Home / General / Shorter Uber: “Gentlemen, To Evil!”

Shorter Uber: “Gentlemen, To Evil!”

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The more one knows about Uber, the more shocking its corporate culture and behavior becomes. It needs more drivers with decent cars. So what is its solution? Offer drivers sub-prime loans for cars at high interest rates!

To solve that problem, the company has raised $1 billion to start Xchange Leasing, a sub-prime lender with the sole purpose of getting poor people into new cars so they can drive for the ride-hailing service.

If you’ve got a license and are willing to drive, Uber will hook you up with a new car, no matter how bad your credit. To make sure you make your payments, though, Uber will automatically deduct them weekly from what you earn as a driver. If you don’t drive enough, or you fail to make your lease payment, Xchange has folks to take the car back.

As for the terms, well, here’s what Mark Williams, a lecturer at Boston University’s business school told Bloomberg News: “The terms, the way they’re proposed, are predatory and are very much driven toward profiting off drivers.”

Uber, which is now valued at $62.5 billion, can only make money if tens of thousands of people sign up as drivers. That’s because 50 percent of Uber drivers quit after just six months.

Xchange wants to address that by striking deals with automakers and Wall Street backers to lease 100,000 cars to new Uber drivers. Uber says they are providing a pathway for poor people to buy a new car.

Unfortunately, Xchange Leasing sounds more like a payday-loan racket built into a company store. The lease increases the company’s control over the driver, who Uber still insists is nothing more than an “independent” contractor.

How is someone independent when Uber controls access to customers, sets the billing rates, demands a minimum number of hours and owns the car and the predatory lease on it?

I can think of another way Uber could find good cars. The company could buy the cars itself. But no, of course not, because Uber’s entire model is built upon outsourcing all risk and obligation onto the drivers while maintaining control over anything that makes profit.

Meanwhile, David Plouffe’s post-Obama career is as yucky as anyone could imagine. See, Uber has just received a $3.5 billion investment from Saudi Arabia? I know, what could possibly go wrong. What would a company built entirely on forcing workers to take all the risks need all that money for? To create a global monopoly. What did Plouffe have to do with this? He the one who put it all together. Plouffe is basically the public face of Uber now. Of course, I wonder if there is anyone in Saudi Arabia who isn’t allowed to be an Uber driver and who must rely on ride services because they can’t drive? Oh yeah, women.

The deal between the only country in the world that bans female drivers and Silicon Valley’s ride-sharing company Uber Technologies Inc. may be as unusual as it is convenient. What’s sure is that it’s caused outrage among many Saudi women.

They are angry that Uber’s new $US 3.5 billion investment from Saudi Arabia’s sovereign wealth fund not only means the government directly profits from the ban, but also it effectively – in their view – endorses the country’s no-women-behind-the-wheel policy. The investment is part of the ultra-conservative Gulf country’s steps toward making money from things other than oil.

But it raised hackles on social media, where the hashtag hashtag سعوديات_يعلن_مقاطعه_اوبر# (Saudi women announce Uber boycott) gained traction, and women posted pictures showing them deleting Uber apps from their phones.

Uber has operated in Riyadh? since 2014, and along with another service, Careem, is popular with Saudi women, who have sought the right to drive for more than two decades. They are forced to pay chauffeurs, most of them foreigners, or rely on male members of the family to drive them.

“They’re investing in our pain, in our suffering,” Hatoon al-Fassi, a Saudi women’s historian who teaches at Qatar University, said in an interview from Doha. “This institutionalizes women’s inferiority and dependency, and it turns women into an object of investment.”

Sounds like a chance to rake in the cash!

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  • howard

    i’m really torn here: on the one hand, i thank uber for destroying the yellow cab monopoly, which was neither driver nor passenger friendly (it was medallion-owner friendly).

    on the other hand, it’s clear that the people who run uber are scummy and i don’t especially want them to profit either.

    but from what i’ve read, the actual drivers do marginally better for uber than for yellow, so i continue with them, but this is the difficulty in trying to be an honorable consumer.

    • Incontinentia Buttocks

      Is Lyft any less evil as a company than Uber? I don’t use either (nor do I use cabs). But it’s hardly a choice between Uber or traditional taxis. There are other options.

      • howard

        my understanding is that they all work on the same basic premise – that people who are clearly employees aren’t – so i don’t see any upside to lyft on the axis of evil.

        additional p.s.: i did try lyft a few times a couple of years ago, but they weren’t any quicker in availability than yellow cabs were, presumably because uber has the name recognition of first-mover advantage and has more drivers.

        • DrS

          Almost all the cars I see here that have an Uber card in the window also have a Lyft. Many of the drivers drive for both as a way of increasing their chances of getting a passenger.

