Umm, why not?

In a sane society, a company could not habitually lose money, punish its workers and keep functioning. Uber can.

Money goes from rich folk into the company. The people who buy the stuff get cheap stuff. For the products are underpriced by the amount of the losses in the production process.

This is a transfer from capitalists to consumers. Why wouldn’t we want to allow this?

27 thoughts on “Umm, why not?”

  1. I don’t know if the Guardian ‘punishes’ its workers (it has been known to sack them on Christmas Eve) but its ironic that they should have printed that sentence.

  2. I must admit to confusion. If Uber etc are continually losing money, they will surely go bankrupt sooner or later and their fiendish exploitation of their workers will cease anyway.

  3. There might be a sort-of dumping argument, that Uber seek to destroy all competitors by pricing them out of the market; then establish a monopoly and jack up prices, to the detriment of the consumer. But frankly it’s hard to see that ever happening in an industry where barriers to entry are so low.

  4. >it’s hard to see that ever happening in an industry where barriers to entry are so low.
    The objective is to be there on the ground floor when self-driving cars show up and remove the labour costs. It’s hypothesised that self-driving cars will need so much data that you’ll need to already have a fleet of self-driving cars (to collect it) in order to run a fleet of self-driving cars.

    The industry will flip from high-overheads, low barrier-to-entry to the converse, and Uber intends to be there, already entered, when that happens.

    https://www.wired.com/story/bet-uber-bet-self-driving/

  5. BM- yeah, that’s the bet, but it’s also mission creep. The founders pitch to the early investors was they could make money blowing trad taxis out of the water. Turns out they can’t but at IPO when its time for those investors to claw back the investment hey presto self driving is how we’re going to coin it in.

  6. Is it possible that they can be profitable without self-driving cars? Is there a reason they can’t increase their costs sufficiently? Or is there a realistic point where their traffic would be high enough to be profitable under current conditions?

    Not unusual for any new company or industry to struggle to reach profitability. Friend of mine launched a business years ago, for nearly a decade he was one step ahead of the creditors, had cars repossessed, had to sell a house. But they did turn the corner & now he has hot & cold running Ferraris.

  7. Imagine agreeing to get in a “self-driving” car tho. Literally trusting your life and limbs to the finest, cheapest outsourced Pajeet coders from the Mumbai Institute of Plagiarism.

    Also I’m pretty sure I’d be banned anyway for breaching community standards.

    But think about the gayification of our automotive dreams here, it follows the same sad, limp arc of recent Western history:

    1950’s – in the future we’ll have atom-powered flying cars with built-in whisky dispensers and optional seatbelts!

    2020’s – in the future we’ll be trapped inside tiny electric golf carts piloted by Clippy from Microsoft Office 97!

    History tells us that Emperor Nero liked to dress as a wild animal and then attack people’s private parts. I reckon he’d be right at home in Silicon Valley.

  8. HTF can they write that Uber punishes its employees? Before the pandemic & Lockdowns in the U.S. we had rock bottom unemployment. Nobody had to drive for Uber to keep the wolf from the door.

  9. In a sane society, a company could not habitually lose money, punish its workers and keep functioning.

    I’ve worked for companies that do all those things,obviously not for very long. I guess that the author has never done “real” work or worked in a shop.

  10. Esteban: “Is it possible that they can be profitable without self-driving cars?”

    possibly- but what’s the pitch? At some time in the next ten years we’ll be profitiable with human drivers- not next year,obs, probably not the year after. In any case sometime hence comes self driving which means our took-15-plus-years to be profitable human taxis will become obsolete. Then dear investor we’ll switch to our self driving tech, which at some point will be muchly profitable.

    i am optimistic that self driving will be a thing, but that’s different from picking the winner.

  11. Why can’t they be profitable with human drivers? The drivers (theoretically at least independent) bear all the taxi costs; Uber just takes a commission in return for providing a platform (which must be mostly a sunk cost) and a few basic services.

    The reason it isn’t profitable is presumably advertising and other costs of expanding (into new markets or growing market share).

    Presumably at some point it will have done all of that it needs to, so can sit back and rake in the profits? Or have they got a bloated bureaucracy to fund? (Some of their work posturing suggests they have)

  12. ‘California, an increasingly progressive state’

    Increasingly? I think they hit peak progressive some time ago.

