Why Travis Kalanick is on a mission to smash the taxi cartel

In 2009, when Travis Kalanick and his friend Garrett Camp came up with the idea of "pushing a button to get a ride" (reportedly on a snowy night in Paris when they couldn't find a taxi), his dream was to make enough cash to live like "ballers", or high-rolling sportsmen, says the Financial Times.

"Uber has rapidly evolved from a private, invitation-only limo service into one of Silicon Valley's hottest, most controversial, firms" and Kalanick has emerged as one of its "most provocative street fighters".

In the wake of the biggest scandal to date about his firm's culture (see below), Uber is in the doghouse. Yet investors don't seem to mind, says Management Today. Valued at $17bn-$18bn this summer, the taxi app was said this week to be near to sealing a new funding round, valuing it at $35bn-$40bn.

Try 6 free issues of MoneyWeek today

Get unparalleled financial insight, analysis and expert opinion you can profit from.

Start your trial

Sign up for MoneyWeek’s free twice-daily newsletter.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Sign up

Acquaintances are in two minds on Kalanick, says Business Insider. Many see him as a business "phenomenon", perhaps up there with the Valley greats. Just as many reckon he's an egotistical "asshole". The two aren't necessarily incompatible. As one of his earliest investors explains, "it's hard to be a disrupter and not be an asshole".

Kalanick seems to see himself in the mould of an Ayn Randian hero. He is evangelical about his mission to smash the taxi cartels and the regulators propping them up.

"I'm a natural-born trust-buster," he recently remarked. His former Twitter avatar was the cover of Rand's libertarian classic The Fountainhead, which celebrates the triumph of the Nietzschean individual, the "ubermensch".

He later changed it to Alexander Hamilton, one of America's founding fathers: "They have to hustle just like an entrepreneur, because they're creating a country. How cool is that?"

Brought up in a Los Angeles suburb, Kalanick, 38, dropped out of UCLA in 1998 to join Scour, a start-up founded with fellow students, says the FT. The "proto-Napster" file-sharing service ended badly, with legal actions from media groups.

But in 2001, he formed Red Swoosh, a "more legitimate peer-to-peer application" and sold it in 2007 for about £15m. "By Silicon Valley standards, that's almost a failure." But it left Kalanick with enough money to invest in other start-ups, including Uber, which launched in 2010.

"Kalanick's fighting instinct seems only to have been stoked by success," says Vanity Fair. He says he won't stop "until he has won every city across the globe". His ambition extends beyond taxi rides. "If we can get you a car in five minutes, we can get you anything in five minutes," he says outlining a vision of a company that could dominate the "everything economy" in much the same way as Amazon.

"For all his rough edges, Kalanick's commitment to his company is almost tender." He seems "genuinely shocked" when asked if he would ever sell out to a bigger player, such as Google. "You're asking somebody who is really happily married, So what's your next wife going to be like?' And I'm like, 'What?'"

"Every business needs a jerk"

There have been allegations of "corporate sabotage" against its smaller rival, Lyft; claims its drivers are poorly vetted; and near-constant accusations of sexism. But all that pales against the stink that erupted last week when senior executive Emil Michael was overheard at a PR dinner threatening to spend $1m on investigators to dig up dirt on critical journalists.

It then emerged that another executive had used Uber's "God View" system to monitor another hack's movements in real time. The picture painted, says Jenni Russell in The Times, is of a "threatening, amoral corporate culture".

The anecdotal evidence that Uber "has played fast and loose with its customers' data is pretty compelling", says Neil Irwin in The New York Times. Uber is a multi-billion-dollar global operation yet it still has the "gung-ho" mentality of a start-up. "Sheer belief in the rightness of the cause has blinded" executives "to their responsibilities".

Uber's battles with entrenched interests have affected how it operates, says Kara Swisher in Vanity Fair. "What we maybe should have realised sooner was that we are running a political campaign and the candidate is Uber", Kalanick remarked recently.

Uber is not alone "in being tempted to fight fire with fire" when confronted by critics, says John Gapper in the FT. But it goes further than most, borrowing a model of "aggressive counter-attack" from politics.

"Going negative, as every politician knows, can be very effective, but is also dangerous" particularly if it fuels the view among customers that you are a bully. Uber should focus on neutralising the opposition, not stirring it up. "Disruption means often having to say sorry."