      • ExpatJK

        Um, what would that be in areas where there isn’t much public transport? Or where public transport can be ridiculously expensive (e.g. minimum of around $17 to get to Sydney airport one way from nearby stations, thanks NSW!)

        I will say that notwithstanding the many problems of Uber, taxis in Sydney are really f*cking terrible and Uber is a welcome option next to them. So I’m with howard on this.

      • pegabel

        I use Lyft, rather than Uber, when possible, because Lyft allows tipping in the app. With Uber, I have to have the right cash. At least by tipping, I can help assure the driver is decently paid. (by me, anyway)

      • Crusty

        I’ve never used uber and have used lyft a couple of times. Lyft’s app also offers the option of leaving a tip. Uber’s does not. I get the sense that Lyft tries to treat their drivers a little better and be a little more kind and humane to them than Uber does, but that may also just be their pr or pr strategy.

        • Philip

          Lyft has many of the same issues as Uber, but I think you’re impression is correct. They at least make a bit of an effort to treat their drivers like human beings.

      • djw

        A couple of years ago an uber driver asked me why I used uber rather than lyft (he was a driver for both, and has both apps on at the same time, taking rides with either as it suits him). He made pretty clear he preferred lyft–while the pay was roughly similar, he felt lyft generally treated the drivers better and more respectfully and straightforwardly in ways I don’t specifically recall.

      • Philip

        Lyft isn’t good. But they’re not out-and-out evil the way Uber is.

    • polyorchnid octopunch

      That is certainly not the case in my city.

    • lunaticllama

      Uber or Lyft cars are an ever present danger to all pedestrians and other drivers alike in most states, because they are uninsured. If you get hit by a cab, there’s a statutory minimum policy – not so with Uber cars, where all insurers will likely be able to validly disclaim coverage under an exclusion. I am not glad that “the yellow cab monopoly” has been replaced by a large number of uninsured vehicles on the road.

      • howard

        i am not going to claim that i have knowledge of each locale, but it is certainly not true in my community (or to the best of my knowledge, in general) that uber drivers are uninsured.

        here, for example, is the most current writeup i could find on the subject.

        p.s. i strongly believe that drivers for uber and lyft and any other “ride-sharing” service should be subject to the exact same regulatory requirements as cab drivers are.

      • sum goy

        from the time a Uber driver accepts your ping, all the way through the time she drives over too get you, then drives you to your destination, during this whole time that Uber car is covered by a $1 million liability insurance overage provided by James River Insurance Company.

        • I for one am shocked, SHOCKED, that a person who has only ever before commented to defend Uber shows up to comment to defend Uber. I’m sure it’s just someone who naturally came upon the blog or maybe a devoted reader who only comments on this issue…..

          • sum goy

            read LGM every day, Erik. particularly like your Graveyard visit posts. sorry you are offended one of your regular readers also feeds ad clothes his 2 kids by driving an Uber car. I guess some forms of working class labor are toooo reprehensible for Erik Loomis. note taken.

            • I guess some forms of working class labor are toooo reprehensible

              I thought you weren’t a worker. If you aren’t an employee, and are proud of that fact and defending the company as an independent contractor, are you a worker?

              • sum goy

                when I get in my car and drive I work. yes, work, just like Rihanna sings about on the stereo in my car. work work work

                would it be great if there was a union ? yes. when there is a union I will sign up and pray I receeive better beenfits/protections fromm groundless termination than the Faculty Union I paid dues to as a grad teaching assistant and Lecturer. there is always hope.

                but thanks for labeling me as a paid troll, always the mark of a substantive response.

                • If you want a union and say it would be great if there was a union, then why are you defending the company’s practices?

                • sum goy

                  also, if you could Erik, please point out the post where I claimed I wasn’t a worker ? feel free to widen your search to any and every comment I have ever written on LGM

                • Rob in CT

                  also, if you could Erik, please point out the post where I claimed I wasn’t a worker ?

                  Umm…

                  http://lawyersgunsmon.wpengine.com/2016/06/shorter-uber-gentlemen-to-evil/comment-page-1#comment-2025427

                  I’m sympathetic to your posts in this thread, but…

                • sum goy

                  nice revision to the original question, Erik. careful editing always makes for a better writer, and your revision does some heavy ideological lifting the original version (“Are you a worker?”) avoided.

                  I am not an employee of Uber. I am a driver. I am compensated for my labor, thus I am a worker.

              • Crusty

                How’s this Erik- you can pay sum goy’s bills while he organizes uber drivers or finds a union job elsewhere?

                • Typically this comment makes no sense.

                  No one is claiming that workers shouldn’t make a living however they can. It’s the defense of corporate practices that I am questioning.

                  I mean Christ, you could at least pretend to read what I write.

                • Crusty

                  Have you considered the possibility that you’re way shittier a writer than you think you are?

                • Register your complaints with The New Press and Cambridge University Press.

