Wall Street is where private businesses face the ultimate litmus test. It is where all the lofty valuations go out the window, and analysts and investors alike go through the business inner details with a fine-toothed comb. It was revealed to a great deal when much-awaited IPOs of Uber and Lyft more or less fell flat on their faces, and the vigor of it was underscored with quite prominence with the whole ongoing WeWork debacle. So much so that the CEO of WeWork, Adam Neumann, had to step down, and Uber and Lyft have been trailing almost 40% behind their opening marks.

This pressure is getting to these businesses — businesses that were once witnessing lofty valuations and had private investors drooling all over them.

New leadership had been put in place at Uber with the hopes of turning a new leaf, but the problems with the business have continued to mount up, and there is no clear point of profitability in sight. And in, what looks like, an effort to get out of this pickle, Uber has decided to aim becoming an app for your life, or as the company called it — the operating system for your everyday life. And this is where I think the mistake is being made.

WHAT IS THE LATEST FROM UBER

The company has just come up with a new app — Uber Works — to provide an alternative to the staffing agencies temp workers use to find temp gigs and shifts. To begin with the company will be working with staffing agencies. Now, it could end up becoming a marketplace for staffing agencies, or it follow a hybrid model where it is catering to some staffing agencies while serving to some other businesses directly — which is what I think the business may be thinking of doing.

From what it looks like, this is something that has been in works for a while now, with Financial Times having reported on it a year back.

Now, no matter how the business tries to justify this move, and show that it is aligned to its overall vision, I think that is a lot of bullcrap, and it would be a tough sell.

WHY IS IT A MISTAKE?

Uber has been a ride-hailing system for the most part of it, but you forget about the ride-hailing, and it could very easily call itself a system that enables transportation from point A to point B. In the case of ride-hailing, the thing getting transported from A to B are humans. In the case of Uber Eats, it was food. For the freight business, it would be commercial packages.

But the core ethos remains the same. The basic premise behind the business remains the same. Enabling better, cheaper and more efficient transportation from one point to another using technology and a network of vendors and partners.

That helps you expand the business, without having to dilute your brand positioning, identity, and the grandiose vision.

Now with one simple detour, the business has fucked it all up.

What is Uber now? Could you explain that in simple terms? Ever?

IT WASN’T NEEDED EVEN FROM A BUSINESS PERSPECTIVE

Uber had a lot of ground to cover even in the transportation business. The core business of ferrying consumers hasn’t been fully saturated yet, and they are still tweaking the models oh-so-often to even start thinking that they have done all that they could have done in the space.

The second business of food delivery, Uber Eats, has tremendous potential to offer, and the business space itself is in such a nascency that if Uber were to just consider concentrating on that, it would have kept the team busy for years to come.

But the third business is what is most interesting. Transporting freight and cargo. This is where I believe Uber has dropped the ball and screwed up on a scale much larger than the other two businesses combined.

Just look at one geography — India. India has a few unicorns in this space already, and all they have been trying to do is solve problems in the freight and logistics industry. An industry that’s right up Uber’s alley, and one that has a perpetual demand and an utter lack of quality-assured services. Something Uber could have focused on solving, combining its learnings from moving traffic around the cities in countries all over the world.

In the time it would take the ridesharing market to get up to $250 billion, Indian logistics and freight market alone would have surpassed $300 billion. If profitability was all Uber needed to focus on, this could have been the way to go.

And the space of freight and cargo is a segment that will never see a shortage of demand. As long as there are businesses looking to get stuff around to cater to their consumers, this business will be there to thrive. Just look at how much different businesses have been investing in bolstering their capabilities in this segment.

Now, while some of these businesses are verticals created within their respective companies to cater to the internal demand, the others are pure-play logistic providers. And even when it comes to businesses investing in logistics to cater to their internal requirements, you have to be mindful of the fact that only a handful of businesses have the capability of doing so. Most of them would still be looking out for service providers, and if Uber wanted to, it could have been capitalizing on that immense demand.

BUT THAT’S EASIER SAID THAN DONE, ISN’T IT?

Well, yes and no. It is absolutely true that catering to these challenges would be a herculean task in itself, but that is a challenge with practically everything that has huge potential rewards to offer.

Despite Uber’s current inability to turn its passenger-ferrying business into a profit-making mean machine, I respect them for having been able to successfully challenge the status quo. They have changed the level of services consumers come to expect out of their cab drivers and rides in general. They have changed the service drivers try to deliver to their passengers. They successfully brought about a transformation in how the cab industry works. Period!

And that is what the freight industry needs as well. What businesses need is a partner they can rely on to ferry their goods around. Great quality of service, assurance of timely deliveries, and a transparent and simplified pricing structure. And these are all the things Uber is known for!!! Are there surge prices? Sure. But even in freight and cargo delivery, do you really think surge prices wouldn’t exist? Whether it is high demand, festivals or inadequate supply of drivers at certain times of the years, the prices keep on fluctuating. Even the big enterprises who have signed up logistic partners for their everyday freight needs would not be able to negate the possibility of prices fluctuating due to unforeseen circumstances. And most of them would be fine with that. What hurts their business more is not the change in prices, but the uncertainty around delivery. And that is one pain-point, Uber could excel at solving.

All in all, I am not sure what Uber Works is going to do for the business overall, but one thing I can say for sure — It was a huge letdown. When you look up to a business to the extent I have been fascinated with Uber, a shitty move like this comes across as extremely anticlimactic.

Uber should have known better. Dara should have known better.

UBER RUSHED ITS IPO

I believe Uber rushed in its decision to go public, and that has been the primary reason behind this extensive unraveling. The business was still trying to fix inefficiencies and shortcomings in the way it operates and makes money, and in such a time, you needed to stay private, keep your head down, and continue to innovate. Continue to challenge the status quo! It could have turned out to be something exemplary.

Instead, now Uber has to deal with the everyday grind of proving itself to the wall street analysts and investors, trying to prove to them that it wasn’t unworthy of the staggering valuations it once used to witness.

There have been very few companies that have made the kind of impact that Uber showed the potential to make, and a street move like the one they pulled with the Uber Works app is disappointing.

That’s it for today, see you tomorrow!