By Laurence Darmiento, LOS ANGELES TIMES
Eighteen years ago, two computer engineers said to be frustrated by their experience ordering a taxi in Paris hatched a wild idea: a mobile app that would allow users to hail a ride from their smartphones.
Their startup, known as Uber, initially clawed its way to success with a growth-at-all-costs strategy that sometimes involved operating without municipal consent, ignoring court orders and clashing with local regulations.
That ethos catapulted the maverick company to the top of the ride-sharing business, with its gig drivers providing nearly 14 billion trips last year globally.
Now, the San Francisco tech giant is at a crossroads, waging a bitter fight with state trial lawyers involving dueling ballot measures while it faces a raft of sexual assault lawsuits that could significantly increase its legal costs.
The outcome of the fight could have ramifications not only for California consumers, but for Uber’s ability to finance a multibillion-dollar expansion into the all-important robotaxi business — where it faces increasing competition from Waymo and Tesla.
“Uber is facing an existential threat where they’re not sure if robotaxis are going to be a margin enhancer or some very large competitive threat,” said Morningstar analyst Mark Giarelli.
Uber has argued that it is well-positioned to compete in the autonomous vehicle market and is opposing a ballot measure that would make it easier for the company to be found liable for alleged assaults committed by drivers.
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A hidden war chest?
The rapid growth of the reserves has drawn scrutiny from one advocacy group.
L.A.-based Consumer Watchdog alleges in a report released last week that Uber is creating what amounts to a “hidden war chest” to free up billions of dollars on a tax-advantaged basis for robotaxis.
“This is a big, big piggy bank for Uber that allows it to stash away money that can then be used for robotaxis or anything it wants at a later date if its campaign to limit liability is successful,” said Jamie Court, president of the group, which is partly funded by trial attorneys.
