Uber and its valuation

If you have been following news around the world, you are sure to have heard of Uber and the ongoing protests in USA against it.  Uber is a company that provides a mobile phone application which is primarily an interface between a customer and a taxi driver; known as ridesharing, it helps connect passengers with drivers for hire and sharing a ride.

How does this Uber work? One has to first register online for the service and once that is done, you tap the app and request your cab. The driver, based on GPS, closest to your location will respond. You do not oay cash as it is charged on the card and Uber pays the taxi driver directly. The website gives you an estimated fare based on the address entered; so there is no question of cheating there.

Earlier it started as a connection between taxi drivers and passengers but since 2012, it has expanded to non-taxi vehicles too. Naturally, it’s a huge success but the taxi drivers are not too happy and have staged a huge protest. The Uber service is available in India too – Mumbai, Delhi, Pune, Hyderabad, Chennai and Bangalore but currently it is only premium service where the charge is almost five times more than the regular cabs.

The best part – in June 2014, a group of investors valued the company, basically an app is its main asset, at $18.2 billion or a mind bogglingRs.1,07,000 crore!  This is more than the combined valuation of Hertz and Avis. A simple idea – of using technology to connect taxi’s to passengers; that’s all it is all about. So a simple idea but a brilliant and easy to use interface, makes it a billionaire idea! After all that is how all greatness is achieved – a simple idea!