The company which has been in the news likely more than most is Uber. The company Uber has a distinct advantage of cabs in any city. it does not own any physical assets. The cab companies own the cars or the medallions (taxi license) in order for the driver to be dispatched from a person who matches calls for service and where the cab is. In the Uber method cars driving by people  are connected to the net by their phone and the driver owns the vehicle, the driver  use the phone to be told of their locations and the location of clients. Equally important is the client can monitor the process of their phone and Uber takes a piece of everything the car drivers make.

In  a book called Wild Ride – Inside Uber’s quest for World Demoniation by Adam Lashinsky published by Portfolio/Penguin Books, NY, 2017, Mr. Lashing describes the evolution of the company. For a company like Uber to exist 3 major items had to be invented and be used. The three are email, easy access to capital and the harnessing of artificial intelligence. These three things are the building blocks of companies such as Uber. It is said, in most developed countries the amount of people which own smart phones is well more than 50%. Whether everyone needs a smart phone is not the question – it is do they use them? The difference between one start-up and another is often easy access to capital, all companies have ideas – are they great is a more difficult to answer.

In the late 1990’s the founders of Uber were wondering is it possible to use your cell phone to place an app on your phone for you to call a limo and be able to track it. It took a couple of years of playing with that question because the system was not there yet. It had parts such as every cell phone has GPS capabilities. The use of AI or artificial intelligence would come. The AI would do all the work from the dispatcher only on  your phone. Once in was possible Uber started with limo service which were used by venture capital groups in San Francisco and they started to see the what Uber could become. They brought money and the founder of Uber through his previous start ups was good at raising money from venture capital groups.

The AI developed over time which allowed the company to move from limo to cab service in urban areas. After seeing cabs, the model was used on other items such as Uber Eats and many others – some which worked and some that did not.

Linking to dividend paying stocks, it takes time before all the features are in place to make money and most people do not see it. They can see one aspect or maybe two but not the third. In every industry there are regulations which help protect the existing companies and companies similar to Uber fight the regulations to remove the barriers. If the regulations were not on the cab business, it is possible other groups would join in the fight to save the regulations. In many people’s eye the cab business needed a shake up and Uber was there to do it. For your investments you have to ask who would want to shake up your industry?

There are more questions than answers, till the next time – to raising questions.