The Long Car Con
June 7, 2019 9:14 AM   Subscribe

“Uber is the breakthrough case where the public perception of a large new company was entirely created using the types of manufactured narratives typically employed in partisan political campaigns. Narrative construction is perhaps Uber’s greatest competitive strength. The company used these techniques to completely divert attention away from the massive subsidies that were the actual drivers of its popularity and growth.” Uber’s Path of Destruction (American Affairs)
posted by The Whelk (68 comments total) 33 users marked this as a favorite
 
Uber's bet has always been that they could set a pile of money on fire fast enough to get an even bigger pile of money at the end, hoping nobody would notice that the emperor had no clothes.

Also, for some reason, a lot of racism, sexism, and trampling of laws. Not sure how that helps the pile of money burn faster, but they have been really committed to it.
posted by fifteen schnitzengruben is my limit at 9:19 AM on June 7 [26 favorites]


pump and dump in three, two, one....

"so disruptive, we don't need to profit"
posted by Sheydem-tants at 9:20 AM on June 7 [4 favorites]


The piece is encapsulating what we've all known - Uber and the other online livery firms were built on lies and subsidization to help users ignore those lies - but as the disastrous IPOs have shown - in the end, the bill always comes due.
posted by NoxAeternum at 9:21 AM on June 7 [6 favorites]


Profit is so 2005.
posted by Cosine at 9:25 AM on June 7 [1 favorite]


your comeuppance is arriving...
posted by chavenet at 9:29 AM on June 7 [2 favorites]


The idea in "disruption" is to set a system on fire and hope you can build a replacement faster than the old one can be improved. This only works when you have available to you an order of magnitude improvement in scalability the old system can't adopt -- which can be trivial in the world of information/memetics, but is astonishingly hard when you have to deal with physics.

If you can't easily see where the order of magnitude of improvement in delivering the service or product , it's not "disruption" it's "three-card monte."
posted by seanmpuckett at 9:32 AM on June 7 [14 favorites]


Can't wait to have to float these companies with tax dollars in 10 years after they kill mass transit, raise prices to actual cost, and then collapse because no one can afford to get to work. "We have to bail them out its the only way to get around"!
posted by pilot pirx at 9:33 AM on June 7 [22 favorites]


But they're this close to getting their autonomous cars working so that they can fire all those expensive drivers. Really soon now. Just a couple more bugs to iron out.
posted by octothorpe at 9:37 AM on June 7 [9 favorites]


Just a couple more bugs to iron out.

Unfortunately, those stains on the windshields and grills may not be bugs...
posted by entropone at 9:43 AM on June 7 [16 favorites]


The only thing I disagree with in this article is that they brought no technological advances.

I don't know that the app is particularly high-tech as far as apps go, but a central app that hails a driver to my location is something that taxi companies never offered.

Even if I were to (sigh!) call a cab company, they were unreliable. And I'm a white guy! As I understand it, cabs were even less reliable for people of color.

We legitimately do need a central dispatch app, even if Uber and Lyft go out of business, and it goes back to mostly cab companies.
posted by explosion at 9:44 AM on June 7 [31 favorites]


I have to say, though, that if Uber stripped billions of dollars out of the investor class by subsidizing cheaper rides for the average consumer...I'm not going to lose any sleep over that.
posted by Autumnheart at 9:49 AM on June 7 [23 favorites]


(I just wish more of it had gone to the drivers too.)
posted by Autumnheart at 9:50 AM on June 7 [13 favorites]


I have to say, though, that if Uber stripped billions of dollars out of the investor class by subsidizing cheaper rides for the average consumer...I'm not going to lose any sleep over that.

Except that by doing so, they've distorted transit markets and pushed us away from public mass transit at a time where we need to be moving towards it. The reason why subsidized online livery is bad is the same reason that the subsidization of personal vehicles is bad.
posted by NoxAeternum at 9:56 AM on June 7 [61 favorites]


“The Uber of X” came up on the green as a baffling example of “common knowledge”. And I never know what to think: this company also uses tons of money to write laws in TX? This company dodges payroll tax? This company uses unethical practices to manipulate markets? Etc. I know what I think about Uber but with so many people gushing over them (still!) I don’t know what that phrase means...
posted by SaltySalticid at 10:03 AM on June 7 [1 favorite]


Maybe we could just tax gas to its actual cost including externalities (lol)
posted by pilot pirx at 10:03 AM on June 7 [20 favorites]


