Editorial: A Cautionary Tale

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Published: December 13, 2014 12:08:59 AM

While we all try and figure out whether Uber ...

While we all try and figure out whether Uber will continue to operate in India, or parts of India, the breakneck speed of its growth is a cautionary tale.

It was growing, according to Forbes, at a pace where it launched its services in 30 cities in a one-month period. That’s one city a day. Part of that rush came from the massive infusion of money—$2.7 billion from investors. What it also did was leave the company vulnerable. As an article in USA Today said: “Stretching too far, too fast is a common misstep among enthusiastic business-owners eager for growth. And the ramifications of too-rapid expansion can be great: it can potentially compromise customer service and product quality.”

There is some indication that Uber founder, San Francisco-based Travis Kalanick, was aware of the challenge. In a Facebook post almost a year ago, he wrote: “We have to continue to get massive amounts of drivers on board as quickly as possible. Supply for experienced drivers in the city is dwindling, and that means introducing tens of thousands of new people into the commercial driving industry.

This is contributing to the variance. We quickly weed out poor transportation providers, but poor service from new guys is definitely a thing.” Kalanick posted this after Noah Lichtenstein a San Francisco-based venture capitalist, complained that Uber’s rapid expansion was bringing in a large number of low-quality drivers. Shiv Kumar Yadav would definitely have been one of them.

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