We are living into an era that every other techie, college drop-out, alumni of fancy institutes think of themselves turning into Steve Jobs or Bill Gates or Apple or Google over-night. The American economy is running into un-necessary euphoria which will lead to a major collapse bigger than 2008. When it is a bull run, we simply forget the basic rules of how the economy and money work? As in the era of the rising use of digital platforms and every freak turning into some money or finance guru, we think that simply following them you will become millionaire or billionaire. And also, the success has many fathers similarly you cannot repeat the success Bill Gates or Warren Buffet have achieved, you cannot be a copycat. Uber can be said the classic example of Capitalism being a problem for the common man because startups think of themselves as beggars den turning into billionaires after going public on NYSE. Such businesses cannot complete a century because technology is rapidly changing but is it affordable and sustainable? The idea was good that when its founders were charged 800$ for a trip in a taxi and they thought to build a platform to help others but even in that thought they have to take help out of drivers. But it was past and such single example cannot be compared to thousands of other drivers earning their livelihood. Already the World is fearing that automation will make another level of joblessness, as it is said that money makes money, the rich will get rich because they want some out of the World percentage of returns for their returns but doesn’t want to pay or share their slice of the pie.
Many people think that you will become a millionaire by making an app, but that million is paid by someone you aren’t creating any value, Apple, Google, Microsoft, Amazon have created value, they have made ecology and infrastructure for themselves and others. When compared companies like Uber [TNC-Transportation Network Companies] is using the infra of others and trying to make profit out of it, they only can be termed as a platform where other jumps in because cars aren’t provided by Uber or any other like them, the EMIs are paid by drivers and in wooing to Wall Street Bulls they are cut shorting the incentives all around the World, as Uber has said that Uber Drivers aren’t employees to escape themselves from minimum wage and other benefits they term them as private contractors, but all the burden is on drivers, this model cannot work, all the investment bankers analysts and top cadre people will be stupid if they don’t sense that the growing indifferences between management and drivers cannot survive for long, investors will get trapped if management doesn’t become sure of having a sustainable model for benefits to all stakeholders. Companies coming out of an app doesn’t have a majority of the asset of themselves, the cars and drivers are their assets but the company isn’t respecting them adequately. Every now and then company is facing troubles around the World and trying to escape themselves by paying some fines in millions but why aren’t they investing into the proper model because management may want to become a billionaire at the cost of others but you cannot fool everyone every time. Drivers cannot become cash cows for the company, because they may not be like some clever crooks of Finance World but that less educated person can sense that he/she is being fooled by management.
Many companies haven’t sensed Indian market, I know in 2013-14 when Uber started giving free rides euphoria was big, media claiming that people are leaving their corporate jobs to become “Entrepreneur” by driving cabs. Many companies model only based on gathering a crowd by wooing them with freebies have failed to retain the customers. The Valuation Analysts should use their brain if they have it, active apps on phone cannot be a valid ground to value a company, have many users are actively a rider on the platform should be considered to value earnings and future. Companies are making all good and worse efforts to make a space for themselves which means that the business model isn’t that good as it seems. Bangalore is the startup laboratory or the bubble factory as I term them, propaganda was created which cannot be sustained for long because even local students coming from top business schools don’t really understand Indian market, it is a mixed market where someone’s monopoly cannot work for long. Now many are facing heat to make their ends meet and getting trapped into debt. The number of private vehicles in the Indian market was increasing tremendously and the already engaged into transport industry were facing heat since many times, we already have public transport, rickshaws and taxis from decades, Uber or something like that was only a label for Urban people boasting of themselves for some time. Even cars cannot beat two-wheelers sales because India is a price sensitive market and two-wheeler is the nerve of working-class people, already the economy and banks and NBFCs are facing pressure which they only created by distributing money like Kings, now they all assets quality are turning bad and all the stakeholders are facing crunch. Investors will run away once they cash in, they don’t care about the business, people or economy they care for themselves only, it is a con side of Capitalism. People boast of that stock market can make you billionaire but someone has to bear the hit, as Uber flopped on NYSE for some time, it has hit Soft Bank in their valuations, because they have put foot into two horses in India namely Ola and Uber and you cannot ride on two horses at a time. If the company really is that visionary then they should invest in building transport infrastructure or ecology which can benefit all over the long term.
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