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  • [Nailed It! Theme Song]

  • [Nail SFX]

  • Let's talk about Uber.

  • Uber is part of the new "sharing economy"

  • that lets people with their own vehicles

  • pick up consumers within minutes

  • and take them from point A to point B.

  • The buzzy bay area startup

  • has raised 1.6 billion dollars in just 4 years.

  • and is valued at an eye-popping 18.2 billion dollars

  • Uber is 204 cities,

  • across 45 countries,

  • and covers 55 percent of the U.S. population.

  • Imagine a world with less pollution.

  • No traffic jams.

  • And maybe you don't even have to own a car,

  • because your next ride is just a tap away.

  • No more scrubs! Hanging out of the passenger-side

  • of your best-friend's ride.

  • Uber!

  • This is the vision that Uber is peddling

  • and venture capitalists are fully on-board!

  • Uber's recent valuation,

  • makes them more valuable

  • Hertz,

  • Avis,

  • or United Airlines.

  • Uber managed to raise 1.2 billion dollars

  • from investors by Friday

  • and the company's CEO, Travis Kalanick, expects to get an additional 200 million dollars.

  • That's all thanks to the company's incredible valuation.

  • Investors estimate that Uber is worth

  • a whomping 17 billion dollars!

  • Add everything up

  • and Uber is now worth 18.2 billion dollars.

  • As the Wall-Street journal points out,

  • only Facebook managed to get a higher valuation from investors as a private company.

  • Also, Uber is now worth about as much as competitors

  • Hertz and Avis combined.

  • On paper,

  • Uber looks like a startup that wants to disrupt the 11 billion dollar taxi industry,

  • but what if I told you,

  • Uber's business model was more sinister than that.

  • The reason Uber can double revenue every 6 months

  • and close round after round of funding

  • is because they have found a way

  • to sidestep the costly regulations

  • that are required of cab companies.

  • Uber plays by a totally different set of rules.

  • Their game plan is to effectively ignore

  • whatever legal challenges

  • may eventually be thrown at them

  • in a quest to get big and drive their competition out of the game.

  • Uber is playing a game of Risk.

  • Their carefully, calculated missions

  • are putting them on a course for total domination.

  • Mission #1: Build a Fan Base

  • Position yourself as a classy, but cheap startup

  • and people will use the word "Uber" as a verb

  • and tweet their love.

  • Hashtag: #loveuber

  • [Music]

  • Mission #2: We Need Small Business

  • Uber is the new face of entrepreneurship and small business in America.

  • Uber CEO Travis Kalanick

  • said that drivers in New York make over 90 grand a year

  • and drivers in San Francisco make over 70 grand.

  • The San Francisco Cab Drivers Association

  • reported that 1/3 of the 8,500 cab drivers

  • in San Francisco have ditched driving a registered cab

  • in the last 12 months to drive for Uber instead.

  • Watch this video and try to resist starting your own business.

  • My name is Saahn,

  • My name is Meir

  • My name is Gehrat

  • My name is Bolivender-Singh

  • My name is Juan and I'm an Uber partner.

  • Yellow taxi is very difficult for me.

  • The effort, the energy, the hassle.

  • Sitting in the car like for 12 hour, 10 hour.

  • The amount of time that you put in.

  • I don't want that anymore.

  • It's significant comparing to Uber.

  • I'm never going back to the Yellow taxi.

  • I wouldn't be living the life I'm living right now if it wasn't for Uber.

  • You make more money, you're not hustling for the money.

  • You go online, you got paid like this. 1, 2, 3.

  • Slow, just patient.

  • When I want to work I can do it.

  • Being a part of Uber,

  • you move from the bottom of the ladder to the top of the ladder in no time.

  • It's like my own business.

  • Easy.

  • Convenient.

  • And everybody likes.

  • Mission #3: The Bait and Switch

  • Uber operates more like a pimp, than a boss.

  • By calling themselves a "Tech" company

  • instead of a transportation company,

  • they are able to call drivers: "Independent Contractors"

  • and they don't have to guarantee wages or pay health insurance.

  • Drivers receive star ratings from passengers.

  • And drivers that fall below 4.4 stars

  • can be deactivated by Uber.

  • If me and my girls get drunk

  • and I wanna cramp 6 of us in a Prius

  • but the driver rightfully says no,

  • I can be like, "Ew! One Star!"

  • Also, drivers don't receive tips.

  • A highlight of Uber's seamless payment system,

  • meant that no money is transferred between rider and driver.

  • That's great! But there's no tip.

  • By Uber's own estimates

  • 20,000 new drivers sign up for the service each month.

  • Lured by high signing bonuses and hourly guarantees

  • but what happens to drivers when Uber goes back on its word?

  • More than 50 L.A.-based Uber drivers gathering in this North Hollywood parking lot tonight

  • voiced their displeasure with continued rate cuts by the popular ride sharing app.

  • None of us have anything against the app.

  • Aya Valilar has been an Uber driver for a year and a half

  • but says her take home pay continues to drop.

  • I've experienced 4 cuts...

  • ...since I started.

  • It was $2.50 a mile when I started, a year and a half ago

  • and now we're at a $1.10 a mile.

  • You can't make a living off of that.

  • Okay, the best part of all of this,

  • One of the drivers featured in the video

  • is now one of more than 1,000 drivers

  • who've been protesting the company's policies.

  • Drivers surveyed across the nation

  • say they're making from about $5 dollars an hour

  • to $20 dollars an hour.

  • Meaning if they're working 40-hour weeks,

  • that's between 10 to 40 grand a year.

  • Their fares, of which Uber gets 20 to 25 percent,

  • must also go to:

  • Gas,

  • Tolls,

  • Car Washes,

  • Wear and tear,

  • Maintenance,

  • and Insurance.

  • Which brings us to

  • Mission #4: Regulations are for Suckas

  • In April, Uber rolled out a $1 dollar, "safe-ride" fee.

  • So after years of operation, Uber has decided to pass the cost of safely running a business onto the consumer.

  • Here's what Uber says the $1 "safe-ride" fee pays for:

  • Background checks,

  • Vehicle checks,

  • Driver safety education, and

  • development of "safety" features in the app.

  • So you're favorite Chinese Food company is going to start charging a...

  • ..."safe-food" fee.

  • Give me $1 dollar and I make sure there's no rat poop in your egg roll.

  • So just how air-tight are these background checks?

  • "I have a 3-page rap sheet"

  • Reformed California criminal,

  • Beverly Locke, agreed to help us test the system.

  • Uber says it does not hire anyone with severe driving violations

  • or convictions in the last 7 years for violent crimes,

  • felonies, sexual offenses, drugs, or DUIs.

  • Locke has priors in California for burglary, drugs, and assault.

  • And she's still on probation.

  • Yet, after she filled out Uber's online application

  • this ex-con, was hired to be a driver.

  • I would pick somebody up take them to the airport

  • and my second thought would be to go back to that house, see what's in there.

  • The Taxi, Limousine, and Para-Transit Association

  • claims that 30 to 40 percent of a traditional taxi's operation expenses

  • consists of regulatory costs.

  • Which Uber avoids.

  • Most Important: Primary Commercial Liability Insurance

  • Mission #5: Tricky Terms

  • Uber claims to carry a $1 million dollar umbrella policy

  • for instances of accidents with passengers in the car.