-Uber (still take the occasional cab from the airport). Cab drivers are rude, frequently claim the credit card machine is down (despite violating city laws saying they're literally not allowed to drive with a broken CC reader), take the long way / detours to run up the meter, air conditioning or heating might be broken, the cars are dirty, no real recourse for bad service. Even if they have a GPS, drivers refuse to "waste time" by typing in your destination address and require turn-by-turn directions. I'd call a cab and it was hit or miss whether they'd show up or not. I even had a cab driver threaten to call the police when I didn't have cash after he tried to claim that Boston was "cash only" on Saturday nights -- and he was driving me to my HOME in the South End, so it should have been pretty clear I wasn't a tourist unfamiliar with local laws.
Even with the most well-designed and reliable app in the world, cab companies can't compete with Uber -- it's the service and consistency that really made it take off.
Yep, agreed. I've literally been hijacked and taken to an ATM before by a cab driver who clearly had a VISA sticker on the window of his car. While uber seems pretty evil these days, I just can't risk the unreliability of traditional cab services.
Do you think cab drivers have gotten better since Uber came out? I only take them from the airport occasionally now, but the biggest thing about pre-Uber taxis was the service issues.
As I've learned while participating in these discussions is that all of this is HIGHLY localized. The issues you have with taxis and/or Uber will not make sense in other places with different regulations, better apps, etc.
Almost every regular/licensed taxi I take here, the driver has Uber/Lyft/99Taxi app running simultaneously so they can reach more clients. In that case, it's the same quality of service as before (which is just fine where I live, so Uber/Lyft aren't disrupting anything here).
True. Escaping the law, sexual harassment of employees and low wage to drivers aside, it will still make me feel very inconvenienced to see Uber go out of business. Not even Lyft comes close to how good and fast the Uber app is. I was sold the first time I used it. I just hope some other company steps in to fill in the void.
eCab in Vancouver is getting pretty close. The app's technology is all but reliable, but where the problems still exist are when demand is high and taxis (by the very nature of being limited) are unable to meet it.
That was effective in cities with good (or any) taxi service. In Pittsburgh, Uber and Lyft have utterly changed people's ability to get around the city.
One Saturday night we wanted to go out to a place 10 minutes away. We called a taxi cab around 7:30/8:00. We were told that it would be between 2.5 and 3 hours for a cab, if one came. We were considered "out of the way" when we were a 10 minute ride from downtown/the main bar area in the city. Forget about getting a cab back from those bars. We used jitney cabs all the time to get home. Yellow cabs wouldn't bother or were too infrequent.
I remember jitney's in Pgh !! In the 70's I used to ride in jitney cars with my mother to get back from the grocery store. In some cities, "jitneys" are called "hacks"-- unlicensed cab drivers driving their own cars. Perfectly safe if they're neighborhood folks that you know.
There used to be a similar/related practice called "slugging" as well, it seems to have faded as Uber rose up.
Great point -- ridesharing apps have genuinely contributed something important in areas that didn't use to have much taxi service. My point is limited specifically to big cities that already had decent service -- in those places, there wasn't a significant improvement brought by Uber and friends.
5 minutes would be fine. But sometimes it was more like 45 minutes to an hour. You wonder if a cab is ever going to show up. That's why I started using the apps - you know the driver can get in touch with you and you can see where the car is.
For me this can be problematic in my second language, and near-impossible in my third, fourth, and fifth languages. I travel a lot and it is the only time I ever use Uber.
> Maybe I'm being naive but how can a company that replaces a whole layer of management and overhead of traditional Taxi companies by an App not reach profitability?
They employ more than 2000 Engineers, many of them in the Bay Area. Those cost easily more than any manager in a Taxi corporation..
Yep. Amazing how you need 2 thousand engineers just to make an app (which is already made) and run some servers (which are probably hosted on AWS anyway).
Well, the greyball program took some real coding and testing out to implement as it was reported. From the point of view of 'if you see one cockroach scurry on the floor, your walls infested with them' then we can make an educated assumption that there are more 'secret' projects they may be working on to further obstruct justice (highly dependent on location). The question is then: How many coders work on the core app, how many worked on the greyball section, how many worked on the self-driving cars (auto-automobile is maybe a better term for these vehicles, but not by much), how many does that leave left? Take that answer, assume that the greyball is average the number of coders on a 'secret' project (very very dubious to do this, but what other data do you have?), and then you have an estimate on the number of other 'secret' projects they have going on and what their abilities are as compared to your cadre of coders. Then try and steal them if they are doing better than your folks, now is a good time to invest in their coders before the crash and rush for them happens.
