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Uber Investor Mistakenly Claims Stock Is Toast Without Kalanick-Like CEO

Last Updated September 23, 2020 12:53 PM
Lawrence Meyers
Last Updated September 23, 2020 12:53 PM

Bradley Tusk, an early investor in Uber Technologies and its first political strategist, believes  current management lacks the innovative and intense vision of founder Travis Kalanick and that Uber stock will remain in the dumps as long as that remains the case.

No Confidence in Management

Bradley Tusk says the reason that Uber stock is in the doldrums is that there is not any confidence in management and investors clearly prefer to have the ruthless tactics of the original CEO in place.

Bradley Tusk may be right in that Travis Kalanick was able to effectively shoehorn Uber into every major market simply by ignoring state and local regulations. He simply didn’t care. He was a bull in a china shop, and that’s the reason that Uber is in New York and other formerly impenetrable taxicab markets in the first place.

Former CEO Was a Nightmare

Yet Bradley Tusk has a short memory.

Bradley Tusk seems to forget that Travis Kalanick was a crisis reputation manager’s dream client. The former CEO simply could not help but put his foot in his mouth repeatedly.

He fostered a hostile work environment, complaints of sexual harassment were rampant, numerous senior managers left the company, and was so arrogant in his dealings with government regulators that he even had a fake app designed at one point.

The initial recruitment drive for drivers blatantly misrepresented the possibility of earnings, countless drivers were lowered into buying and leasing their own vehicles that they would be unable to afford, and virtually every tactic used was surrounded by dubious ethics.

Not everyone agrees with Bradley Tusk as to why Uber stock is faltering, however.

Who’s CEO Is Irrelevant

Ed Butowsky, Managing Partner at Chapwood Capital Investment Management , disagrees with Bradley Tusk that Uber stock is flailing because of the CEO. He has a much simpler explanation for Uber stock’s problems.

“All that matters is competition. As competition increases, prices drop, and earnings decline. Convenience and price are all consumers care about, and that alone will dictate Uber’s future.”

Nor does Ed Butowsky believe that Uber Eats or similar programs will make a difference for rideshare, saying:

“It’s still about competition. Uber Eats is just one of many delivery services.”

Ed Butowsky is correct. At this point, the bull-in-a-china-shop approach is no longer required because the market has been established.

It is now, indeed, only about competition.

Disclaimer: This article is intended for informational purposes only and should not be taken as investment advice.