          • West of the Cascades

            I hate Uber and never have used them (nor plan to), but at least here in Oregon it appears it’s true that Uber has a $1 million liability policy that is in effect while there is a passenger in the car. http://www.oregonlive.com/commuting/index.ssf/2015/10/cyclist_sues_after_uber_privat.html

            But, as this article makes clear, that policy doesn’t always protect people injured by Uber drivers.

            • Dilan Esper

              Bear in mind as well that it isn’t as though regulated taxis are well insured. In many jurisdictions, medallion owners form two cab corporations and other such devices to sharply limit liability.

              The fact is, something like uber had to happen, because local taxi regulations were completely captured. But now that it has happened, we need to use this opportunity to do real consumer-friendly (NOT medallion-friendly, supply limiting) taxi and livery regulation.

          • Brien Jackson

            Fair enough on the sketchiness, but he’s right; I know a few people who work for Uber, and they’re insured by Uber for the time they’re servicing a fair. of course, you run the risk that if they’re driving around any other time and their insurance company finds out they’re an unreported Uber driver they’ll refuse coverage.

        • sharonT

          A paper manufacturer now sells insurance? Who knew?!

      • Crusty

        In many places there is a minimum amount of insurance that is statutorily required for medallion cab drivers and it is very low and it is of very, very cold comfort that the driver was insured, when you are in a life-ruining accident in a yellow cab as has happened to two people I know.

    • solidcitizen

      It seems that Uber’s business model relies on willfully ignoring the regulations, then bullying municipalities into making their actions legal. Does this bother you at all? Genuinely asking.

      • howard

        how do you interpret the phrases “the people who run uber are scummy” and “i don’t especially want them to profit either?”

        on the other hand, the traditional yellow-cab monopoly has gotten where it is on the basis of legal and illegal bribery, and that bothers me too, which is what i thought i said already.

        • solidcitizen

          Right. I am trying to balance all of this out, too and just wanted to get your thoughts. I know this is the internet and everything is snark, but I respect your opinions and wanted to see how that factor played for you. For me it is determinative and I don’t have the app to tempt me.

          • howard

            fair enough, so let me make a general comment: i try to be an honorable consumer, but the fact is, we live under capitalism and as a result it’s almost impossible to be 100% honorable in your choices.

            and my bigger picture is that my family of 3 lives in an urban area and make do as a 1-car household. there are three reasons we are able to make do: first, we live in a very convenient neighborhood where, if it came to it, i could walk to any critical need (groceries, pharmacy, bakery, etc.) as well as to the child’s elementary and now middle schools; second, i’m self-employed and work in a home office and my wife is an artist whose studio is about 1.5 miles away; but third is to use cabs (and then, more recently, uber) when necessary.

            so to contribute to a larger social good – fewer cars on the road and less driving – i have to make a choice between two social bads, enriching uber or enriching yellow cab owners.

            so yes, it’s complicated! that’s why i try to look at the question of how are the drivers doing, to cut through the distaste for ownership.

    • Brett

      I’ve always thought of them as a necessary evil, sort of like file-sharing and the music industry. They’re not necessarily good in of themselves and deserved to eventually be wiped out, but they can play a useful role in forcing necessary change on an issue.

      In any case, they seem to be progressing towards straight-out evil, and I’m hoping they get reined in. They’ve certainly set up so much control over drivers that said drivers should be reclassified as employees.

      • howard

        i find it hard to believe that anyone can claim that uber drivers aren’t employees with a straight face, but there are some judges out there who are capable of anything.

        • sum goy

          I am not an employee of Uber. I use my car as an Uber car when (and where) I choose.

          • howard

            speaking as a self-employed person, the irs has a series of tests to see whether you are really self-employed or not.

            within that framework, there are several aspects of the uber-driver relationship that fit the standard self-employed requirements, shall we say (for example, the ability to work when you want).

            but then there are many other aspects of the uber-driver relationship where uber clearly controls your work to the point where it is an employer and not a client, and not the least of those is the matter that has already come up here – insurance.

            • sum goy

              good point. I’ve been driving Uber for 2 years, about to drive in Boston for the summer, starting next week. My own insurance covers me right up until that ping, then James River until you get out the door, but I have heard all kinds of horror stories about Uber fucking people over under the James River policy.

              where/when you want is also a provisional thing. one you login your acceptance/cancellation rate becomes a factor, so that may be a more fruitful legal avenue for those wanting to clarify the employee/contractor status.

              Howard, you raise some key points abut how Uber is good for some drivers, and most riders, but don’t let me get in the way of fact-free Uber bashing most of the rest of the LGM comentariat engages in. it reminds me of my own sisteers and brothers, who rage against Uber without ever having actually used Uber

              • ColBatGuano

                who rage against Uber without ever having actually used Uber

                I don’t see how using Uber gives anyone a better case for expressing an opinion on their business practices.

