In today’s world, one would be hard-pressed indeed to come across someone who has not heard of Uber in any way. From a ride-sharing startup on the streets of San Francisco to a global transportation behemoth valued at a mind-boggling $70 billion, the startup, as they say, has apparently seen it all. People attribute it’s unprecedented success to a variety of sources - ranging from novel use of technology, tapping into previously unexploited geographic regions and downright strong-arming local rules and regulations to level the playing field against local competition in emerging markets. Whatever be the modus operandi, the end result is as clear as daylight for all to see - an Uber is ubiquitous to a cheap, reliable and efficient mode of transportation around the world, so much so that “uber” is now a verb.

But in this tale of guns and glory to rise to the pinnacle of success, there is more than meets the eye. Even in the early days of its implementation, Uber came negatively into the public eye when an internal tool named “God view” was used freely by Uber employees to track anyone taking an Uber ride at that point - enabling them to tail anyone from celebrities to ex-beaus. When faced with media backlash on this issue, an Uber executive euphemistically suggested hiring private investigators to dig up dirt on the journalists covering the story, provoking massive outrage. While these early transgressions could be forgiven owing to a startup mentality of “move fast and break things”, things did not look up in the upcoming years. Uber was successively accused of promoting sexism and misogyny at the highest levels of the management, allegations of sexual harassment and gender discrimination ran rife, leading to top executives resigning from the organization. Things were also not helped by Uber CEO Travis Kalanick caught on dashcam to be lambasting an Uber driver. More worryingly, researchers showed that the Uber application kept tracking users’ locations even after their ride had ended.

But, ethical and moral concerns aside, there is an even bigger elephant in the room. Uber is not profitable in any single one of the multiple global markets it operates in, and it’s cash burn rate on new customer acquisition and customer retention is astronomical, to put it very mildly. (A more exact term would probably be a clusterf**k). Although Uber CEO Travis Kalanick says he has a roadmap to profitability in the near future, the colossal amount of money that has been spent already makes this a bit hard to digest. While Uber is not a public corporation and thus does not need to appease it’s shareholders, (and obviously, it has had no problem attracting private capital in ginormous quantities so far) the principal source of Uber’s bankroll today is dilution of more equity in successive funding rounds. The company has no assets of proportionate value to back up its multi-billion dollar valuation. It does not own the vehicles, and the drivers are Uber contractors, not employees (as Uber itself has gone out to state time and again, most recently in a class-action lawsuit settlement). It’s self-driving car technology, arguably its most valuable intellectual property, has been locked down in a (potentially lengthy) patent lawsuit with Google.

That leaves the Uber model - an aggregator between supply and demand in a market. While the scale of implementation (and the logistics involved) have definitely been unprecedented, the concept is not new in itself, and Uber shall have a hard time proving the contrary. And Uber’s recent exit from the Chinese market, which until very recently was its second largest, glaringly shows its inability to compete with a well-entrenched local player with relatively deep pockets. Economies of scale have always defined the relationship between price and supply, and there has been a “bubble” so to speak every time the market tried to artificially move against supply-and-demand. Uber’s massive valuation today is no longer a valuable war chest - rather it is on the verge of becoming a very large stone tied around the company’s​ neck. While the successive rounds of inflated valuations allowed initial investors to exit with large profits, it in turn created a vicious cycle that tied in the next round of investors. And sooner or later, this system will implode.

If and when that happens, it would probably send a cold shiver down the collective spines of the so-called “Unicorns” of the startup world. It might as well even trigger a selling frenzy that would cause a market meltdown like the Tulip craze in mediaeval Europe, or the more-recent dot-com bubble on an exponentially exaggerated scale. How and when Uber gets off this burning train - remains the question to be answered.