Light Reading

Uber Thumbs a Wireless Ride With AT&T

Dan Jones
5/29/2014
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Private car ordering service Uber is hooking up with AT&T, with the operator acting as a key US wireless services provider for drivers and pre-loading the app on Android phones it sells from this summer.

Startup Uber describes the tie-up as "a first-of-its-kind alliance" in a blog. AT&T Inc. (NYSE: T) will be one of Uber's "key providers of new wireless service to drivers" on the platform, which is available in more than 60 US cities. Uber has expanded service to 100 cities worldwide following its massive $258 million funding round in August 2013. (See Baby, You Can Fund My Car: Uber Drives August VC.)

And it's looking for further backing: Uber CEO Travis Kalanick said during a Recode Conference session Wednesday that the startup is looking to raise more money.

Uber is facing revitalized competition from rival startup Lyft, which closed a $250 million investment round in April. (See Lyft Drives Mobile VC Funding to $1.4B in April.)

For AT&T, the Uber engagement is yet another sign of its desire to be at the heart of the growing connected car ecosystem. The operator is currently working with GM, Audi, Tesla, Volvo, BMW, Nissan and others on connected car platforms, services and applications. (See AT&T Makes GM Cars a Data Plan Add-On and Volvo: AT&T HSPA+ Can Drive My Car.)

— Dan Jones, Mobile Editor, Light Reading

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mhhf1ve
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mhhf1ve,
User Rank: Light Sabre
6/4/2014 | 6:59:37 PM
Uber vs Lyft..
I get that the value of being Uber (or Lyft) is greatly enhanced by being the dominant marketplace (so they can be the eBay of car sharing), so this partnership makes total sense to Uber to get its app out in the hands of anyone who might even want to try it.

But at the end of the day, is Uber (or Lyft) really sitting on a huge market? If they displace the entire taxicab industry... have they made back their investors' money? Or is the ride sharing market much much bigger than that? 
SReedy
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SReedy,
User Rank: Blogger
5/30/2014 | 10:35:08 AM
Re: partnership details
Yeah, that's the other thing -- Uber is still not in a lot of cities. So, if you live basically anywhere besides a major city, then why would you want it pre-installed? 
KBode
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KBode,
User Rank: Light Sabre
5/30/2014 | 8:47:47 AM
Re: partnership details
Just as long as users (especially those in markets where Uber is banned) can uninstall it when they want. My devices already come with enough applications I don't use that I'm not allowed to eliminate despite owning the device.
kq4ym
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kq4ym,
User Rank: Light Sabre
5/30/2014 | 8:31:52 AM
Re: partnership details
Probably a very smart move on both parts. Of couse Uber is going to see the most immediate benefits, but AT&T will ultimately gain over the long haul as it get associated with more and more of these type of cross-promotion deals.
briandnewby
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briandnewby,
User Rank: Light Sabre
5/29/2014 | 2:28:47 PM
Re: partnership details
I definitely agree Uber needs AT&T more than AT&T needs Uber.

The enabler thing is really simplistic, just that the network is the backbone for applications.  Going forward, though, we would target new white-space wholesale opportunities to be, essentially, market makers at times.

Sad story--I had an intern look at the potential for video downloads in the early 2000s, thinking that Sprint had an opportunity there, maybe--particularly if this nutty idea ever took off that theaters would use digital projectors.

Our intern felt that online gaming (not yet a thing) would be a bigger deal, perhaps.  We presented all of this and literally were laughed at (a president of a Sprint division, no longer there).

That intern went to have enjoy a great career at Verizon.

I hopped in a cab a few years ago and someone had left an annual report supplement for Level 3, demonstrating how it owned this market space.  10 percent of its revenue at the time was coming from the potential companies we listed (the presentation had the logos, just like ours did).

I scanned it then and just re-read the Powerpoint, including the slide that began, "Online Video is a Major Source of Demand Growth." 

Anyway, I think this is where I type some hashtag followed by missed opportunities.
DanJones
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DanJones,
User Rank: Blogger
5/29/2014 | 1:39:48 PM
Re: partnership details
This is not just Uber drivers with Android phones, AT&T plans to pre-install the Uber app on Android phones it could sell to all its subscribers/new customers from this summer. 

 

I double-checked with AT&T, they say:

"The Uber app will be embedded on new AT&T Android smartphones later this year. We expect to announce the first device with Uber this summer."
SReedy
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SReedy,
User Rank: Blogger
5/29/2014 | 1:39:16 PM
Re: partnership details
I think Uber needs AT&T more than AT&T needs it, but I agree it's a bit strange. What do you mean by the "enabler concept"?
briandnewby
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briandnewby,
User Rank: Light Sabre
5/29/2014 | 1:38:08 PM
Re: partnership details
You know, one other goofy idea--such a partnership, whatever that means, could also mean that AT&T encourages employees to use Uber when traveling.  Maybe this is a reverse Uber to business sale.

Just trying :-), although if they aren't doing this kind of thing with large companies, I think they should.  Being able to market to large companies' employees might be a clever way to gain critical mass in order to have more weight when fighting cities' taxi regulations.
SReedy
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SReedy,
User Rank: Blogger
5/29/2014 | 1:38:05 PM
Re: partnership details
Uber recruits through Craig's List? Yikes. Is that for taxi drivers or UberX?
briandnewby
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briandnewby,
User Rank: Light Sabre
5/29/2014 | 1:35:19 PM
Re: partnership details
@SReedy I had the same question.

There are other elements of networks, too, I suppose.  When I was at Sprint Wholesale, John Donovan (then a consultant, now AT&T) pushed kind of an enabler concept with us, and so I guess there's that.  AT&T still has local and long-distance assets, although I can't see how they'd be used, really, in this example.

If it's just about phone real estate, hmmm.  I mean, the app can be downloaded pretty easily.

If it's just marketing spin, which is what it feels like, I guess that's good, too--"Hey, look urban hipsters, we're so hip our phones come with the apps you need, like Uber."

It's just odd, though, in that I doubt AT&T needs Uber's brand to sell phones.  Maybe the bigger picture will unfold. 
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