You don't need thousands of engineers to keep a mobile app up-to-date, and the driverless vehicle thing is a boondoggle as there's already other companies doing that work, which are much better at it (Google, GM, etc.), and don't need tons of VC for such a risky endeavor.
In your opinion, is work not worth doing if those mammoth companies are pursuing it?
Also, you say it is a risky endeavor. Would you argue that the driverless vehicle is not an inevitability? I would certainly argue that betting on Uber to come out on top is risky, but that doesn't mean there isn't money to be made.
>In your opinion, is work not worth doing if those mammoth companies are pursuing it?
Depends on what it is, and what kind of resources you have. In this case, you're talking about a massively difficult task (between the technical and regulatory aspects and the safety-critical nature), and at least two mammoth (i.e. well-funded internally) companies are already working on it. What exactly is a company with zero expertise in the field (a mobile app? Please), with absolute reliance on VC funding, likely to bring to the table? A lot of risk, that's what.
Yes, I think driverless vehicles are probably an inevitability, but I wouldn't look to Uber to come out on top here, any more than I expect Tinder to come out on top in asteroid mining.
Saying that if they're not working on self-driving cars, then they must think self-driving cars aren't worth pursing is a non-sequitur. Every Uber I've been in has had music playing, why don't they buy some satellites and build a SiriusXM competitor?
Uber isn't even profitable with their core business of being a not-quite-taxi company. They quite obviously don't have the money to build their own self-driving cars, too.
I wonder if they were just overzealous in hiring and don't actually need all those employees, but now can't let them go because of the impression that would give to the industry/equity holders. Large staff cuts usually do not instill confidence in investors, even if that staff literally isn't required.
Their backend consists of hundreds of microservices that are frequently breaking, so it's more complex than just an app and a basic backend on AWS. Also they have been doing a lot of massive refractors in the last couple years, so they need lots of people for that.
I would imagine most of the complexity is from handling a massive number of requests from around the world, and needing all of their data to be backed up and secure. They have their critical data backed up to like 10 different servers, when your dealing with scale like they are things get complex really quick.
The problem is not competition from traditional taxi companies (they do indeed replace taxi companies' management structure) but other ride sharing companies, ie Lyft. Uber has only managed to stay ahead of Lyft by undercutting Lyft's prices, incurring severe losses in the hope that as soon as they have self-driving cars they will be able to become profitable by eliminating one of their main expenses, the drivers themselves, while maintaining lower prices than Lyft.
Without self-driving cars, that strategy isn't sustainable, and so eventually Uber will find itself unable to maintain its advantage over Lyft.
> Uber has only managed to stay ahead of Lyft by undercutting Lyft's prices, incurring severe losses in the hope that as soon as they have self-driving cars they will be able to become profitable by eliminating one of their main expenses
I think someone should pause to note that, if true, this is one of the dumbest long term business strategies in the history of high finance.
This idea, apparently, is a bet on a technology that not only doesn't exist, but is extremely highly regulated, that the company has literally no demonstrated core competencies in, hasn't been even successfully prototyped, that represents the hardest most complex use case of the technology, and is obviously years away at best, but yet it justifies a policy of losing billions of dollars in the present just to get market share when the costs of switching brands are literally so non-existant that a typical customer often does it several times in a single evening out.
Maybe it's my old age and having lived through the first dotcom crash, but it seems to me that even when you feel like the only person who sees that the underlying business logic is nonsensical magical thinking, it's still quite possible you're correct.
You aren't alone in that thought. Being privately held the financials are opaque enough that no outsider knows for sure how much of the spend is subsidizing the low prices, versus being used for expansion and R&D.
The leaked data from Naked Capitalism is really the only data outsiders have at their disposal: http://www.nakedcapitalism.com/2016/11/can-uber-ever-deliver... The use of EBITAR (vs EBITDA) makes it difficult to draw real conclusions, though the fact that they use EBITAR at all is suggestive on its own.
However, something as epic as self-driving cars are one of those things that come once every two generations. SDCs, if achieved, have the potential to change the entire American way of life and massively disrupt society. Start-ups love to disrupt and this would be the mother of all disruptions.
