Uber, the Silicon Valley lift service that is rapidly expanding across the world, will need to change its tactics if it is going to become a public company, a US venture capitalist warned today.
Fred Wilson, managing partner at New York-headquartered Union Square Ventures, said Uber needs to ditch its “arrogant” and “ruthless” approach if it wants to go public and realise its $40 billion valuation.
Describing Uber’s business model at the Le Web conference in Paris, the seasoned investor said: “Its ruthless execution combined with a swagger and an arrogance that is unlike anything I’ve ever seen. The ability to execute comes from that arrogance and swagger.
“But to become a public company they need to figure out how to become more mature.”
He added that Uber tends to beg government for forgiveness instead of asking for permission. “They [Uber] need to figure out how to work with the system and not “screw the system,” he said.
Uber was banned in Delhi, India, yesterday after it was alleged that one of the company’s drivers raped a passenger.
Black cab drivers in London have also protested against the company, claiming that it is operating illegally with its unregulated taxi metres. Meanwhile, Parisian courts will vote this week on whether Uber should be permitted to operate in the French capital.
Wilson said Europe is a “tough place” for the new generation of companies that are aiming to tap into the so-called sharing economy - an area that the UK is currently reviewing.
“The governmental leaders in Europe are anti-innovation and that’s upsetting,” he said, singling out Neelie Kroes, former VP of the European Commission. “She’s against net-neutrality,” he said. “She’s wrong. I would tell her why she’s wrong if she would give me a meeting but she won’t.”
However, other disruptive Silicon Valley firms appear to be succeeding in Europe too.
For example, Airbnb has expanded to 34,000 cities around the world, many of which are in Europe.
The company said today that an increasing number of property owners are letting out their houses and bedrooms outside the large urban conurbations.
“Our first development was Americans coming to Paris and then Europeans going to Chicago and New York,” said Airbnb’s head of EMEA, Olivier Grémillon. “But there are other places people travel. More than 50 percent of Airbnb listings in France are outside the cities. So it’s definitely expanding beyond the cities.”
Despite opposition from governments, Wilson is confident that companies tapping into the sharing economy will prevail.
Uber will end up co-existing alongside regulated taxi companies in cities around the world, he said.
“I don’t think Uber, Lyft or Sidecar will completely wipe out regulated taxi systems,” said Wilson. “It will change how they do business.”
While Wilson acknowledged Uber’s dominance in the car-sharing market, he said he believes that Lyft will be to Uber what Twitter is to Facebook.
Union Square Ventures passed on the opportunity to invest in Airbnb and Uber.
When asked if he regretted not investing in these companies, Wilson said: “These are the things that hurt.”