False economy What’s in it for me? Understand what makes the

contracts.

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Before Uber became successful, the idea of a 
business that encouraged you to ride in 
strangers’ cars seemed ridiculous. So how did 
Uber manage it?
The company actually began as a town car 
service in San Francisco, which had a 
notoriously terrible transport situation. Finding a 
taxi there was almost impossible, as there 
wasn’t enough supply to meet demand.
Uber, therefore, started a reliable car service for 
the city’s young professionals, and style was a 
key part of the business model. It seemed cool 
that you didn’t need to hang around waiting for a 
cab.
In time, other ride-sharing services, like Lyft, 
entered the market. At the time, Uber had 
already established itself in a few cities, but now 
under threat, the company realized it needed to 
branch out into the taxi service too. Thanks to its 
excellent app and strong user base, this 
expansion proved successful.
This was when Kalanick realized that Uber 
should keep its image fluid, responding to 
changing trends to stay fresh and relevant.
But Kalanick dreamed bigger still and lead Uber 
to success abroad too, especially in Europe. 
Incredibly, he even almost succeeded in getting 
a monopoly in the challenging Chinese market.
However, he was thwarted by Uber’s Chinese 
equivalent, Didi Chuxing. Didi Chuxing had more 
capital and a broader reach in China than Uber, 
operating in 400 cities compared to Uber’s 100. 
Seeing he couldn’t win, Kalanick agreed to a 
deal where Uber withdrew from the Chinese 
market and sold its Chinese operations to Didi 
Chuxing in return for a 17 percent stake in the 
company.
So although Kalanick didn’t actually get Uber 
into China, he still made billions of dollars from 
the Chinese market, which cemented his 
reputation as a phenomenon in tech. What’s 
more, this added capital meant that he now had 
the means to grow Uber even faster.
Clearly, Kalanick’s risk-taking was a major factor 
in his company’s success. But as you’ll find out 
later, it also meant Uber sometimes courted 
controversy.