So, for that reason alone, I think firms are willing to bet a sliver of their portfolio. If I was a family office I certainly would do so.
Right. But it's the second half of the business strategy that I outlined above that's key to the discussion, ie the idea that paying billions of dollars for market share in this field makes sense. That's literally crazy, the network effect and lock-in at scale is really modest at best.
Sure the more cars you have the better the service can be, but it's trivially easy for a competitor to come along at any time and attack your most profitable market segment in a given city, and trivially easy for any customer to switch as easily as clicking on a different app and glancing at the estimated time and price. That's going to be true forever, this isn't a market that will ever have a defensible monopoly position.
Investing some amount to hedge in self-driving cars could conceivably be defensible, but looking at what's going on it feels like that's more of an rationalization for their present behavior.
They've been lighting money on fire subsidizing rides for a few years, and have hunted around for a plausible excuse. One is the "pool" functions, as that has a slightly more plausible network effect story, and the other is self-driving cars.
Both appear to be post-hoc rationalizations designed to provide some plausible story for why they need to borrow another couple billion dollars.
I wouldn't say it's trivial for a competitor to take over.
The Uber app is still best-in-class, and all my friends now say "Get an uber" instead of "Get a cab" because the UX is so much smoother.
Generally it's extremely difficult to dislodge an incumbent from a market slot. Newcomers can only compete on price, UX, and brand recognition. Ideally all three need to be significantly better than the incumbent to have a hope of taking over. Without all three the best a newcomer can hope for is a small slice of the pie.
So market share definitely has value in the abstract. Unfortunately in Uber's case it has negative economic value because of the costs/subsidies.
Then again I suppose it's possible Uber has always been a cunning plot to take VC money and spend it on subsidised transport. If so, it's definitely been a success - for now, at least.
What you are saying is right about Uber's current business. But that is not true for self-driving cars.
The infrastructure costs of deploying a fleet of cars to compete with Uber if they gain market share will be massive, all but assuring they will hold a monopoly position for years unless a decentralized competitor could actually become reliable quickly (I doubt it).
Once you have a self-driving fleet sure, you can start printing money, but it makes no sense to sacrifice revenue today by starting an unsustainable price war long before the tech is ready. All this does is shorten your runway, and you don't even know how long a runway you will need, given that reliable, fully autonomous driving is so hard.
> Once you have a self-driving fleet sure, you can start printing money
Why?
Are drivers who make $10-15 an hour so ludicrously expensive that saving that money fundamentally changes the business?
Are the carrying costs and maintenance costs and depreciation costs of self-driving cars likely to be lower or higher than the cost of a 2017 Toyota Camry? How about the regulatory and insurance costs?
Is there likely to be some magic secret that allows one company to dominate self-driving cars, or will it resemble the historical markets for transportation devices, whereby there are dozens of companies who make different offerings of similar technology, and a network of component suppliers and hardware and software companies that contribute?
I guess it captures a unique place in our imaginations, but this topic has an unusually severe infestation of magical thinking for some reason.
I can see an argument that a vertically integrated car manufacturer and taxi service provider would be hard to beat. Still makes Tesla and GM the companies to worry about, not Uber. The manufacturing part is much harder than the app part.
> Is there likely to be some magic secret that allows one company to dominate self-driving cars [...]?
I actually agree with you that this is not a given, but it wasn't clear from my phrasing. I should have started my comment with "Even assuming you will print money with a self-driving fleet, etc".
That said, whoever deploys a self-driving fleet first should enjoy a significant cost advantage against human-driven taxis, at least for the initial period before competitors finalize their own transition. Insurance costs should get lower if SD cars prove to be safer (if not, they wouldn't pass regulation), and taxi customers are very price sensitive, so the $10-15 per hour cost advantage will certainly matter. Taxi drivers hate the price competition from upstarts already. If anybody figures out how to make those prices economical, they win, at least until the market commoditizes itself at a lower price level.
Given your $10-15/hr rate, the monthly insurance costs for a vehicle are paid for in less than a day. As SD cars prove themselves, they may even have lower insurance costs than humans.
Since drivers can't work 24 hours per day, you are paying depreciation on ~three 2017 Toyota Camry's, not one.
It's déjà vu all over again. Remember "eyeballs" from 1999.
Research into "autonomous driving" began 1987 with the Prometheus programme consortium, then came C2C and C2X.
