Cars and Drivers

Is Uber Still Worth $66 Billion?

Douglas A. McIntyre

Published: March 5, 2017 7:25 am

Last Updated: January 12, 2020 2:15 pm

Depending on the source, the value of Uber has been pegged as high as $66 billion. Recent battles with local governments, competition, new self-driving car companies, and controversies at Uber may have changed this.

In December last year, 24/7 Wall St. reported, based on Privco data that Uber was at the top of its most valuable unicorns list that:

 Uber
> Valuation: $66 billion
> Industry: Car service
> Total funding raised: $15.8 billion
> 5-month value change: 5.6%

Valued at $66 billion, Uber is today’s the world’s biggest startup success story. The company set out to make hailing a cab as easy as hitting a button on your phone. Since then, it has evolved into a far reaching logistics network that can provide ride sharing and delivery services.

Though many argue the company is dramatically overvalued, big investors are likely banking on an even more evolved future. Using a team of roboticists from Carnegie Mellon University, the company recently rolled out a fleet of driverless cars in Pittsburgh. If the program is successful and can be implemented on a larger scale, it will minimize overhead and dramatically increase profits.

Since then, there has been at least two positive developments. Uber linked up with the parent of Mercedes to develop sell-driving technology. It has also started to test self-driving cars in several places, which include Arizona.

However, Uber has run into major problems within the last week. It has been charged with deceiving local governments, According to The Wall Street Journal:

Uber Technologies Inc. has for years employed a program that uses data from its ride-hailing app and other tools to evade government officials seeking to identify and block the service’s drivers, according to a person familiar with the matter.

The program, which Uber calls Greyball, was designed to prevent people from using the Uber app in violation of the terms of service, including law-enforcement sting operations and competitors attempting to disrupt Uber’s operations, this person said.

And Uber’s CEO Travis Kalanick has caused a great deal of controversy. He was caught on video in an unpleasant argument with one of his drivers. And, his company was charged by a former worker, with sexism and bias. Valley Beat summarized the problems:

An incendiary blog post by former engineer Susan Fowler Opens a New Window. unleashed a firestorm from early investors Opens a New Window. , former employees Opens a New Window. and the media alleging that Uber management fosters sexism, bias and bad behavior. The crisis escalated when an embarrassing video surfaced of Kalanick berating a driver Opens a New Window. .

Some, including 24/7 Wall St. questioned whether he could continue to run the company:

Uber CEO Travis Kalanick found himself in hot water after a video surfaced of him arguing with an Uber driver over lowering fares. Ultimately no chief executive wants to find themselves in this position, especially publicly. The question is whether this is enough for Kalanick to get the boot.
The public outrage from this was very real. Twitter even had a trending hashtag #deleteuber, prompting a fair amount of users to delete the app and convert to competitors. Some were even calling for Kalanick to step down from his position in Uber

Uber and its competition also face hurdles from local governments. According to CNBC:

Uber and Lyft, and others, want hailing a ride to be as common as catching the bus. But their aggressive expansion plans are being stymied in many places in the U.S. by lawmakers because of safety concerns, pressure from taxi companies or a desire to level the playing field for incumbents.

Some methods lawmakers are using to thwart their expansion include introducing requirements on driver fingerprinting, vehicle inspection, insurance, fees, and limits on where drivers can pick up and drop off passengers.

One or two of these problems might not affect valuation. A mountain however, could do great damage