I also thought that this was an interesting statistic that explained a lot about the livery market:
Taxi demand is sociologically bipolar: 55 percent of demand comes from people earning less than $40,000 per year while 35 percent comes from people earning more than $100,000.
This is why in major cities you saw a bifurcation of the market - high end on call livery and low end taxis, as well as the endemic issues with the latter.
posted by NoxAeternum at 10:04 AM on June 7 [2 favorites]


I'm not sure if number priming is still considered a valid psychological phenomenon, but if it is it surely applies to Uber's stock price. How much is Uber stock worth? Dunno, since it's not making money and will likely never make money, so probably zero or thereabouts, but... did somebody say $45? Sure, that sounds good, $45, let's go with that. Maybe a little below that since some people are saying bad things. Sure, $45, sounds good.
posted by clawsoon at 10:06 AM on June 7 [4 favorites]


Except that by doing so, they've distorted transit markets and pushed us away from public mass transit at a time where we need to be moving towards it.

Sort of ? I mean, they were subsidizing rides and as soon as that scam stops, people will be back to busses.

Which, incidentally, are a much better use case for automated driving than cars - especially in urban areas where speeds are low, because best in class sensors are only good to a few hundred feet anyway.
posted by Pogo_Fuzzybutt at 10:07 AM on June 7 [2 favorites]


“Uber of X” means, in Silicon Valley speak, a startup that disrupts an industry by leveraging tech and the “gig-economy”
posted by Stu-Pendous at 10:10 AM on June 7


Yeah I get that, but my point is it’s also a phrase that tells me that these people don’t know or don’t care about the rather nasty and imo harmful aspects of Uber, some of which are pointed out in this article and other posts and comments here on the blue.
posted by SaltySalticid at 10:15 AM on June 7


It’s probably more like “don’t care”.
posted by Stu-Pendous at 10:17 AM on June 7 [1 favorite]


Sort of ? I mean, they were subsidizing rides and as soon as that scam stops, people will be back to busses.

The concern is that the busses won't be there because municipal transit boards have started treating "ride-share" businesses as a sufficient last-mile offering.
posted by PMdixon at 10:23 AM on June 7 [29 favorites]


There's a massively fucked up thing going on right now in the realm of public companies -- ridiculously high market caps for companies that aren't profitable, and a lack of sufficient oversight on capital raising. So a company like TSLA can raise over 2 billion dollars via convertible bonds, even with massive losses and no accountability for management.

If you stay in the private markets, you can burn cash as long as you kind find a greater fool for your next round of capital raising. In its last year as a private company, Uber ran out of those and started to court "high net worth individuals" (you can think of a better word for people like that, I bet). Now, as a public company, you'd think that Uber would have to make a profit...someday? Soon?
posted by overeducated_alligator at 10:35 AM on June 7 [3 favorites]


From the article:

Uber’s entry substantially increased the demand for drivers. If labor markets worked as predicted by economic theory, this should have significantly increased driver take-home pay and improved working conditions. Instead, Uber exploited artificial market power to subvert normal market dynamics.

Maybe I'm being nitpicky, but it feels like there's been a not-coincidental change of language over the past several decades, where even lefty publications use the blanket term "economic theory" when they mean "neoliberal, 'propaganda wing of the business school' economic theory."

Which is why later you see...

Almost all of Uber’s margin improvement since 2015 is explained by this reduction of driver compensation down to minimum wage levels, not by improved efficiency.

It's almost like people have been saying for 170 years that real profit always comes out of the worker's wages. But you don't even have to be a Marxist to see that the Uber's business model was, is, will always be bunk (as people have been saying for years), and when they go the way of the dinosaur their greatest accomplishment will have been tricking a bunch of ethically-stunted Silicon Valley doofuses with more money than brains to briefly subsidize people's cab rides.
posted by joechip at 10:46 AM on June 7 [20 favorites]


My admittedly hot take is that Uber is a huge bet on self-driving cars. It will be interesting to see whether this essay is or isn't accurate in its dismissal of the potential for automation to lower costs to the point that the company becomes profitable. I hate the way it has become what it is today, but Uber's scale and market power make this a valid question, IMO.
posted by Lyme Drop at 11:03 AM on June 7 [1 favorite]


The concern is that the busses won't be there because municipal transit boards have started treating "ride-share" businesses as a sufficient last-mile offering.