We have "autonomous driving" the day an automotive CEO is happily blindfolded on the back seat, alone, chauffeured a random journey through Seoul on a morning commute in monsoon season or a scooter-mania evening on Friday in Milan.
So far, Uber et al. have operated on the principle of pitching easily disposable worker bees against each other, at the mercy of an opaque rating system, with zero rights to appeal, burdening them with all costs of doing business (car, insurance, maintenance, etc.) while providing nothing more than an app with server-farm back end - the classic founder/VC/underwriter/IPO-seller benefit narrative.
> Without self-driving cars, that strategy isn't sustainable, and so eventually Uber will find itself unable to maintain its advantage over Lyft.
I see the "Uber is a bet on self-driving cars" coming up in every discussion about their business plan. But even if that's true, why is there an assumption that Uber would have a monopoly on self-driving cars?
Google, every car manufacturer, and a whole series of startups and universities are working on self-driving technology. If for example Google perfects it first, they will sell licenses to car manufacturers, who in turn will sell cars to Uber, Lyft, and every taxi company in every city of the world. Even if Uber develops the technology first and keeps it to themselves - then others cannot be too far behind, the potential payoff is just too great.
I totally agree with you. I don't think Uber would have a monopoly on self driving cars. In terms of the tech, they are definitely not ahead of e.g. Google. According to this TechCrunch article [1] their self driving cars require human intervention every minute.
I disagree with the other comments. I think it's because the rides are currently cheaper than they need to be. From the airport to my place, it costs 50$ via normal taxi. Via uber pool I pay $10-12. Most of the times it's only me in the car. There you have it.
Nope, worse than that. Uber did have its butt kicked in China and surrendered last summer, having it's China operations purchased by Didi (the company that applied the foot to Uber's posterior). But the problem was everywhere: Uber lost 800 million in 3Q 2016 ex-China, 2.2 billion for the year. "Even in the U.S., Uber's home market, the company continues to lose money." They did manage to turn a profit in the US in 1Q2016 but lost 100 million in 2Q and the losses "increased" in 3Q, looking only at the US. Source: https://www.bloomberg.com/news/articles/2016-12-20/uber-s-lo...
That doesn't show they are losing money by subsidizing rides.
From your source:
> Net revenue—the amount of money Uber generates after it pays its drivers—was $1.7 billion in the third quarter,
That's what it takes to be a real business. If you are a grocery store that buys bread for $1 and sells it for $2, you potentially have a real business even if you only move 20K loaves a month and need 30K to cover all expenses.
People keep on alleging that Uber is somehow buying bread for $1 and selling it for less than $1. There was stupidness like this in the first dot-com bubble. You aren't a business if you are doing this.
This distinction really matters. Since Uber is making money on each ride, there is a real business here.
I don't claim to know what's going on behind the scenes, but even years after launching in NYC, both Uber and Lyft have continued to send me notifications with steep discounts, free rides, etc. I've used both apps since they launched here and a major percentage of my rides have been discounted below 'sticker price'.
Uber has massive costs as it scales, but unlike Amazon that has fixed costs, Uber's problem is that it has massive VARIABLE COSTS in three areas: driver recruitment, local advertising and local regulation.
The work Uber needs to do to onboard a driver in Alberta, Canada is completely different from Ontario, Canada (e.g. drivers needing a commercial class 4 vs consumer class 5 license).
As a result, they are facing unique regulations that is making it difficult to automate the work that is being done in each local market.
Uber may indeed have poor management, but I believe you paint with far too broad a brush in this scenario.
MOST companies fail. 75% of venture backed companies fail quickly. Only about 50% of all businesses are capable of lasting 5 years, and only about 35% are able to last 10 years.
We have all seen companies that were offering products you wanted, but that closed for one reason or another, and it is not in every case that you can attribute it to bad management.
Companies can fold while offering products that are in-demand. The problem is that you have to have enough demand, and sell at a price that allows you to be profitable at that demand level. So it's quite possible for a company to have a product that's in-demand, such as glittery pink mechanical computer keyboards (there's got to be a few people out there who want them after all), but not be able to sell them at a price high enough to keep the company afloat. So glittery pink mechanical keyboards surely have some demand, but it's not going to be high, and the manufacturing cost of such things is going to be high, so between the low volume and high cost, that means you need to charge boutique prices. If you can't get enough people to buy them, then the company goes under.
But this is still attributable to "bad management". Good management would not even try to sell a low-volume product where they cannot price it high enough to make up for the limited demand and volume, and would instead come up with a better business plan in the first place.
