2018 was a year marked with extreme changes in Uber. Until 2018, Uber was dominated by its founder Travis Kalanick and his dominant Germanic approach to blitzkrieging the world with his ridesharing app, aptly named Uber, as in the old German National Anthem “Deutschland Uber Alles”, it was all about Kalanick Uber Alles and he managed to do so within a very short period of time. But just like the overstretched Wehrmacht in WWII, Kalanicks domination ran afoul of being spread too thin, trying to take over too many fronts at the same time and incurring losses that would normally sink an entire nation not just a company.

In fact, Uber’s retreat started in China, followed by Russia, where deals were struck to leave these locations in favor of local operators, giving Uber a percentage of the business but relinquishing control of the market. Then in 2017, Kalanick was ousted due to office cultural issues involving sex discrimination and overall bad management. This came at a time that Uber was facing constant losses in the billions and was struggling to find more investors to fuel the excessive losses due to its global presence.

Why was it making losses? The losses were due to the incorrect financial model; Uber was more concerned with growth than with profit-making, it was underpriced to destroy the competition, supporting its drivers with additional sources of income, and spending fortunes on setting up local bases to fuel its hunger for more territory. They also invested heavily in the driverless car technology sector and competed with companies like Waymo, owned by Alphabet, and GM.

All this changed in 2018, which was the year that started with a SoftBank investment that closed 2017. SoftBank essentially saved Uber from crashing by injecting a huge amount of cash into the reserves as well as buying out shareholders including Travis Kalanick. With 17% of the shares in their pocket, SoftBank became a major force in the Uber boardroom.

Dara Khosrowshahi, the new Uber CEO, is totally different from Travis Kalanick, he also inherited a company that Kalanick had built and destroyed at the same time. What Khosrowshahi had to do was to change the image of Uber, change the internal culture and also change the business model. Uber was set on a path for lean operations, and Khosrowshahi was under pressure from the Board and especially Softbank to reduce overheads and plan for a 2019 IPO that would hopefully save Uber from truly crashing if the losses continued to eat away before they became profitable. Add to this the fact that Uber was and is facing constant legal litigation at home and abroad, especially in London, Uber’s most profitable center, and Europe, where the European court ruled that ridesharing is a taxi service. Kalanick had to consider all the alternatives to assuring a secure future.

Uber’s Competition at home is Lyft, and in South East Asia is split between Grab, Ola, and Go-Jeck. Grab is the main competitor, while Go-Jeck is focused in Indonesia and Ola is mainly in India and Australia. Uber decided to cut out 8 locations in South East Asia and Grab was located in all these locations, so what they did was create a deal, similar to the Chinese deal with Didi Xuching. Uber transferred its operations to Grab for a percentage in the operations and left the area.

What happened however as fast a reverse blitzkrieg as it was a forward one. Uber left the markets within two weeks, notifying all clients, regulators, and drivers of the change in ownership. In fact, it was so fast, the drivers were hit the hardest, for thousands of drivers had to change contracts between Uber and Grab and hope that Grab would take them on. Added to this was the regulator’s fury in some countries, stating that Grab became a monopoly, and Uber responding in kind that there is no legal precedent to stopping it from leaving the market.

Now Uber is 8 countries lighter and can concentrate on home and Europe, and perhaps keep an eye open on the Mexican border where Didi is massing up, as it continues to roll over South America.

However, all is not lost, since SoftBank is a major shareholder in Didi, Grab, Ola and, well everyone involved in ridesharing. So with a co-parent behind the helm of all ridesharing companies, it seems that Daddy is cutting the cake for each child.

The bottom line: Clients in Southeast Asia are complaining that the age of fair pricing is gone, with the only Grab at the helm, and taxi drivers, there is no competition as such, and prices are going back up, forcing clients to reconsider alternative modes of transportation.

On a happier note, Uber did make a $2.9 billion gain from selling its Southeast Asian operations, and that went back into the pot to help it restructure itself, fight Lyft at home, and prepare for various battles in the UK and Europe.

So to conclude 2018, Khosrowshahi didn’t have an easy time, but he did inherit a company that was so close to closing that only an idiot wouldn’t be able to pull it back up. With so much bad sentiment behind Uber, 2018 proved to be Uber’s best year. They left Southeast Asia, they regained London, they overcame the driverless car incident, and they started to reclaim lost territories at home. All this under the guidance of the board, SoftBank and Dara Khosrowshahi.

 

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