    ‘They will continue to dwell in precarity, unable to access unemployment insurance, paid family leave or healthcare during a pandemic.’

    Whatta moron. They could choose to get a job somewhere else. That they don’t says they prefer Uber to whatever else is available.

    ‘The Uber business model is Trumpian.’

    OMFG.

    ‘Uber and its ilk treat workers as expendable assets.’

    Keep writing shit like this, Barkan, and you will find that YOU are expendable. The supply of gawd awful writers for the Guardian is unlimited.

  13. Self-driving cars are just silly sci-fi, like I’m going to get a fembot as hot and realistic as Joanna Cassidy in Blade Runner.

    Uber’s one advantage is connecting customers to cabs. The more cabs you have, the less time a customer has to wait and the less time cabbies spend driving to a pick up. But I’m not sure how big an advantage is, and like most dystopian fantasies about companies exploiting monopolies it doesn’t work for the reason given by Andrew M. If Uber double the price, cab companies that are cheaper will start up.

    Can’t these miserable fuckers just enjoy a good future thing? I love using Uber. I don’t pay for ridiculous black cabs, I book with an app while I’m still on a train, I get receipts. And I spoke to a driver in Manchester who liked Uber better because minicab firms give work to their friends and family first, where Uber doesn’t. Also, ask black people in New York about yellow cabs driving past them, or minicabs driven by Muslims that refuse to take guide dogs. Uber kick those drivers out.

  14. Using self driving cars would mean they need to spend an awful lot of money buying self driving cars. At present they don’t buy the vehicles.

    You’d think Uber could figure someway to let the drivers simply subscribe to the app and charge them for the subscription. Then let the drivers keep the fare. Could that be a profitable model? It might also get some political heat off their back. It’s interesting that a service that is so popular is so hated by the politicians that they’re willing to risk alienating their voters trying to get rid of Uber.

  15. HTF do they think paid leave works? You get paid less today to build up a reserve to get paid tomorrow. You don’t need an employer to do that.

  16. @Steve
    AImagine agreeing to get in a “self-driving” car tho. Literally trusting your life and limbs to the finest, cheapest outsourced Pajeet coders from the Mumbai Institute of Plagiarism. A

    Imagine getting in a cab driven by a reformed goat herder from southwest Asia. Trusting your life and limbs to someone who learned to drive watching “Fast and Furious”.

    Oh wait…

  17. @TD “You’d think Uber could figure someway to let the drivers simply subscribe to the app and charge them for the subscription. Then let the drivers keep the fare. Could that be a profitable model?”

    Now the concept is out there there is no great difficulty in anyone making a similar app. So the price of a sub will be driven down. There is a benefit from the network effect, being the app that every cab uses in any one area, and a brand recognition benefit of being the app that everyone has in any city. Someone may make money when it’s a commodity, but probably not Uber, too much sunk cost in building the brand.

  18. MG – Skin in the game, int’it.

    I trust my crazy Cambodian taxi driver mate because he wants to get home to his wife and little fella. Drives like Pol Pot himself is after him, mind.

  19. For various work reasons I probably have a good deal more professional insight into this sector than most people. Though I don’t work for Uber or a similar business. So a few points that may be of interest:

    – Yes, it can be a profitable business. Very profitable actually. There are peer companies globally that are already running reasonably profitably on an overall basis.

    – Within Uber itself (and peers) there are individual markets that are already generating very good profit, but that is being used to subsidise growth in other regions. It’s possible the push for growth goes too far and build-out occurs in markets that can never be brought to profit, but it would not be hard to scale the business to an optimum level once that is found.

    – It’s not actually a commodity. The software capability may be (nowadays), but the value is in the network, because it’s the network that produces the unit economics to make it work. That’s not to say it can’t be competed with – it certainly is – but incremental competition is hard because the network requires huge investment to replicate.

    – A subscription model wouldn’t work the same way. The cost needs to be variable to allow low costs for the more marginal suppliers. In a way however, it is a subscription but on a per-mile (ish) basis, really quite fair in many ways.

    – Politicians are often scum who kowtow to vested interests. What’s new? Uber has done the world a huge favour busting through corrupt taxi and minicab legislation. Doesn’t mean we should let them become a monopoly themselves of course.