Taxi's don't have an app to maintain. Uber does everything that Taxi's do, but also has an app (and associated server resources and operations) to maintain.
Your assessment of "replaces a whole layer of management and overhead" isn't entirely true as far as I know. If anything, they have more overhead.
I believe you're wrong and here's why (maybe the previous poster's way of explaining it wasn't good).
1) Economies of scale. Airbnb has management and overhead but it's spread across thousands of cities. Cab co.s need a full structure for each city in which they operate.
2) Automation. Many of the manual jobs in local cab companies like dispatch and scheduling are automated. You don't call a human when you need a ride, you push a button on an app. So that's also less overhead.
They are also very clever in how they treat their drivers, so labor cost is also low, and of course there is no maintenance on cars (drivers change their own oil, buy their own tires, etc).
So I believe Uber could probably make money just by replacing cabs, but like others have said, they have to compete with other VC money receiving ventures that are wiling to burn money to come out on top.
For now, we the customers are benefiting greatly from the situation.
You forgot: not paying local taxes and being able to operate illegally in some countries (without public transport insurances and legal permits). Which actually also happens to be the case of Airbnb.
Naked Capitalism made a good argument that Uber cannot experience economies of scale with its costs the way Amazon could when it scaled. Why? Because Amazon's fixed costs were... well.. fixed.
Unlike Amazon, Uber faces massive variable costs in driver recruitment/onboarding, legal regulations and local advertising.
Seriously. The rules needed to onboard a driver in Alberta, Canada are completely different from New South Wales, Australia. You can't automate driver recruitment/onboarding in either of these cities because these markets have passed actual legal regulations to allow ridesharing that require unique, but idfferent things (e.g. like market-specific commercial drivers licenses, background checks... or filling out registration forms made by the jurisdiction).
I'm not sure of their business model, but my understanding is that AirBnB doesn't set the price of the rentals or pay the home-owners, they take a cut of whatever price the homeowner decides to charge.
As I see it, Uber employs drivers, whereas AirBnB facilitates BnB owners.
1. Levandowski was critical to the development of the Lidar technology he allegedly stole
2. Google has never before enforced IP theft by former employees, and makes it clear to engineers that it doesn't do that. This is the first time.
3. Levandowski was selling technology he developed at Google to other companies, while working at Google, and Google looked the other way.
Waymo obviously has good reasons to be pissed off, but they've already set a precedent of permissiveness towards Levandowski's antics, which are not news to people familiar with the matter. All these years Goolge has been going around with a 'kick me' sign taped to it's back, and big surprise, Levandowski kicked them. They've already let him get away with this kind of shit.
I can't actually speak to the 14,000 documents he allegedly downloaded, so it's possible there's a silver bullet hidden in there somewhere. We'll see what sort of defense Uber trots out likely sometime over the next few weeks.
Maybe I'm missing it here, but your points (mostly 1&2) seem to make Google's case _stronger_. I haven't heard about the point that Google let Levandowski sell tech to other companies.
Also Google did their own internal investigation which led to them strongly believing that the theft of important tech and secrets happened.
> The company decided to perform a forensic investigation of Levandowski’s former company computer after a Waymo employee was inadvertently copied on an email from a lidar supplier with the subject line “Otto Files.” The email was being sent to a list of people that Waymo believes were working with Uber. Attached to the email were drawings of Otto’s lidar circuit board.[0]
>>Waymo obviously has good reasons to be pissed off, but they've already set a precedent of permissiveness towards Levandowski's antics
Doesn't matter. It is Google's prerogative whether to go after people who steal their IP. Just because they have not done so in the past does not weaken their case. In fact, it strengthens it, because now they can make the argument that the reason they made an exception in Levandowski's case is because of the humongous potential impact of the technology that was stolen.
IP is not like a trademark where if you don't enforce it you lose it.
Yea I was pretty much blown away by the difference between the Bloomberg feature in last week's Businessweek and the blog post that was submitted here earlier. Paints Levandowski in a MUCH better light with sources and high level interviews.
Not enough people read that feature, it was the best write-up on the lawsuit to date, from a reporter who has a relationship with Levandowski and other Googlers going back years:
I thought the Bloomberg article was pretty favourable towards Uber and Levandowski too, especially some of their reporting on the lawsuit without context:
> Levandowski defended Uber’s lidar technology as “clean”—that is, not the product of stolen design documents—and told the company’s engineers that he’d downloaded the files to work from home.