        • delazeur

          i find it hard to believe that anyone can claim that uber drivers aren’t employees with a straight face, but there are some judges out there who are capable of anything.

          I am not terribly familiar with this area of law, but I think it’s within the realm of possibility that the problem is with the law, not with the judges interpreting it.

    • celticdragonchick

      I was a Uber driver last summer for three months…until Uber told me the car I was driving may have been sold at auction sometime in the past with a “frame damage” disclaimer. That was not on the vehicle report I had when we ought the car…but Uber told me all I had to do was buy a car through one of their “partners” and I could keep driving.

      I told them to fuck off. It was obvious I was being set up to buy I car I did not need and did not want (at loan shark rates).

    • Lasker

      Anecdotal evidence:

      I have a couple cab drivers who I use regularly to take my dog to work since he injured his knee and has trouble with the walk. They are both livery cab drivers in NYC. Both briefly tried Uber and quit when rates were lowered. One is currently working for Lyft since they are offering some kind of bonus for new drivers, but he plans to quit as soon as the bonus is over.

      So, you could say that both of them benefited from the new ride sharing services since they tried it, made a little extra money and were free to quit, but you could also truthfully say that it was a bad deal since they both elected to stay with their current traditional dispatch services in the end, and in the event that services like Uber and Lyft eventually become the only games in town, they will be worse off for it.

      • howard

        meet the new boss, same as the old boss: monopoly power!

        • LosGatosCA

          Not exactly. Since the new boss doesn’t have any capital investment.

          I still find it hard to believe that Uber or Lyft drivers are recouping their investments in their cars and maintenance and then making a minimum wage on top of it.

          • Philip

            Tom Slee’s written about this. tldr: It’s iffy.

  • BiloSagdiyev

    My gut reaction: “Take the Fifth” by the The Young Pioneers.


    I’ll be your work release program
    I’ll be your personal injury lawyer
    Bad credit? No credit at all?
    No problem I can somethin’ for ya
    And if they ask about us
    We’ll take the Fifth

    https://www.youtube.com/watch?v=rE0BmHjXHz0
    (starts 19:18)

  • Murc

    The language games in that article are interesting, and I’m surprised the article itself doesn’t point them out or go into them in greater detail, because someone is being disingenuous here. To wit:

    Xchange wants to address that by striking deals with automakers and Wall Street backers to lease 100,000 cars to new Uber drivers. Uber says they are providing a pathway for poor people to buy a new car.

    Well, hold on there, son. Will Uber be providing a pathway to buy or to lease?

    Because those are two very, very different things. When you lease a car you’re basically renting it long-term; typically, your lease payments cover (assumed) depreciation and that’s basically it.

    Leasing is a great deal if you’re the sort of person who both wants and can afford a sweet new ride every three to five years. It’s an awful deal if you’re planning to own and drive the car for longer than that. It’s an especially awful deal if your credit isn’t sterling; lessees who aren’t “well-qualified” are usually getting a much rawer deal than they would just buying something new.

    That stinks to me. It says Uber wants to basically rent these things to people, and then when they’re done with them and can’t afford to buy the thing outright, they roll them over into a new lease and make some more money by putting the car on the used market.

    The drivers pay for everything and assume all risk, Uber gets a cut off the top and makes money on the side selling supplies to their “contractors.” It’s like an unholy fusion of sharecropping plus company stores.

    • yet_another_lawyer

      The bloomberg article this piece links has more information on the leasing vs. buying question. Looks like a lease with an option to buy at the end, which is presumably a terrible deal for most people.

      The terms of an Xchange lease run 28 pages. Drivers pay a $250 upfront deposit and then make weekly payments to Uber over the course of the three-year life of the lease. As the video promoting the arrangement puts it: “The best part: Payments are automatically deducted from your Uber earnings.” At the end of three years, Uber keeps the $250 deposit to release the drivers from the lease. If they want to buy it, they’ll need to fork over the residual value of the car, which could run many thousands of dollars. Uber declined to provide an average figure.

      • Murc

        There are upsides to leasing. If you’re simply okay with always having a car payment, forever, you get yourself a shiny new ride every three years that you will almost certainly not spend all that much money maintaining or repairing. Your payments are less per-month than someone who is buying a car, to make up for the fact that you’re not paying interest on a loan.

        If you’re the sort of person who can’t afford to buy new anyway and routinely plans on keeping their cars for ten to twelve years and putting 125,000 miles on the odometer before you even think of getting another… then leasing is a really, really shitty deal, because, quelle surprise, the dealers always slant the depreciation numbers well in their favor and they tend to pocket the “due at signing” amount.

        These Uber leases, on reading that Bloomberg article, are nutso. They’re between one and two hundred dollars a week. Yeah, sure, they don’t have mileage limits, there’s nothing due at signing, and there’s no penalty for early termination, but jesus god, that’s still a horrendous gouge.