    – Uber has been a huge help to the poor. Providing work where it didn’t exist before (so many people would never take cabs under the old model who now will due to the far better and more economic service). Removing barriers to affordable and flexible taxi services for the poor – black cabs refusing to go to the estates south of the river being a classic example.

    – autonomous driving technology is much more progressed than most think. That’s not to say it will work in all situations, and the regulatory barriers may be huge. In a way, it needs to be substantially *better* than humans to succeed. But there are already fleets of autonomous cars driving in the wild quite happily (even unmanned in some cases now).

    – yes, Uber is now thinking about a driverless future. The other big opportunity is dominating last-mile delivery (takeaways are just the start).

  20. autonomous driving technology is much more progressed than most think. That’s not to say it will work in all situations, and the regulatory barriers may be huge. In a way, it needs to be substantially *better* than humans to succeed.

    Self-driving cars will conquer city centres last. And they are exactly the places where cabs operate the most.

    Features of downtowns include: lots of erratic pedestrians, tight roads with poor signage, erratic behaviour from other cars while parking etc, reflections and light issues etc.

    It’s not that self-driving cars will have accidents, but they will be basically static with fear. They need to be able to recognise whether a person standing by the side of the road intends to step out or not. Otherwise they will halt every time they sense a person near a street edge. The reflections will cause massive issues too.

    Imagine two self-drive cars come face to face down a road where they can’t pass without one pulling over to let the other one through, or one needing to back out. There’s a lot of driveways like that in particular. They could sit there permanently.

    Training them to drive from city to city along roads with cars going predictably in one direction and without pedestrians and cyclists is a doddle in comparison.

  21. Imagine two self-drive cars come face to face down a road where they can’t pass without one pulling over to let the other one through, or one needing to back out. There’s a lot of driveways like that in particular. They could sit there permanently.

    I would be very surprised if there isn’t a car-to-car mesh network, with protocols to handle “after you” situations.

  22. Oblong- yeah ok profit potential maybe and ok amazon growth b4 profit. but amazon was going from flogging books in NA to selling everything everywhere. UBER is actively pitching creatively destructing it’s creative destruction premise before it’s made any money out of it. May yet work out but it’s still Alanis Morisette territory.

    I expect there to be airline levels of regulation on self driving cars. RTA victims’ families will need a human to emote over and politicians won’t want it to be them. However i do hope they allow different systems’ philosophies to be developed and sold and compete against each other within a regulatory framework.

  23. Self-driving cars will conquer city centres last. And they are exactly the places where cabs operate the most.

    Features of downtowns include: lots of erratic pedestrians, tight roads with poor signage, erratic behaviour from other cars while parking etc, reflections and light issues etc.

    It’s not that self-driving cars will have accidents, but they will be basically static with fear. They need to be able to recognise whether a person standing by the side of the road intends to step out or not. Otherwise they will halt every time they sense a person near a street edge. The reflections will cause massive issues too.

    Imagine two self-drive cars come face to face down a road where they can’t pass without one pulling over to let the other one through, or one needing to back out. There’s a lot of driveways like that in particular. They could sit there permanently.

    There’s a great deal of evidence from pilot training that humans do not have the advantages we think we do. Which is why a great deal of pilot training is to teach the pupil to work within the capabilities.
    For a start, your high definition field of view is something like looking through a 2 inch circle held at arm’s length. Outside of that the peripheral vision degrades rapidly. What you do is scan & pilots are taught to scan methodically rather than what catches the attention. Secondly the visual system is only really sensitive to moving objects. Which means it can have problems interpreting something where the relative bearing does not change. Think of two cars approaching each other where the angles & the velocities cancel out, so each seems motionless to the other. Lot of accidents result from that. And reaction times. Humans don’t process information very quickly. Nor do they do much parallel processing. It’s much more serial with the attention constantly jumping from one thing to another.
    Perfectly possible to build a system sees everything in a 360 deg field of view with equal definition. Will process the information a thousand times faster. But the real clincher is this:
    I would be very surprised if there isn’t a car-to-car mesh network, with protocols to handle “after you” situations.
    No-one is seriously going to build a self driving car environment where all the cars are autonomous. It wouldn’t make any sense. Why go to the enormous expense of each vehicle having that amount of processing capability? You distribute the processing capability across the network with central control hubs so all cars are aware of each other & the system functions as a whole. Meaning traffic densities can be much higher whilst delivering shorter journey times.

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