Unlike many American startups, Uber was not founded in someone’s garage, but was conceived instead on a cold night in Paris, when two tech entrepreneurs could not find a taxi.
Uber chief Travis Kalanick and co-founder Garrett Camp were attending the technology conference Le Web in late 2008, where they were brainstorming ideas for a new venture – in Kalanick’s terms, “jamming” like jazz musicians.
“There are two cities in the world that I think are the worst to get a cab – Paris and San Francisco,” Kalanick, now 38, said at a 2012 presentation in Chicago.
“The idea of pushing a button and getting a ride was a magical one,” he said at another event.
The plan that began as a “timeshare limousine” service using luxury vehicles has allowed San Francisco-based Uber to grow into one of the world’s largest startups, valued at some USD 40 billion, with operations in more than 200 cities in 54 countries around the world.
But Uber’s growth has also generated frictions with existing taxi operations, and posed challenges for regulators.
While the idea began as a way for Kalanick and his friends to get a high-class ride, Uber and its chief now see their venture as a crusade against an entrenched taxi industry that, according to the startup, fails to serve consumers.
In cities around the world, the regulated taxi industry “feels threatened by our high quality service and quick response time,” Kalanick said in a 2013 interview with AFP.
In most areas, “the taxi industry is used to being protected by rules and lobbying efforts that shield them from competition,” he said.
Uber does not employ drivers or own its vehicles, but instead uses independent contractors with their own cars. As such it has become a key player in the “sharing economy”, which allows the drivers to operate their own business, along with its risks and profits.
New Delhi banned Uber from operating in the Indian capital after a passenger accused one of its drivers of rape. South Korea indicted Uber’s founder for operating illegally.
The company has also seen its image tarnished by executives’ gaffes, and concerns about privacy.
Critics argue that Uber has fallen short on issues such as liability insurance and criminal background checks. In December, Uber said it would step up its safety measures.