        I’m looking to buy, not lease, buy, a new car myself sometime in the next twelve months. (My trusty old 2001 Saturn is approaching 150,000 miles. It’s time. I’ve been browsing the Edmonds website like it’s porn.) My credit is pretty shitty, but even with that I can qualify for a decent APR from my bank, because while my credit is bad my overall financial situation is excellent.

        I would not qualify for a forty thousand dollar car loan, and even if I did it would be grossly irresponsible for me to take one out. But if I did, extrapolating out from what I would pay a month on a fifteen or twenty thousand dollar car loan over five years, my monthly payment would be… eight hundred dollars or so. And for forty grand you can buy a luxury car, a Mercedes or an Audi, or something like a tricked-out Maxima with all the options.

        Not a fucking Corolla or Cruze.

        I maybe believe Uber when they say they aren’t making money on this. It might very well be the lenders. But let’s be blunt; the reason Uber is doing this and not simply buying their own fleet is because they want to completely offload the risk. Doing that, even if they don’t make a dime on it, is all they want.

        • Chuchundra

          They’re not really even leases, though. They’re really more like long-term car rentals. You can bail at any time, only losing your $250 deposit. With a real car lease, you can’t get out of it early even you die.

          Seriously, when my mom passed away we had to pay off the full amount of her lease with GM out of the estate.

          If you can get a regular car loan, then this type of program doesn’t make much sense. If you can’t though, maybe it does.

          And I doubt that they’re actually making much, if any money on this. They’re essentially renting new or late-model used cars to people with bad bad bad credit who are them going to drive the shit out them working for Uber. The depreciation is probably going to be substantial.

      • Cassiodorus

        Isn’t that how automobile leases work generally? IIRC, you can either turn the car back in or purchase it for a balloon payment (which is then generally financed.

    • malraux

      I wonder if the lease will have millage limits.

      • yet_another_lawyer

        The bloomberg article says that they don’t, because Uber wants to encourage more driving. I suppose this might be a less terrible deal for someone who plans to drive a lot both for Uber and for themselves.

        • postmodulator

          Everyone I know personally who got screwed by a lease agreement got screwed by the mileage limits. So there’s that. (Based on observation, leasing a car seems to be an excellent way to be offered a job too good to turn down that is a much further commute for you.)

  • tsam

    While we’re talking about evil assholes, let’s pause a second to recognize a true hero in the interest of lyfting our spirits:

    http://www.vanityfair.com/hollywood/2016/06/john-oliver-last-week-tonight-debt-collection

    What a fucking awesome dude.

  • It’s interesting to me that a company can be built on the the philosophy of “the rules don’t apply to us”. I can’t ever recall hearing about an allegedly legitimate company with such disdain for regulation. They pretend their drivers aren’t employees, only independent contractors, they pretend that their pricing is a tip to a friend and not payment for services, they sue every municipality that tries to make them subject to the same safety and insurance regulations as cab or limo drivers. The are a late stage capitalist attack on the idea that governments can regulate businesses that operate in their jurisdiction.

    • Linnaeus

      Regulatory arbitrage is the basis of Uber’s business model. Take away that, and they’re just another taxi company.

      • lunaticllama

        And an unprofitable one at that. The company exists to push all the externalities of its business onto its drivers, customers, or innocent third-parties (i.e., the pedestrian hit by an uninsured Uber).

        • Brett

          They’re unprofitable even with that. Why do you think they’ve been pushing into subprime leases and debt trapping new drivers? It’s because even with massive cuts in rates and increases in their cut, they’re still losing hundreds of millions of dollars per year. People compare them to Amazon, but it’s much more clear in Amazon’s case that they could be profitable if they just scaled back capital investment – it’s not clear at all that that’s the case with Uber.

          I have no idea what the end-game is here. Are they hoping that eventually regulations will catch up to them and they’ll be able to hide on the “inside” of whatever the new system is profitably? Because as long as that’s not the case, the next ride-share service can come along and undercut their business if they start making any profits.

          • NonyNony

            People compare them to Amazon, but it’s much more clear in Amazon’s case that they could be profitable if they just scaled back capital investment – it’s not clear at all that that’s the case with Uber.

            People who compare them with Amazon seem to follow the logic:

            1) Amazon is an Internet Company That Was Disruptive
            2) Uber is an Internet Company That Is Disruptive
            3) Therefore Amazon == Uber (or maybe at least =~)

            What they miss is that Amazon is basically a catalog retailer but on the internet. Yeah amazon skims extra money by dodging taxes, but Amazon could actually pass the taxes onto the customers and still have a workable business model. Amazon doesn’t make the core of their money because of their exploitation of the regulatory structure, it’s just a nice little side amount that supports the core business model.