But they have only been doing that instead of, you know, redesigning routes to become more efficient or reliable or lobbying for zoning changes or really anything that public bus companies should have done to make buses more popular inside the 'mile zone' instead of adding 'last mile' solutions that are attempting to grow the bus-using populace. My local bus company has no intention of doing anything to make buses more attractive and at best are commiting to a '10 year redesign' of routes. Like it takes that long to redo some bus routes -no the 'redesign' is mostly just their current 10 year plan with different, perhaps more efficient, buses.
posted by The_Vegetables at 11:07 AM on June 7 [2 favorites]


I didn't know that several cities had tried deregulating taxis in the 1980s to bad effect. The congestion effects on scarce road space were enough to motivate cab and delivery regulation really early, so it isn't surprising.

And it's why private fully automated cars wouldn't solve the problem even if the fuel was carbon free (two ENORMOUS ifs): there already isn't space in my city for rideshares and cabs to operate without illegally blocking buses and the rest of traffic. There will be less if the maximally-space-using private cars become even more ubiquitous.
posted by clew at 11:13 AM on June 7 [4 favorites]


I don't know that the app is particularly high-tech as far as apps go, but a central app that hails a driver to my location is something that taxi companies never offered.

The article doesn't say this isn't an innovation, it says this is an innovation that doesn't create any business advantage for Uber:
Although Uber may have been an early adopter of smart-phone-app-based cab hailing, this service has been easily repli­cated by other companies, including traditional cab operators, and Uber has no significant advantage here. More importantly, there is no evidence that any of it creates meaningful efficiency gains, or that similar technologies led to major competitive upheavals in any other industry. Uber’s business model hasn’t worked anywhere, and it has failed disastrously in many markets that the company once claimed were strategically critical, including China, Russia, and Southeast Asia.
It's like selling cucumbers by the inch; it's an innovative business model but there's no reason that cucumbersbytheinch.com should be a billion dollar company just because nobody has thought to do it before. The underlying business of selling cucumbers isn't improved by a new method, plus there's no barrier for cucumbersbythecentimeter.com to enter the market if there was.

Moreover the article points out that dispatch-by-app is only possible by making investors subsidize rides because Uber doesn't have an answer to the capacity problem (other than drivers should get paid less and have terrible working conditions):
Cab companies cannot afford to provide all the expensive capacity demanded, creating conflict as wealthier people headed to restaurants and clubs fight over the limited supply of cabs with late-shift workers at hospitals and ware­houses. Uber has done nothing to reduce the high cost of peak service or find paying passengers anxious to travel at off hours. Uber’s core business proposition (“push a button, get a car!”) by definition requires far more capacity and much lower utilization rates than traditional operators.
Replacing the traditional taxi dispatcher with the Uber app is a customer service innovation, it makes it easier to reliably call a cab and we all agree that's a good thing. But it's only been able to do that because the extra capacity is subsidized by investors keeping it afloat and the drivers getting a worse deal. A better customer service model doesn't necessarily lead to a more affordable, profitable, or sustainable business when it comes to transit, sadly.
posted by peeedro at 11:22 AM on June 7 [13 favorites]


My admittedly hot take is that Uber is a huge bet on self-driving cars.

It for sure is in their minds, since the ideal labor cost for Uber is zero. But the big problem is that owning a massive fleet of self-driving cars will be a HUGE capital expenditure. Like, billions upon billions up front for a company that's already burning cash at an alarming rate. Uber currently doesn't own any of their fleet, so they'd be starting from nothing.

They definitely tell their angel investors the 10-year plan is self-driving cars, but it's an even worse one than what they have going right now - where people drive for less than minimum wage while taking on all the depreciating capital expenditures, maintenance, storage, and fuel costs themselves.

(Of course, this is to say nothing about the fact that the future of completely self-driving cars - that is, with no human there to step in in an emergency - is much, much further away than these companies let on. But they'll say whatever they need to to keep that sweet venture capital flowing.)
posted by joechip at 11:26 AM on June 7 [15 favorites]


I think the argument about Uber displacing public transit in planning makes a lot more sense when you start talking about smaller municipalities where public transit without Uber as a factor hovers on the edge of viability. Not everyone lives in a big city.
posted by Aleyn at 11:37 AM on June 7 [9 favorites]


Imagining a couple of wonks sitting at a nice table on the recently completed space station (2100?) chatting about how the ubershuttle to the captured asteroid the was convenient and would have supplies needed from amazon "Single Orbit Delivery" rehashing how these companies can stay in business having never made a profit.

Yeah the IPO only made 8 Billion and they are scumbags, but it's a verb, "uber over" even if it's a Lyft. They have vast clicks of cash flowing through uber-coffers and can use name recognition and the reputation of winning cutthroat local government clashes to stir the nether regions of money men everywhere.

