If you had a chance to invest in China-based smartphone startup Xiaomi or Uber – the topped venture capital-valuation companies at $40 billion or more – then The Skinny suggests Xiaomi was the better bet. Remember Aereo, the streaming service that fought broadcasters over copyright all the way to the Supreme Court, lost and is now in bankruptcy?
Uber and Lyfts may be “snappy,” cool apps but Aereo was “cool,” too – and was thrashed legally.
The next “dot com” bust (remember the 2001-2002 meltdown of the dot com economy and the Internet bubble?) could very well be the next blowout on the Internet superhighway even as venture capital investors continue to pour money into the “shared” sector. But unlike the “dot com” meltdown, which ended up being a house of cards built on too many business-plans-on-napkins concepts, the shared sector faces litigation. Lots of it.
Yet the fever for the sector continues. As The Associated Press noted last week, VC investing has returned to levels not seen since the dot com era. Leading the way was Uber. “The two biggest deals last year were separate rounds of investment in Uber Technologies, the high-flying and controversial ride-hailing service, now valued at $41 billion. Each round was pegged at $1.2 billion.”
The establishment rebels
Shared economy services from Uber and its rival Lyft to alternative bed-and-breakfasts and more have not only ruffled the feathers of established rivals but also face a rapidly growing backlash from regulators at local, state and national levels.
Did shared economy entrepreneurs, investors and backers really believe that taxi drivers and bed-and-breakfast owners wouldn’t react negatively to the threats to their livelihoods?
Did you really expect governments and regulators like RDU International to turn a blind eye to these largely unregulated services?
Uber is facing growing troubles, especially overseas. But the latest salvo came Friday when Uber and Lyft were sued in federal court in Boston.
The aftershocks of a court victory there by the establishment as reflected by the taxi drivers would be felt across the country.
Taxi drivers in the Triangle already have threatened to go on strike. Will they be the next to sue and seek an injunction?
Meanwhile, North Carolina’s General Assembly and the City Council of Raleigh are now actively debating what to do with these startups.
Isn’t it fair to assume that much of Uber’s recently raised capital that thrust its value so high might soon be spent on court fights here, there and everywhere?
Meanwhile, the RDU-Uber spat over drivers continues.
Here’s the Associated Press account of the taxi suit in Boston. Watch for similar stories and headlines at a “shared economy” fight in a community near you:
Boston taxi drivers sue city over ride-hailing services
A group of Boston taxi drivers is suing the city, saying officials have violated their rights by allowing online ride-hailing services such as Uber and Lyft to operate without following the same rules taxis do.
The Boston Globe reports (http://bit.ly/1yvQAyK) the lawsuit filed in federal court Friday accuses the city of destroying the value of the medallions taxis must buy to operate, and asks unspecified monetary damages.
A city spokeswoman said officials hadn’t received the complaint Friday and officials will review it. A city advisory commission has been examining the regulations.
The lawsuit also challenges proposed state rules to have the Department of Public Utilities regulate ride-hailing services as “transportation network companies.” The legislature hasn’t approved the proposal. The lawsuit asks a judge to stop the state from enacting it.