            Uber makes their money entirely on avoiding the regulations put in place to regulate Taxis in metropolitan areas. Take that away from them and make them operate as a normal, regulated Taxi company and they’ve got nothing else. I’d say it’s remarkable that investors believe Uber’s nonsense, but investors aren’t the brightest bunch of bulbs and all of them probably think that Uber is doing God’s Work by fighting taxi regulatory regimes anyway.

            • postmodulator

              Yeah amazon skims extra money by dodging taxes, but Amazon could actually pass the taxes onto the customers and still have a workable business model.

              As Amazon has a presence in more and more states — necessary for things like Amazon Prime Now — it becomes less and less true that they are dodging sales tax.

              • NonyNony

                Exactly. In fact, a couple of years ago I recall that they were actively lobbying Congress to set up some kind of national standard for paying sales taxes so that they could cheaply collect and pay sales tax in all states. Because it’s reached the point where there are only a handful of states that they still don’t pay sales tax in, and it would be worthwhile to them to pay taxes in all of the states that have sales tax if they could find a way to offload bits of the the reporting they do onto the state governments by having a standard system to work with.

                An argument could be made that Amazon wouldn’t have gotten off the ground at all without the sales tax dodge, but I’m unconvinced without numbers. I think that the “not paying sales tax” was always gravy compared to the core business. But even if it once was vital to them, it no longer is.

          • jlredford

            The end game is to control self-driving cars. That’s why they’re getting these massive investments from the Saudis, Toyota, and Ford. At some point they won’t need drivers at all. At about that point, people won’t need to own cars – they can call one any time. Someone will have to manage that calling system, and they want that role.

            Now, in spite of the breathless stories by Google fan-bois, truly self-driving cars are a long way away. Google can’t even build a reliable thermostat in the Nest, much less build something that can violently kill you at any time. Uber has to maintain their pyramid investing scheme until this vision comes true, and they’re already investing in the tech.

            • Google can’t even build a reliable thermostat in the Nest, much less build something that can violently kill you at any time.

              Oh, I’m sure they could handle the latter.

            • rhoyerboat

              If only to demand same rigor of carbon-based intelligence..

              https://www.technologyreview.com/s/542626/why-self-driving-cars-must-be-programmed-to-kill/

              (As the one commenter said about proper implementation of self driving cars and bribes – it would basically take a violent social overhaul in order to make this happen without decades of tragedy ala’ early railroad construction..)

            • shah8

              Automation is a bluff.

              Companies will automate when there is good business sense to do so, and good profits liable to come from it.

              Companies typically would prefer meat-robots because depreciation costs are on the meat-robots instead of affecting their bottom line.

              The moar robots, the better, and in the specific sense that robots ever *could* directly compete with people–that’s a bluff, it’s always a bluff, and you should call it as such. Tools have always made people redundant since the 1750s if not before. A functioning economy though, finds new things to employ people for as a result–not same generation, but still…

            • Brett

              Self-driving taxis are also at least ten years away. Uber is not going to be floating on endless capital investment while running losses for ten years.

      • guthrie

        Also if you can be cheaper than the opposition for long enough, you can drive them out of business.
        In theory. I think this especially holds with, as someone mentioned above, first mover advantage and the degree to which a modern networked society ends up giving advantage to the one at the top of the search list that everyone has heard of.

    • BiloSagdiyev

      I’d say the groundwork was laid by decades of shitty behavior by other companies playing similar games, and an entire ideological apparatus spraying octopus ink into the air (George Mason U, etc etc.)

      They’ve really got a lot of people convinced that the only options involved are “give the big boys what they want” or “We’ll all be standing in line for beets like in Russia!”

    • yet_another_lawyer

      At least in NYC, taxi regulations serve medallion owners first, the regulators themselves second, and the public in a distant third. The number of medallions didn’t increase for three decades and, pre-Uber, it was often very difficult to get a ride, even in some parts of Manhattan let alone the other boroughs. Breaking the regulatory capture shackles was a good thing and– again, at least in the NYC context– you have to compare Uber employment conditions to the guys who worked for the medallion owners (about the same). I believe you will find broad public support for making Uber/Lyft subject to generally applicable safety measures and a lot less support for entrenching the position of medallion rentiers.

      • twbb

        In NYC all the Uber drivers I’ve seen are livery car drivers who simply use Uber now. The costs are pretty much the same as traditional livery cars, largely because they’re held to the same regulations.

        As for Uber/Lyft/etc. I think it’s complicated when it comes to poor people. They are not great for many (but not all) of their drivers, but they’ve been a godsend to a lot of poor people in places that don’t regulate it too heavily who didn’t have reasonably-priced transportation before this.

        • howard

          i have seen several studies – which, in at least one case, admittedly, was paid for by uber – that suggests that poor neighborhoods get much more reliable service from uber than they do from yellow cab.

