Paris, France - Unlike many American startups, Uber was not founded in someone's garage, but was conceived instead on a cold night in Paris, when two tech entrepreneurs could not find a taxi.
Uber chief Travis Kalanick and co-founder Garrett Camp were attending the technology conference Le Web late in 2008, where they were brainstorming ideas for a new venture - in Kalanick's terms, “jamming” like jazz musicians.
“There are two cities in the world that I think are the worst to get a cab - Paris and San Francisco,” Kalanick, now 38, said at a 2012 presentation in Chicago.
“The idea of pushing a button and getting a ride was a magical one,” he said.
The plan that began as a “timeshare limousine” service using luxury vehicles has allowed San Francisco-based Uber to grow into one of the world's largest startups, valued at some $40 billion (R462 billion), with operations in more than 200 cities in 54 countries around the world.
But Uber's growth has also generated frictions with existing taxi operations, and posed challenges for regulators.
While the idea began as a way for Kalanick and his friends to get a high-class ride, Uber and its chief now see their venture as a crusade against an entrenched taxi industry that, according to them, fails to serve consumers.
In cities around the world, the regulated taxi industry “feels threatened by our high quality service and quick response time,” Kalanick said in a 2013 interview.
In most areas, “the taxi industry is used to being protected by rules and lobbying efforts that shield them from competition,” he said.
‘SHARING ECONOMY’
Uber does not employ drivers or own its vehicles, but instead uses independent contractors with their own cars. As such it has become a key player in the “sharing economy”, allowing drivers to operate their own business, along with its risks and profits.
A study commissioned by Uber and led by Princeton economist Alan Kreuger found Uber drivers “generally receive higher earnings” than taxi drivers - about $6 (R70) an hour more in the United States - but that comparison is difficult because Uber drivers must pay certain expenses.
The study concluded that “most driver-partners do not turn to Uber out of desperation or because they face an absence of other opportunities in the job market, but rather because the nature of the work, the flexibility, and the compensation appeals to them.”
Uber customers use a smartphone app to locate a driver - in some cities with several classes of service - and instantly book a ride. The company motto vows to be “everyone's private driver”.
Since launching in 2010, Uber has also been the prime example of a “disruptive” economic force. Taxi drivers in dozens of cities have staged protests against Uber, and regulators in many cities have sought to shut it down.
New Delhi banned Uber from operating in the Indian capital after a passenger accused one of its drivers of rape. South Korea indicted Uber's founder for operating illegally.
The company has also seen its image tarnished by executives' gaffes, and concerns about privacy.
SAFETY MEASURES
Critics argue that Uber has fallen short on issues such as liability insurance and criminal background checks. In December, Uber said it would step up its safety measures.
John Breyault of the National Consumers League said companies such as Uber “don't fall neatly into the regulatory buckets we've seen in the past century. So it's difficult to see how to deal with events like in what happened in New Delhi, and to know where liability lies.”
Despite that uncertainty, Uber raised a fresh $1.2 billion (R14 billion) in venture funding in December to push its market value to $40 billion (R462 billion), and it now looks to continue expansion around the world.
While a number of taxi and ride-share apps are also competing in the market, Kalanick said Uber had succeeded because of its investment in technology.
“People see they can push a button and a Town Car magically appears, but they don't realize all the math and logistics in making that occur,” he said.
Kalanick said Uber had been a positive force, and in 2015 “will generate over one million jobs in cities around the world.” He brushes aside criticism of its business model.
In Europe, where Uber faces numerous regulatory issues, Kalanick claimed the company could take 400 000 cars off the road while creating 50 000 jobs in the next year.
“When you do something successful, not everybody is happy, and the older the industry you are tackling, the more protected it is by corruption or by government or by both,” he said at a 2012 event at Stanford University.
“I'm not sure who gets hurt from this other than a particular incumbent industry.”
FERTILE GROUND
Renowned for a scarcity of taxis and grumpy drivers, Paris is fertile ground for new transport apps such as Uber, but traditional cabbies are not giving up without a fight.
Philippe Rossignol, 45, has been driving a taxi in Paris for 17 years and takes pride in the service he offers.
Sporting a suit and tie, and with magazines, water and a plug for charging your phone, he aims to offer a little more than the average cabbie.
But his business is in trouble - with profits down some 15 to 20 percent - and he lays the blame on mobile apps such as Uber, which have flooded the market with amateur drivers.
"There are more and more of us taking a share of the same pie," said Rossignol, who comes from a family of taxi drivers, grumbling he can no longer afford to knock off early when he's close to home.
Similar complaints have been heard from cabbies all over the continent, with drivers staging anti-Uber protests from Madrid to London and Berlin.
But Paris - with its tradition of protectionism - was always going to be the most combative.
In 2010, a poll put Paris dead last among the world's tourist hotspots for the quality of its taxis, the main complaint being the rudeness of drivers.
The same year, a French think tank found that its rigid regulations meant Paris had only 2.6 taxi drivers per 1000 people, compared with 8.6 in London and 17.2 in Dublin.
The government tried to prise open the sector in 2009 by offering a new licence allowing drivers to do pre-booked journeys but not pick up customers in the street.
INDEPENDENT DRIVERS
However the idea only really took off when Uber arrived two years later.
Uber's app puts customers together with independent drivers, and allows them to rate their chauffeur and see a map of the route - giving drivers an incentive to be polite, courteous and honest.
Rides in its "UberPOP" service, which uses drivers without any kind of professional licence, cost about half as much as a conventional taxi ride.
Rossignol concedes that Uber's success is partly a result of "certain shortcomings" with the City of Light's taxis.
He says call centres have put pressure on drivers to improve their appearance and attitude, but he still feels the competition from Uber is "neither right, fair nor healthy".
His chief complaint is that traditional taxi drivers face far stricter regulations - including annual inspections of cars and medical visits - and must cough up for an expensive licence which many Uber drivers do not require.
"Today, a young person will work hard, gain his licence, but he will no longer get a return on his investment," said Rossignol.
UberPOP is technically illegal in France, but the company has ignored the rules and appealed a €100 000 (R1.3 million) fine it received last year.
Kalanick told a technology conference in Munich in January 2014 that the laws only "exist because the taxi industry is trying to protect itself through regulatory capture".
He said Uber would create 50 000 new jobs in Europe in 2014 and help take 400 000 cars off the road by encouraging drivers to use taxis instead of their own vehicle.
That’s unlikely to convince Paris cabbies. Alain Griset, head of the National Union of Taxis (UNT), said Uber only worked because it forced down wages.
"If politicians had any courage, they would ban this business that takes advantage of people who use it to scrape together a few measly euros," he said.
‘DISCREPANCIES’ IN DELHI
Meanwhile, Uber has failed to win a licence to resume operations in New Delhi after one of its drivers allegedly raped a female passenger. Authorities had banned the firm from the streets of India’s capital after the 5 December attack, accusing it of failing to perform adequate background checks on its drivers.
Nevertheless Uber said last week it was resuming operations after applying for a licence to operate as a radio-taxi company.
But the Delhi transport department said on Thursday the application had been rejected after "discrepancies" were found, including lack of proof of an office address and details of management.
Transport spokesman RP Singhsaid: "We have rejected the application after finding discrepancies in the documents.
There were insufficient details for granting a licence," he said, adding that Uber could "rectify the errors and re-apply".
The trial began this month of Uber Shiv Kumar Yadav, who has pleaded not guilty to claims that he raped a 25-year-old passenger as she was being driven home from a dinner with friends.
The alleged victim has also hired high-profile US lawyer Douglas Wigdor to sue San Francisco-based Uber in the American courts.
AFP