The major cache of documents that he downloaded were from an SVN system that he apparently had never connected to before (based on search logs). After he downloaded them and copied them onto the memory card, he wiped the laptop.
> A handful of Google employees soon followed him to the new company.
They fail to mention that those Google employees followed him out the door with confidential docs.
In my opinion, the Bloomberg piece is trying to blunt the revelation [1] that Levandowski was consulting/meeting with Uber just weeks after leaving Google and forming Otto by comparing it with his earlier behaviour at Google. They do a good job of that, but didn't ask the hard questions of why he would consult for a direct competitor, especially when he had his own startup where he had the freedom to do whatever he wants.
There's a way out of this that doesn't involve self-driving vehicles if Uber's willing to give up some control: 3rd party integrations.
If they allowed other ride-share/delivery services to integrate seamlessly into the Uber app/driver onboarding process, they don't need to build self-driving vehicles. They just level up from a driver dispatch service to a general dispatch service.
It'd be pretty tough for any one car manufacturer to go their own on a ride-sharing/delivery platform as long as Uber does everything they can to keep competition on both their inputs and outputs thriving.
Self-driving cars as in with no driver at all, even as a backup? Surely being allowed to run a fleet of self-driving taxis is 10+ years away from being legal?
They're not a taxi service. This might seem like splitting hairs, but it's important. The car-for-hire industry just got good enough that it ate the taxi companies' lunch.
A taxi service can pick you up from the side of the road when you hold up your hand and whistle.
A car-for-hire service is where you call a company and ask for them to give you a ride from place A to place B.
It should be obvious from those two sentences why taxis are more regulated.
Now, with increasing technology (primarily universal smartphones), the need for taxis cruising the streets at random looking for hails has dwindled significantly. This still doesn't mean car-for-hire services are taxi companies.
It might be how you understand "taxi" but that's not relevant, any more than if a robotic factory was doing work with a lot fewer people and a critic can't understand why minimum wage laws don't apply to the assembly machines. In his mind "factory" is something that uses labor to produce goods so there must be some scam going on. But he just doesn't understand.
When you hold up your hand, you have no information on the person pulling over to pick you up. You don't know the rate, you don't know the safety records, you don't know anything about the driver. At the airport, I have even been ordered into cabs by police officers. The consumer has very little choice.
With a car-for-hire service, I can investigate the car service ahead of time. I can get an exact rate quote and say "yes" or "no." I can decide whether or not they are worth my trust, and if I don't like them I can hang up, open the Yellow Pages, and shop around to find another one/
The fact that you think "press a button on my phone" is just the same as "put my hand in the air" is the same misunderstanding as the guy who can't understand why the robots aren't paid minimum wage. "Could my mental model of what's going on be incorrect? Am I out of touch? No, it's the children who are wrong."
Try this: taxi companies and car-for-hire services have been regulated differently for 100 years. Were they wrong to have been regulated differently all along?
The "get into a car with a total stranger with whom I have no commercial relationship" market is vanishing along with its regulations. There is no law of nature or regulation that says we need to find a new industry to be regulated the same way.
> When you hold up your hand, you have no information on the person pulling over to pick you up. You don't know the rate, you don't know the safety records, you don't know anything about the driver. [...] The consumer has very little choice.
With Uber, I now know the rate. All the other points apply to both equally. And with metered taxis, I also know a rough rate.
> With a car-for-hire service, I can investigate the car service ahead of time.
Am I under an incorrect assumption that there are multiple taxi companies in most cities that are licensed to operate? How is this different than calling a dispatcher at a specific company (which afaik does not suddenly make the car that picks me up a car for hire).
> Taxi companies and car-for-hire services have been regulated differently for 100 years. Were they wrong to have been regulated differently all along?
Taxi companies (traditional) and car for hire (Uber) haven't looked this similar over the past hundred years, as everyone wasn't carrying a cellular and GPS equipped supercomputer around in their pocket.
> The "get into a car with a total stranger with whom I have no commercial relationship" market is vanishing along with its regulations.
That sounds a lot like Uber too.
And this is why the regulations exist as far as I can tell: (1) safety, (2) awarding monopolies to prevent a race to the bottom that impacts (1), and (3) preventing your driver from using their position of power to charge you an unexpected / unreasonable rate.