Uber may crash and burn and few except for the last man in will be sorry, deride and disdain but keep the app on your phone just in case it's convenient.
posted by sammyo at 11:52 AM on June 7


Now there could be an effective and good for the environment moment, it's impractical to force people to use electric cars even though it's growing, but it could work to regulate SDC fleets to be electric and that could move the sustainable gauge a real tick mark.
posted by sammyo at 11:56 AM on June 7 [1 favorite]


Imagining a couple of wonks sitting at a nice table on the recently completed space station (2100?) chatting about how the ubershuttle to the captured asteroid the was convenient and would have supplies needed from amazon "Single Orbit Delivery" rehashing how these companies can stay in business having never made a profit.

Amazon has been in the black for decades now - they don't turn much of a profit, but that's because Amazon instead re-invests the money into the company (hence why Amazon is so massive today.) Uber, on the other hand, has been burning cash so hard that they have no comprehension of what black ink is.

The two companies are like night and day.
posted by NoxAeternum at 12:10 PM on June 7 [14 favorites]


The self-driving car thing is another part of the con! The story "we will be able to replace our drivers with robots" is a superficially plausible route to profitability for Uber that plays well in the media and helps convince people to invest. You have to be carefully following the progress of the technology to realize how far off self-driving still is, and how expensive it is going to be to deploy if it arrives.
posted by cyanistes at 12:14 PM on June 7 [7 favorites]


Something like Uber Pool is so close to, yet so far from Pattern 20: Mini-Buses. A rider-matching algorithm could be real innovation over traditional fixed routes or dispatch for last-mile public transit. Short, shared rides from doorstop to transit stop and back would concentrate riders at (fewer) transport hubs, allowing transit companies to offer faster, more frequent service.

Rideshare could be a very useful tool in a public transit approach built on integrated, hierarchical networks that focuses on fast, easy transfers, but the current obsession with doorstop-to-doorstop private cars is a recipe for congestion for the rich and immobility for the poor.
posted by lozierj at 12:30 PM on June 7 [7 favorites]


The self-driving car thing is another part of the con!

How do you incentivize an AI into buying mints and little bottles of water and cleaning up barf to keep its five-star rating?
posted by peeedro at 12:31 PM on June 7 [4 favorites]


...none of these claims were backed by any evidence of actual network economies, and no one could explain how these alleged platform-based economies could create quasi-monopoly power in an industry that had never even shown regional tendencies toward concentration.

This is not true. If a sufficiently high portion of trips are done through a shared model, such as Uberpool, then there would be natural network effects. I don't believe that they could get enough shared ride to make that happen, but I am skeptical of an article that long that doesn't address such a central issue.
posted by Mr.Know-it-some at 12:51 PM on June 7 [1 favorite]


What is rarely mentioned with the self-driving hype is that *one* of the scams uber pulled off is conning their drivers into 'donating' their privately owned vehicle to the common cause.... IF and when the self-driving hype comes about, who's going to be fronting that massive capital and maintenance outlay when there are no more suckers drivers?
On preveiw - what joechip said better.
posted by cfraenkel at 12:53 PM on June 7 [1 favorite]


> How do you incentivize an AI into buying mints and little bottles of water and cleaning up barf to keep its five-star rating?

Swing by a depot of stationary "Amazon packer"-style meat robotssanitation engineers for consumables refresh and/or hosedown?
posted by genpfault at 12:54 PM on June 7 [1 favorite]


Except that by doing so, they've distorted transit markets and pushed us away from public mass transit at a time where we need to be moving towards it. The reason why subsidized online livery is bad is the same reason that the subsidization of personal vehicles is bad.

Do we harbor illusions that, without Uber, the US would have invested more heavily in public transit? If anything, a future Uber collapse will leave us with a relatively smaller proportion of people actually owning cars...
posted by kaibutsu at 1:01 PM on June 7 [8 favorites]


> Swing by a depot of stationary "Amazon packer"-style meat robotssanitation engineers for consumables refresh and/or hosedown?

Yeah, I'd imagine that someone at Uber is already now trying to make WAG costing models about meat robot workers per car ratios and such. Then the goal would be meat-free maintenance.
posted by Burhanistan at 1:17 PM on June 7 [1 favorite]


Do we harbor illusions that, without Uber, the US would have invested more heavily in public transit? If anything, a future Uber collapse will leave us with a relatively smaller proportion of people actually owning cars...

