The Power of the Political Legal & Regulatory Environment

Uber, the revolutionary ride-sharing app, would NEVER have become the global powerhouse it is today without the savvy legal maneuverings of former CEO, Travis Kalanick.

Stop quoting laws, we carry swords! - Gnaeus Pompeius Magnus, ~106 BC

Specifically, Kalanick leveraged the supreme popularity of Uber to IGNORE transportation regulators in North America. Pretty insane and daring when you think about it!

It does seem a marvellous business model if you can get away with it. These companies parade the ‘flexibility’ their model offers to drivers but it seems the only real flexibility is enjoyed by the companies themselves. - Labour MP Frank Field

Unfortunately for Uber, Kalanick found it MUCH more difficult to ignore the transportation regulators in England and China.. He found it impossible to ignore the transportation regulators in China.

During Uber’s meteoric rise, CEO Travis Kalanick told North American transportation regulators that he didn’t really care about the law.

While Uber’s supreme usefulness to commuters allowed them to ignore the opinion of North American lawmakers, European & Asian Transportation Regulators saw Kalanick coming a mile away and prepared themselves for battle accordingly.

London’s Bridge Is Rising Up

As I write this, Uber is battling the UK transportation regulator for the right to keep operating in London.

In response, since Uber couldn’t ignore London lawmakers like they did in North America, they’ve hired Laurel Claire Powers-Freeling, former director at the Court of the Bank of England, as Chairman for Uber UK. When you can’t beat lawmakers, you hire a lobbyist to influence the government.

Hiring Lobbyists to change the law is as American as apple pie.

Kalanick, You’re So Cute!

When Kalanick said he wanted to dominate the Chinese market, CEO of Didi Chuxing, a competing ride-sharing app, called his intentions, ‘cute.’

After three years of trying and failing to make significant headway into the Chinese market, Kalanick sold Uber China to Didi Chuxing. Why?

When the Chinese government legalized ride sharing, it included provisions making it illegal to engage in a practice Uber has become famous for — selling rides below cost to push out competitors. It played this game with Didi, and Liu made fun of Uber for it.

“Have you seen in other places market leaders buy market share?” Liu said. “Normally it’s always the smaller player with smaller scale, lower efficiency, and in most cases worse service that needs to buy market share to heavily subsidize. (Business Insider)

Even as China relaxed their ride-sharing regulations, they DIDN’T allow Uber to undercut their competition’s price.

Heck, when you consider that the Chinese government is thinking about holding 1% equity in the largest Chinese web companies, maybe Uber didn’t stand a chance in the first place.

Fun fact: Apple invested $1B months in Didi Chuxing before they bought Uber China.