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Uber Is A Bad Business Model

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Uber, a San Francisco-based company, is currently one of the fastest growing startups worldwide. Founded in 2009, the company grew from an estimated value of 3.5 billion to 17 billion dollars in less than 5 years. In principle, Uber is a perfect model for a worker co-op.(geoco-op). A user owned, user controlled enterprise, that distributes its surplus to members proportional to their participation. Uber is a piece of software owned by drivers around the world used to help them do their work better with the costs and surplus or profits shared. How it works is quite simple. Prospective passengers can download an app on their smartphones that enables them to connect with drivers and request the nearest available car to be used similarly to a taxi. However, unlike a traditional taxi company, Uber does not operate its own cars. Alternatively, it enlists private drivers willing to drive paying passengers, and then funnels the request directly to the drivers. All things considered, Uber may appear to be a perfect model for a worker co-op. However, in actuality, Uber is not a co-op for a few reasons: it requires considerable amounts of initial funding financed through venture capitalism, it does not distribute its annual profits to drivers, and it is managed by a profit-driven mentality with no concern for the community. …show more content…

Members must contribute equally, but it can take many forms. If Uber were to practice membership and require a one-time membership fee, similar to a taxi cab medallion, sufficient enough to fund itself while also remaining competitive in the cost of a cab medallion, it would no longer need the help of venture capitalists. By practicing economic membership participation Uber is would ensure that its members receive benefits pertaining to their participation, and the business they conducted rather than the size of their capital

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