I don't think anyone thinks that an Uberless US would have had an increased investment in public transit, but instead that the existence of Uber/Lyft/etc. has caused public transit budgets to drop more and faster than they otherwise would have as ridership suffers and local authorities write off ever larger numbers of potential riders as permanently unreachable. I have no idea if the numbers bear any of that out in fact, but I think that's the worry that people have.
posted by Copronymus at 3:01 PM on June 7 [6 favorites]


Interesting. I have felt wary about Uber and I’ve never created an account (nor with Lyft), though I’m lucky to live in an urban center with good public transport and robust taxi services. I’ve heard that Uber et al can be a big help for those without cars in car-centric places.

The Curb app for NYC taxis is great - works like Uber except feels more wholesome to use it.

P.S. this is my first MetaFilter comment ever - just joined today. Glad to be here!
posted by HephaestusB at 3:23 PM on June 7 [33 favorites]


I’ve heard that Uber et al can be a big help for those without cars in car-centric places.

Indeed; I'm a non-driver in a small city with decent transit, and I've been relying on Lyft for the last year or so when I need to go somewhere that the buses don't go, or only go once an hour, or at certain times of day, or on a winding route that takes three times what a car would take. I switched to Lyft as a last resort, incidentally, because the cab companies in my town have become next to useless (I waited eighty minutes for a ride once - eighty!). I'm not sure what I'll do when this investment fraud scheme comes crashing down, but this article made me realize I probably need to plan for it -- if this knowledge is public enough for me to have just read this piece, can the collapse be so far behind? -- so thanks to The Whelk for sharing it.

P.S. this is my first MetaFilter comment ever - just joined today. Glad to be here!

Welcome!
posted by eirias at 3:40 PM on June 7 [5 favorites]


Thank you! I just hope taxis and public transit can get stronger in more places. Not a likely prospect at the moment but one can hope.
posted by HephaestusB at 4:14 PM on June 7


But the big problem is that owning a massive fleet of self-driving cars will be a HUGE capital expenditure.

If* autonomous vehicles become a viable transportation method, we're likely to see vehicle subscription services become more common. Uber or other ridesharing companies could stick to their current model of making use of a borrowed fleet without paying the costs to build, insure, and maintain it. The problem with that possible future for Uber is that they will likely be in direct competition with conventional rental car companies that are already moving into the space, and the auto manufacturers themselves are experimenting with flexible borrowing schemes and using subscription services as a trial ownership for luxury products.

* That's a big if in my opinion. I think level 5 autonomous cars will remain five years away just like cold fusion will always be 20 years away.

Also, welcome aboard HephaestusB!
posted by peeedro at 4:23 PM on June 7 [2 favorites]


I love this writer:

“These beliefs about Uber’s corporate value were created entirely out of thin air. This is not a case of a company with a reasonably sound operating business that has managed to inflate stock market expectations a bit. This is a case of a massive valuation that has no relationship to any economic fundamentals.”
posted by armoir from antproof case at 4:33 PM on June 7 [2 favorites]


I keep thinking about this piece since I read it over the weekend because it's so comprehensive in its repudiation.

Something that was lightly touched upon but not emphasized nearly enough is just how arrogant Uber is. They roll out their operations to new cities, often without any kind of regulatory oversight or clearance. And because many cities have mediocre taxi service and even worse public transit — thanks, "small government" fans — Uber rapidly becomes an accepted and even essential part of life. Any attempts to regulate it are met with scorn, and cities usually capitulate.

We went through pretty much this exact storyline in Calgary few years ago with one minor difference: the city didn't back down. They proposed bylaws that would, in effect, consider ride sharing drivers broadly the same as taxi drivers, with similar background check requirements — from the police, mind you, not some private background check firm — similar vehicle inspections, and similar insurance requirements.

Uber, predictably, mobilized their PR campaign and declared these regulations to be "unworkable". They fought hard, and the city ultimately bent: they allowed ride sharing companies to have insurance as a company instead of on a per-driver basis. As far as I know, that was it. That was the entirety of the city's compromise. And Uber started operating here, even with drivers that have to register their cars as commercial vehicles, have to get police background checks, and have to comply with rules very similar to that of other commercial for-hire vehicles.

I still don't like Uber. I think they're a nasty company making a barely-innovative product, buoyed by decades of neglecting public transportation. But there is hope for fighting back.
posted by nickheer at 4:47 PM on June 7 [9 favorites]


But the big problem is that owning a massive fleet of self-driving cars will be a HUGE capital expenditure.