I'd also note that I haven't said anything about whether I think taxis or Uber should be regulated. I've just asked how they're different as each exists today.
Nothing you've said so far makes me feel they are.
At their proposed scale, yes. There's another version of reality where Uber can massively scale back and become profitable, but that screws over a ton of investors, and causes an almost complete turnover. At that point, Uber is a much smaller, and really unsexy company.
from our perspective (very focused on technology) it seems that way but I have my doubts. Jones was hired on as a marketing and PR oriented executive. I don't think his role had much of anything to do with technology or dealing with the lawsuit. My opinion is that he got out of there because he didn't sign on to be doing constant spin and damage control over a rancid company culture.
Such lawsuits rarely destroy the defendants. Uber has been working on autonomous vehicles for several years now so they probably have some patents of their own. Most likely outcome is they will pay Alphabet (Waymo) a few hundred million $ and agree to cross-license all of their patents.
I dont see a reason that waymo has to license anything to a potential competitor that they could very easily put out of business instead, especially at such a low amount.
I think we should be asking whether this exodus is actually happening before why.
Uber is a large company with hundreds of "execs" at this level.
If we assume there are 100 "senior execs", even with a healthy 5-year retention, we'd expect 20 execs to leave every year. Sure, we'd expect churn to ramp over time, but 1 senior exec leaving every month would not be out of the ordinary.
I guess it's not really surprising that some people (and therefore reporters) want to believe this story. Uber is the villain and the villain must die. But, it doesn't make it true.
Google ventures is an investor in uber. They invested 250 mil when it was worth 3.6 billion. That works out to about 7%. Lets assume their stock has been diluted somewhat to 5% however the company is now worth 60 billion. That is is 2.75 billion paper gain. I think it makes sense they just work together and settle the issue because even if google wins the only people who really win are the the lawyers, because you will be hurting your investment. Also google track record with getting R&D projects to market is not too great.
Interesting point. Cheeky counter point: Google having done the research knows better than most that Uber's future profitability dependence on autonomous vehicles is doomed and is trying to recoup it's $250 million while Uber's still flush with other VC's money.
According to Uber, the engineer who was the target of the lawsuit developed a self-driving motorcycle way before he ever worked at Google.
So while Google/Waymo probably have a case, it's not black and white. A lot of techniques developed over years of research was probably stolen from Google, but the truth is Google does not have a monopoly on using LIDAR sensors to train self-driving cars.
> Google does not have a monopoly on using LIDAR sensors to train self-driving cars.
True. But they do have a LIDAR that's an order of magnitude cheaper than the competition -- which makes LIDAR practical as a use-phase sensor (not just a training sensor), as well as a patent on "zoomable" LIDAR with Levandowski listed as one of the inventors.
Interesting, but I thought the best LIDAR sensors were being built primarily by 3rd party vendors? These vendors are working very hard to make a powerful under thousand dollar LIDAR sensor possible, so I wouldn't say that LIDAR sensor pricing is Uber's achilles heel.
I think it's the (1) internal politics, people do get freakin' tired of yelling and backstabbing in the end, (2) public blackslash and the down image working there. Associate oneself with this company at an executive position / senior management position is going to hurt people's profile down the road.
Absolutely. I wouldn't be suprised if most of the recent bad PR Uber has been getting is actually being driven by Google ahead of the lawsuit to hurt Uber's reputation and distract them from preperation.
On the story about Jeff Jones, someone commented that Kalanick has a stock arrangement that gives him control of the board. Does anyone know if this is true? I can't see how they can let this hemorrhaging continue when the problem is obviously Kalanick's leadership. But it shows no signs of stopping.
The only other thing I could think of is that the board is complicit in something worse than what's been exposed, and is afraid Kalanick will blow things up if they move on him.
EDIT:
BBC is now reporting that two separate internal sources at Uber say Kalanick will step down when a new COO is in place.
Uber's valuation is a collaborative performance that only stops being fiction if everyone plays along until they achieve a self-driving monopoly. Kalanick is tearing up pages of that script faster than new ones can be written and a whole lot of the performers are jumping ship.
If he wants to be the king of an ash pile, so be it. But it's not gonna be an ash pile worth $60B.
Uber isn't going anywhere. Investors may take a short-term hit riding this wave of bad PR, but there's far too much machinery that will continue to push Kalanick's agenda forward.