          • Denverite

            When I lived on the south side of Chicago, cab service was MISERABLE. I lived in a nice neighborhood (Hyde Park) and not-horrible blue collar cops-and-firefighters neighborhood (Bridgeport), but all that most cabbies knew was that it was south of Roosevelt. That means calling three cabs the night before you had to go to the airport and maaaayybe one of them shows up. It means as often as not when I got into a cab to go home and told them where I was going, they’d demand a “deposit.”

            • sum goy

              cab drivers refusing service based on your address/skin color/gender ?

              unpossible

        • Linnaeus

          It is complicated. One can be critical of both Uber’s business practices and those of traditional taxi companies – it’s not mutually exclusive to do so.

          • Right. I have no love lost for the taxi companies. But the Uber model is so filled with enormous problems that our embrace of it without considering those problems is disturbing.

    • postmodulator

      It’s interesting to me that a company can be built on the the philosophy of “the rules don’t apply to us”.

      Last time this came up, I made plans to move into this space myself. I’m looking for seed money.

      “I have a little list…they never will be missed…”

    • Juicy_Joel

      AirBnB’s business model relies upon willfully ignoring and flagrantly violating local zoning laws.

      • Cassiodorus

        Or alternatively, having the state preempt local zoning in their favor (see: Florida).

  • BGinCHI

    Someone needs to invent an app that allows all of the people who use it to share the profits. Drivers buy in at a low price and pay a small monthly fee and all that money goes to maintaining it, though as a non-profit.

    Just an idea guy here. I’ll let you IT dorks work out the details.

    • Brett

      There’s been proposals for Ride-Share Cooperatives that would do that. In fact, I remember a semi-serious article suggesting that municipalities only allow non-profit ride-share cooperatives – Uber would be relegated to selling the services of their app to the ride-share cooperatives, assuming the cooperatives didn’t simply develop their own independent version of it.

  • This is merely a short term solution until Uber replaces its drivers with robots, as is its stated intention.

    • Amanda in the South Bay

      I tend to be skeptical about self driving cars becoming widespread anytime in the next few decades, which is a somewhat contrarian position for a software engineer to take, but whatevs

      • I’ve been in IT for 25 years, and I completely agree with you :-)

        • postmodulator

          I bet you could hear some serious dirt if you could be a fly on the wall when Google’s self-driving-car engineers were at happy hour. If they ever left the office for something like happy hour.

      • NonyNony

        I’m right with you.

        We’re going to get a metric ton of “intelligent cruise control” options that come our way for the next few decades, but a complete “robot car” will be like the apple of Tantalus – perpetually just out of reach.

        • guthrie

          Oh no, I think we could do it in the next decade. If, of course, you were to bring all the roads up to the correct standard for the car sensors and ensure as quick as possible roll out of driverless cars. And appropriate bribing of municipalities as you call them, in order to ensure that all work favours such a thing.

          • Bill Murray

            and what about all the people with drivered cars that can’t afford to “upgrade”

          • Jamoche

            We can’t even get all the roads up to the standard of “not full of potholes” – not even in Palo Alto – so the idea that we’ll have smart roads with smart cars on them is one of the more laughable bits of the whole thing.

    • NonyNony

      Actually, though – how does that work for Uber? They’d have to buy a fleet of robot cars which kills their current business model (offload all of the risk onto the drivers) dead. And their competition would no longer be taxi companies but Ride Share companies & coops. Once Robot Cars are a thing Uber goes the way of the dodo – unless it’s going to be a neutral software platform that ride share companies license to advertise their cars (which I don’t see being anything worth the value Uber is telling its investors it will eventually be worth).

      If the top guys at Uber are actually saying something like that, then it’s another point of evidence in favor of the “we’re scamming our investors” argument against Uber’s higher-ups.

      • Decatur

        “Lease a car robot from us, sit back, and watch the cash roll in”

      • djw

        They’d have to buy a fleet of robot cars which kills their current business model (offload all of the risk onto the drivers) dead.

        Yeah, I’ve heard that too, and wondered how the hell robot cars are supposed to be good for Uber, based on anything remotely like their current model.

        • Philip

          Because they can IPO and raise obscene amounts of money to get a fleet out before anyone else, I think.

          • so-in-so

            OR, if the cars are self-driving, the appeal to people “that car is just sitting there while you are at work, let it earn money for you…”

  • Casey

    What I find remarkable about Uber (or rather, about people investing in Uber at this point) is that their valuation of 60 Billion dollars requires them to become a global monopoly.