I just assume the new scam will be “buy a new autonomous car and then have it work for you at Uber while you don’t need it”. It will move the scam higher up the class structure. Now they can target not just gig workers, but those who have enough capital to buy a new car and think this will pay for itself (it won’t - given maintenance and depreciation).

It’ll be another property investor bubble.
posted by inflatablekiwi at 4:58 PM on June 7 [2 favorites]


Uber or other ridesharing companies could stick to their current model of making use of a borrowed fleet without paying the costs to build, insure, and maintain it. The problem with that possible future for Uber is that they will likely be in direct competition with conventional rental car companies that are already moving into the space, and the auto manufacturers themselves are experimenting with flexible borrowing schemes and using subscription services as a trial ownership for luxury products.

This is such a bad idea for Uber I am thoroughly convinced they will spend billions of dollars trying it out.

Unless I'm missing something it seems that if they don't own the thing they're renting out, there's no human driver to connect riders with, and there's nothing stopping places like Hertz or Ford from renting driverless cars out themselves... Uber literally adds nothing. They'd be like a movie-watching app that charges ten dollars a month to direct you straight to Netflix.
posted by joechip at 5:13 PM on June 7 [5 favorites]


I feel like if cutting labor costs through self-driving cars were viable then pizza companies would be in on it. But they’re not. Instead they try pushing customers towards carryout.
posted by cricketcello at 5:26 PM on June 7


I have just a couple of quibbles with this article: 1) like Mr. Know-it-some, I wish it had directly addressed the potential/possibilities of UberPOOL, though I expect that the lack of hard data regarding this program might have made it hard to say anything definitive, and 2) "Unlike previous Silicon Valley start-ups, Uber made PR spend­ing a top priority from day one." This might be arguably true for most of the current, surviving SV giants but, like, did they miss the first dot-com boom?

But, overall I think this article really hits the nail on the head. For me, the key bit is right here:
It is unclear whether any single firm would eventually dominate this (hypothetical) industry, but there is no reason to believe Uber would be the most likely company to do so.
Every time I express skepticism about Uber's business model, someone will bring up self-driving cars. But I'm always rather disatisifed with that answer because in order for that explanation to work you not only have to believe that self-driving cars will exist in the near future, you also have to believe that somehow Uber has some kind of exclusive (or, at least, prioritized) claim to them. Either they're going to invent (and obtain regulatory approval for) them themselves -- somehow beating Google's Waymo, all the car manufacturers, plus whoever else is working on self-driving cars to market. Or they're going to negotiate some kind of exclusive license or sweetheart deal from whomever does end up inventing them. It just doesn't really add up for me.

Meanwhile, as people are wising up to the fact that the Uber app, while innovative for its time, is no more of an industry-destroying disruption than the Domino's Pizza Tracker app, I would like to point out that they actually did have the opportunity for doing something truly new. For all their reputation of being staffed up with hardcore libertarian free-marketers, Uber really shied away from... well, creating a market. I think that if they truly had the conviction that free markets were so great, they wouldn't have gotten into the business of setting the prices for trips themselves (and thus being really nothing more than just a taxi company with an app and a sketchy employment model). They would have made their app truly a platform where drivers offer up their rates and/or riders bid on drivers/trips and let the market efficiently (lol) determine the equilibrium prices. It probably would have been super messy and probably hard to understand at first, but it would have been a genuinely novel thing.
posted by mhum at 5:45 PM on June 7 [4 favorites]


I don't think Uber would particularly mind owning cars. After all, much of their red ink has been spilled subsidizing cars for many of their drivers. The Uber/Amazon comparison would be apt if Uber were run by people of similar intelligence/business sense/whatever the hell it is they are lacking.

It's not an inherently unprofitable business, it's just that they run it in a way that makes it impossible to profit because of an obsession with the wrong metrics.
posted by wierdo at 5:46 PM on June 7


Or they're going to negotiate some kind of exclusive license or sweetheart deal from whomever does end up inventing them. It just doesn't really add up for me.