This thread is chock full of wishful thinking, but the fact of the matter is the vast majority of Uber's users just want to get somewhere and don't care how the company is being run.
However, shortly after this story was published, another source, who also did not want to be named, said there was "zero chance" of Mr Kalanick stepping down when the new COO is announced.
https://twitter.com/anildash/status/843692126437302272
"Two separate, well-placed sources at the company have told the BBC that Mr Kalanick will likely step down as chief executive soon after the new COO is in place."
Now every departure is viewed with suspicion. With a 10,000 person company there is going to be exec departures, but even normal departures will have rumors attached to them (why did they really leave? Isn't the timing odd? Was something about to come out?)
Every senior person leaving Uber now has to manage their image as they leave. And every journalist is digging to see if there is any dirt.
I'm surprised this comment is so low. In a 10,000 person company with 100 "senior executives", you'll naturally see 20 execs leave every year even if the company has a healthy 5-year retention.
Sure, you'd expect to see this churn ramp and plateau over time, but something like 10 "senior execs" leaving every year doesn't strike me as out of the ordinary.
I think it's important to note that stories like this will be reported whether or not it's based in truth because it's what certain people want to believe.
where do you get your numbers from? saying 20% of senior executives leaving a company in a year seems to be a high figure.
let's set that aside for a moment, because you're saying this is completely normal for a large company. but to me this seems like a pretty abnormal event worth reporting. we're talking about a pretty large number of senior executives leaving within a very small timeframe. this seems to be why it's making the tech news sites, since it's not just the normal churn of employees leaving.
With a 10,000-person company, there will be departures, but there still shouldn't be many executive departures if things are going well. Especially now, the CEO and the board should be doing absolutely everything they can to get good senior execs to stay. That they can't is an important sign.
In case the name doesn't ring a bell, Brian was one of the creators of what became Google Earth and spent over 10 years at Google before jumping ship to Uber in 2015.
Mm, perhaps. Brian Mc only joined Uber in June 2015 as part of their massive push into maps. Another senior maps exec, Marc Prioleau, joined in December 2015 and last month left for Mapbox. Two departures after a short time suggests something not right.
This news is only getting traction because of Jeff Jones departure. In addition there has been a few other high profile departures that were news worthy
"In a statement, he said he was moving back to Kansas, where he is from, to explore politics. His exit has been in the works for some time, and his last day at Uber is March 28."
Travis is destroying Uber and his ego is so big, he won't step down which would save the image of Uber somewhat. What a trainwreck, I deleted the app and quite a few of my friends did as well. What a disgusting company and the way it's being run is just gross negligence.
Apparently my phone summoned an uber while it was in my pocket for a straight hour while I was at lunch the other day, and I was charged 6 dollars and refused a refund.
If you dial a taxi you need to provide your pickup place and name usually, accidentally dialing it won't make a car get to you. Not sure that's what you mean.
I deleted it because the only GPS option is "always on" now. Can't limit it to when app is on. Load of crap. I'm surprised Apple allows that to be an exclusive policy at all.
That's not correct, there are two options, always on, and no access. Uber still works fine if you refuse to grant access to your location, you just have to put your location in manually. If you've already granted permission, you can revoke it by going to Settings > Uber > Location. Apple aren't going to kick Uber out of the App Store if it works fine when you don't grant permission.
Not even that comparison is fair to uber. From Uber's point of view, his actions are indistinguishable from someone who hailed an uber and changed their minds.
Now, I don't know why uber didn't offer him the benefit of the doubt, but they were well within their rights not to refund. They did nothing unethical.
Interesting side-node about 'infamous'. Just because a movie depicts a terrible event or subject (Hitler in this case), it doesn't mean the move itself is 'infamous'. The movie (i.e. the artists) didn't do a terrible deed (e.g. completely misrepresent Hitler as innocent), so in this case the movie is simply "famous for it's Hitler in the bunker clip".
I think it's more infamous because the clip has been used memetically as a joke on other people/things freaking out about stuff. So the movie's not infamous but the clip is.
But it's still just famous because it's used in a humorous context. When I think of all of the combinations of those clips I've seen, I think of them in a funny way, not a bad way.
Maybe those clips are really offensive to some people, in which case they would be infamous to the offended.
If the waymo lawsuit essentially forces Uber to start its self driving program back from scratch then the path to self-driving viability has essentially been scrapped. To me, this is a better explanation of the recent spat of high-level exits from the company.