"Uber passengers were paying only 41% of the actual cost of their trips; Uber was using these massive subsidies to undercut the fares and provide more capacity than the competitors who had to cover 100% of their costs out of passenger fares." Is either mathematically incorrect or extremely misleading. You can't take Uber's cut of passengers payments (~18%) and then divide by Uber's costs to say "passengers were paying only 41% of the actual cost of their trips", as the bulk of the cost of the trip goes directly to the driver. If you take this into account the rider is actually covering about 80% of the total cost of the trip, with Uber subsidizing about 20% of the cost on average, which includes their massive infrastructure building and expansion efforts. This means that even break-even Uber at a 25% higher cost, or a 20% profit margin Uber at a 50% higher cost, is still cheaper (and more convenient and enjoyable) than a taxi.
Uber's biggest investor is Saudi Arabia's Sovereign Wealth Fund.[1] They don't have a problem with the company keeping women in their place. It may even be viewed as a plus, influencing an American company to adopt Saudi values.
Do you believe the behavior described in the piece is a result of Saudi investment? Your comment leans in that direction, which is quite an insinuation if that's not what you actually believe to be the case. If so, I'd like to know more about what leads you to believe it is, or is even likely. It seems to me that much more prosaic explanations are likely.
My reading is that their belief is that Saudi investors wouldn't care about such behaviour or consider it marginally positive, as a contrast with non-Saudi investors who might reconsider doing a deal given such information.
I'm unsure what difference you see between "a plus" and "marginally positive" except I'm specifically pointing out it's probably a secondary consideration to profit.
Investors pull the strings. The behavior isn't the result of an investment, but failing to implement procedures after the fact to stop future incidents definitely can be. Not through action, but through inaction.
Meaning, more ethical investors (also known as: Board Members) might say "We need to do something about this."
I suspect even the most misogynistic investor will balk at the poor publicity like OP's story, and especially at the stack of harassment lawsuits that are sure to be in the pipeline if all these employees grievances are accurate.
Saudi Arabia is keeping Uber alive. Without that $3.5 billion cash investment from last summer, Uber would be in serious financial trouble now. They wouldn't have been able to get the $2 billion loan that followed, and would have had to raise rates to stop the cash burn. That would have stopped their growth and cut their market share.
To assume there is a disconnect between a company and the investors that fund it is pretty naive. For starters, major investors almost always get board seats, which means they have a direct say in managing the company. Besides that, there are numerous articles that discuss how taking VC money has ruined many companies - Zenefits is the most popular recent example.
any investor or board member whonis aware of the type of activity mentioned by OP would shut it down fast. their first responsibility is to protect the company, especially one about to go public, and that doesn't happen when you're getting sued repeatedly for hostile work environment and/or sexual harassment.
The 50% that you are forcing Uber to pay is 100% that is denied to Lyft, and additional pressure on drivers to keep the Uber app open and the Lyft app closed.