They've joined an industry group that has been arguing that only companies who maintain fleets should be allowed to own autonomous vehicles.
posted by NoxAeternum at 6:48 PM on June 7


Whenever people suggest Uber is going to turn it all around and make a profit once they get their autonomous cars up and running, it makes me giggle. Who would apply that logic to any other business? No one thinks deep fryers with self-flipping baskets are going to turn restaurant ownership into a golden ticket. No one thinks marginal improvements to automated checkout kiosks are going to bring Sears roaring back and put Amazon out of business.
posted by Ptrin at 7:03 PM on June 7 [10 favorites]


Uber’s chief operating officer and chief marketing officer are stepping down (CNBC)
In an email to employees, CEO Dara Khosrowshahi said that Uber’s progress now gives him the time to be more directly involved in the company’s day-to-day operations. Khosrowshahi wrote in the email that he decided the heads of Uber’s core businesses should report directly to him.

“This will allow me to be more hands on and help our leaders problem-solve in real time, while also ensuring that we make our platform vision a reality,” he said.

Because of this organizational change, Khosrowshahi said Harford agreed that the chief operating officer role “no longer makes sense” and decided to leave the company.

Khosrowshahi said he also decided to combine Uber’s marketing, communications and policy teams in order to maintain a “unified narrative to consumers, partners, the press, and policymakers.” That team will be lead by Jill Hazelbaker, who served as senior vice president of communications and public policy before this shuffle. As a result, Khosrowshahi said Messina agreed with him that “it makes sense for her to move on.”
posted by Johnny Wallflower at 9:31 PM on June 7


Ah yes, merging policy with pr and marketing. That should be fine.
posted by ryanrs at 11:32 PM on June 7 [1 favorite]


UberPool is basically unviable as a solution to transit. Let's extrapolate to a future where every single car on the road is an UberPool car. The maximum throughput of the roads hasn't changed at all - traffic jams caused by the road being full will still happen, although traffic jams caused by poor driving will probably be less of a factor. Uber has no incentive to fix this situation, because its pricing model takes the time a trip takes into account. If there's traffic jams, Uber makes more money.

To move more people more efficiently, you need a vehicle that moves more people with more efficient use of space. Conveniently, this is basically any kind of vehicle! Buses are pretty efficient; trams are more efficient but usually need the road cleared; trains are even more efficient in terms of capacity but they need dedicated roads. For most trips, a good tram or train can efficiently get everyone who needs it into a central hub, and as a bonus, it takes cars off the road as people decide that a 20 minute trip into the city where they can read beats a 40 minute drive where they still have to find a park. Bicycles, electric scooters and electric bikes are also very space efficient, and don't need much in the way of dedicated infrastructure - if they have their own little piece of the road, that's kept away from heavier vehicles, they're quite efficient people movers. Bicycles aren't suitable for everyone, they can be quite exhausting to use and inaccessible to disabled people, but electric scooters and electric bikes are transformative.

tl;dr: invest in Lime
posted by Merus at 1:24 AM on June 8 [2 favorites]


I met with Travis Kalanick many years ago for coffee via an introduction from a venture capitalist who knew that I was in Tokyo. Kalanick was in Japan scouting the launch of Uber in Japan. I explained to Travis that Japan was different than many other markets- that the government had invested heavily in mass transit, and taxi availability was not a significant problem in major metro areas (except maybe during heavy rains, etc.) He thanked me for the advice but said that they would launch nonetheless. Kalanick went on to launch Uber in Japan and it failed to get any significant traction as I predicted.

Cut to 2019, and while Uber does have a service in Japan, it's only the Uber Black option at a price higher than a taxi, which is already quite high. Sony and Didi also are launching/have launched taxi apps in Japan, and a group of fleet taxi companies have also launched apps.

Uber has forced the Japan market to adopt apps for hailing taxis to some adoption, but legislation bars individuals from car-sharing or using non-commercial vehicles for 'uber-type' services.

When/if you visit Japan, I recommend the public transportation which is clean, safe, almost always on-time and basically ubiquitous.
posted by gen at 1:36 AM on June 8 [12 favorites]


But the big problem is that owning a massive fleet of self-driving cars will be a HUGE capital expenditure.

The plan may be for you (the private or governmental owner of one or more self-driving cars) to let Uber control your cars when you are not using them. "Let us help you make money off your otherwise idle cars."
posted by pracowity at 5:23 AM on June 8 [1 favorite]


Whenever people suggest Uber is going to turn it all around and make a profit once they get their autonomous cars up and running, it makes me giggle. Who would apply that logic to any other business?

have you met the oil business? build this storage terminal / pipeline and pray the government will act to subsidise your costs, and increase demand.

or pay them to. Uber's PR has got nothing on the oil industry. they're in the government.
posted by eustatic at 7:18 AM on June 8 [1 favorite]


Witness
posted by eustatic at 8:10 AM on June 8


The Dollop podcast had a great episode on Uber and Kalanick. Highly recommend to see what a jerk he is and how horrifying Uber's practices are to their drivers and his reaction to sexual assaults happening to some riders also made me believe they should burn Uber down.

