Most threatening to Uber's long-term viability are putative class action lawsuits, such as one alleging that drivers were misclassified as independent contractors[1]. If Uber is forced to reclassify its drivers, it could literally upend the economics of Uber's business overnight.
Because of the legal and regulatory challenges it faces, I think Uber is actually in a far riskier position than Groupon ever was and Uber's valuation seems to indicate that investors have too significantly discounted these risks. At this point, I actually think Uber might for some investors prove to be a binary investment. That wasn't even the case with Groupon, which still has a $4 billion valuation despite its decline.
What does that even mean, at scale? If it is a money printing press for everyone involved, you have to postulate either that the entire market grows rapidly (for "local businesses", no matter what they do, in this case) or you've (at best!) created a middleman to tax all transactions in the system.
I've heard complaints about how increased competition with other drivers and slashing fares are causing driver's salary to dramatically decrease lately. I can't comment on the "average" driver salary however, it is a job that comes with some serious caveats, which is the territory of being an independent contractor - so because of that real salary is significantly lower than that of employees making the equivalent.
this may be of interest
http://www.washingtonpost.com/local/trafficandcommuting/some...
[1] http://www.bloombergview.com/articles/2013-06-25/why-are-so-...
Groupon's promise to local business owners was that offering a Groupon deal was an easy way to attract new long-term customers en masse, despite the sizable up-front loss. History showed that that did not happen for many businesses who used Groupon.
Similarly, so much of Uber's marketing is targeted towards the supply side (i.e. drivers) and the promise of making more than they could at any other available job, with "flexible hours" and other dubious perks. This is just the latest article to show that that is not the case.
Groupon's and Uber's business both depend on acquiring and retaining the best local businesses and drivers respectively, and as these kinds of stories keep coming to light, I wonder whether Uber will be able to retain all the drivers they acquire. Lyft has focused from the start on making their drivers happy, which is a smart way to differentiate from Uber's mercenary mindset, but I also wonder if that is enough to really differentiate itself in the eyes of drivers, at least enough to make Uber really worry.
In all honesty, I am rooting for someone to beat out Uber. When I first learned about them about 2 years ago, I marveled at their business model innovation and their ability to execute. But everything I read (and personally experience) about Uber tells me that they are becoming the new Investment Bank, both philosophically and culturally.