Uber was founded as "UberCab" by Travis Kalanick and Garrett Camp in 2009 and the app was released the following June. Beginning in 2012, Uber expanded internationally. In 2014, it experimented with carpooling features and made other updates. Klout ranked the San Francisco-based company as the 48th-most powerful company in
The legality of Uber has been challenged by governments and taxi companies, who allege that its use of drivers who are not licensed to drive taxicabs is unsafe and illegal.
Uber uses an automated algorithm to increase prices to "surge" price levels, responding rapidly to changes of supply and demand in the market, and to attract more drivers during times of increased rider demand, but also to reduce demand. Customers receive notice when making an Uber reservation that prices have increased. The company applied for a
The practice has often caused passengers to become upset and invited criticism when it has happened as a result of holidays, inclement weather, or natural disasters. During New Year's Eve 2011, prices were as high as seven times normal rates, causing outrage. During the 2014 Sydney hostage crisis, Uber implemented surge pricing, resulting in fares of up to four times normal charges; while it defended the surge pricing at first, it later apologized and refunded the surcharges. Uber CEO Travis Kalanick has responded to criticism by saying: "...because this is so new, it's going to take some time for folks to accept it. There's 70 years of conditioning around the fixed price of taxis." Uber released a post detailing why surge pricing is in place and how it works. They emphasized that without surge pricing, Uber would not have its trademark service of pushing a button and getting a ride in minutes. This is detailed in a case study around a sold-out-concert at
Surge pricing makes supply and demand match so efficiently that the waiting time is almost always below five minutes, regardless of the circumstances. Surge pricing increases economic efficiency in two ways: 1. rising prices motivate more drivers to start driving, 2. when there are not enough drivers for everyone, the rising prices make only those customers accept a ride whose needs are highest.
When a surge in demand in the New Years Eve did not rise prices, due to a fault in technology, fewer drivers chose to start driving and fewer customers chose alternative transportation methods. Therefore, waiting times became long and just a few lucky customers got a car, most were left without. In terms of efficiency the situation was a failure.
Also many airline and hotel companies price dynamically. The difference to Uber is that Uber makes its pricing transparent
During the initial development of the Uber app, the company created a think tank consisting of a nuclear physicist, a computational neuroscientist, and a machinery expert who worked on predicting demand for private hire car drivers and where demand is highest. Later in 2012, Uber launched its Uber Garage initiative in
In August 2014, Uber launched UberPOOL, a carpooling service, in
Uber CEO Travis Kalanick has spoken about his desire to eventually move to using self-driving cars for Uber vehicles. By May 2015 the company had hired a large number of