Also he referred to his apartment or dorm room as his Jam Pad which had its own Twitter account extolling its virtues as a great idea space and there's no forgiving that.
posted by kanata at 8:16 AM on June 8


existence of Uber/Lyft/etc. has caused public transit budgets to drop more and faster than they otherwise would have as ridership suffers and local authorities write off ever larger numbers of potential riders as permanently unreachable. I have no idea if the numbers bear any of that out in fact, but I think that's the worry that people have.

I like that there are concerns that Uber burns through too much money and is wholly unprofitable with no model towards profitability and the implication that they are going to stick around long enough to materially effect the mass transit industry.
posted by The_Vegetables at 11:58 PM on June 8


Although Uber may have been an early adopter of smart-phone-app-based cab hailing, this service has been easily repli­cated by other companies, including traditional cab operators, and Uber has no significant advantage here.

I've tried a bunch of apps purportedly used by local cabbies. None of them works as well; mainly because of fragmentation. I don't think it has been easily replicated.
posted by bluefly at 4:58 AM on June 9 [1 favorite]


fantastic and impassioned piece. one thing the author did not address, properly in my view because it relies on not-yet-available technology and regulatory oversight, is the actual longterm goal of Uber to achieve profitability: the elimination of driver employment by the establishment of autonomous vehicle fleets.
posted by mwhybark at 7:07 AM on June 9


Uber is rolling out chopper service in NYC. What could go wrong? And, I heard someone on NPR the other day say Uber was looking at ways to ease helicopter restrictions in NYC to have more routes, but I couldn't find a cite.
posted by Burhanistan at 9:03 AM on June 11


Some of those investors may have been concerned that the window in which tech IPOs were seen as a hot commodity was closing; others may have been concerned that Uber might never be able to go public with actual evidence of profitable growth. Khosrowshahi committed to an IPO in 2019 and will get a $100 million bonus if he achieves a valuation of $120 billion.

Sure, Uber didn't leave any money on the table, but its IPO was nothing to celebrate and it could haunt the company and its execs for years to come - "The app-based taxi service went public Thursday night at $45 a share, which was near the low end of its expected range. The pricing gave the company an initial valuation of $75.5 billion — well below the $120 billion figure investment bankers were bandying about last fall.
That was bad enough. But things got worse when Uber's stock hit the New York Stock Exchange on Friday. Its shares opened below their IPO price and stayed down all down day. They ended their first session of trading off $3.43, or nearly 8%, to close at $41.57."
The Banks That Ran Uber’s IPO Feared This Would Happen - "Now, the extraordinary part: CNBC reports the banks were worried Uber’s stock would do exactly what it did after the offering (puke) and they weren’t sure the flexibility to buy 27 million shares would be enough to keep the price up. So actually they sold even more than 207 million shares of Uber in the initial offering, exceeding the sum of the 180 million shares they had bought from the company and the 27 million shares they had the option to buy at a fixed price. The excess over 207 million that the banks sold created what’s called a naked short position: Not only did the banks stand to make money on this position if Uber’s stock fell, they were going to lose money if the stock went up."
There Was No Way To Win With The Uber IPO, Matt Levine - "Morgan Stanley’s error was marketing and pricing the IPO for more than Uber is worth, and that is a serious and embarrassing error that will no doubt leave many of its investor clients angry, but honestly what else could they have done? If Morgan Stanley had had perfect foresight and told Uber “we are going to market this deal at a price range of $33 to $37, price it at $35, and see a modest pop as it trades up to $37 in the next few days,” they would have been laughed out of the room, and someone more optimistic would have led the IPO. (And Morgan Stanley would not have collected $40 million in fees. 3 ) A $35 IPO would give Uber a (post-money) valuation of $59 billion, below its value in 2015, and less than half of what Uber’s banks actually pitched last year. (It also would have raised $1.8 billion less for Uber, which seems important given that Uber keeps losing money.) It would have been basically impossible for Morgan Stanley to convince Uber to launch the most anticipated U.S. technology IPO in years at such a defeatist valuation, and anyway it might have been self-fulfilling: If you launch the Uber IPO on the premise “the unicorn bubble is over, sorry everyone,” then who will want to buy?"
posted by the man of twists and turns at 12:06 PM on June 12 [1 favorite]


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