    General Motors is only worth 45 Billion. If you’re investing in Uber at this point, you better be getting a majority shore of taxi traffic worldwide for a long time. They certainly haven’t created 60 Billion in technology. It’s pretty easy to copy their tech. Their infrastructure is all 1’s and 0’s. They’ve built a lot of goodwill quickly, but how much is that really worth? Things change fast. They don’t exactly seem to be geniuses when it comes to PR. (It doesn’t help that every obnoxious New Gilded Age plutocrat has taken up their cause.) Riders and drivers don’t have a huge switching cost to go to some other service. It’s not hard to install a new app on your phone.

    What are investors getting 60 Billion of, exactly? The only way they’re that valuable is if they become exactly the monopolistic behemoth that they were supposedly disrupting in the first place.

    • N__B

      What are investors getting 60 Billion of, exactly?

      Horseshit.

      • Incontinentia Buttocks

        Exactly. With that much horseshit, there’s gotta be a pony in there somewhere!

        • howard

          i think this is very much the amazon stock price issue: the working assumption of investors is that amazon could make more money now but it doesn’t want to, it wants to build its customer base and loyalty so that someday in the future it will make huge monopolistic profits.

          and i think the uber valuation assumes that eventually there are no taxi companies and there are no competitors left standing.

          it strikes me as a terrible assumption.

          • Philip

            I think it’s different, because with Amazon it really does seem to be true. If their investors revolted, they could cut all their reinvestment stuff, undercut everybody a bit less, and be wildly profitable. It’s not at all clear what path Uber has to do that.

            • Chuchundra

              In fact, I believe that Bezos once did exactly this in response to a big short play on Amazon stock. He tweak their pricing, had a big quarter and the short sellers got burned.

    • yet_another_lawyer

      I think this is right. Something like Uber is going to be part of our future, but it probably won’t be Uber. Some competitor using substantially similar technology will swoop in and undercut them with their lack of legacy costs. Uber can incur all the badwill, then the people who make themselves feel better by saying, “I’m boycotting Uber!” will just install the app from substantially similar company Rebu or whatever. That being said, under the “greater fool” theory it can still make sense to invest in Uber. You just have to get out in time.

      • howard

        better way to put what i just said right above you!

    • Brett

      That valuation is straight-up bullshit. Uber hasn’t gone public yet, so that $60 billion valuation is only what investors (many of whom are probably invested in Uber) claim it’s worth.

      • howard

        just to clarify the point: the valuation is based entirely on what uber investors are wiling to pay. there are no outside investors with an impact on the valuation.

  • Something like Uber is going to be part of our future, but it probably won’t be Uber.

    Robot drivers!

    • Murc

      When we finally get self-driving cars I’m totally waiting for this to happen.

      • lizzie

        This reminds me of a case I ran across where the court held a computer in contempt for continuing to send form letters about a debt that had been discharged:

        …this court is mad as you know what and is not going to take it anymore. Accordingly, and pursuant to Federal Rule of Bankruptcy Procedure 9020, the court determines the NationsBank computer to be in civil contempt of this court. Upon consideration, it is ORDERED that the NationsBank computer, having been determined in civil contempt, is fined 50 megabytes of hard drive memory and 10 megabytes random access memory. The computer may purge itself of this contempt by ceasing the production and mailing of documents to Mr. and Mrs. Vivian.

        In re Vivian, 150 B.R. 832 (Bankr. S.D. Fla. 1992).

  • junker

    Vox had an article the other day that I can’t seem to find about how Uber and Lyft and their ilk are using capital investment not to produce things of worth, as it was previously understood capitalism should work, but to continue to run at a huge loss to grow the company and kill the competition. So Lyft for example had a promotion where they guaranteed $1500 for a week’s worth of work that ended up being worth only about $900 to the company – essentially taking a huge loss to get a driver into the system.

    • Murc

      Vox had an article the other day that I can’t seem to find about how Uber and Lyft and their ilk are using capital investment not to produce things of worth, as it was previously understood capitalism should work, but to continue to run at a huge loss to grow the company and kill the competition.

      Eh?

      Using capital to run at a loss to kill the competition is as old as capitalism, man.

    • sum goy

      Uber uses promos like that, too. a smart driver depends on the promo rates (and the surge rates) to actually make a decent amount of money, either as per-mile calculations or as per-hour calculations. the problem is the need for speed/ amount of trips drives up the depreciation of your car

    • guthrie

      So is this basically negative production? Or to take it further, deliberately increasing entropy in the system and creaming off some more energy for themselves, kind of how like we use thermal machines?

    • olympic

      So basically what Amazon has done for years? (and continues to do).

      • Philip

        No. Amazon isn’t (usually) hemorrhaging money the way a lot of newer companies are. They keep themselves pretty carefully near the break-even point.

  • Crusty

    While getting into the sub-prime loan game may be new, before uber, black car drivers for the traditional “car services” were also independent contractors who paid for their own cars.

    • Lasker

      True and important. But the Independent contractor designation is more reasonable for those drivers because they typically have more control over which jobs they accept/reject and the prices they charge.

      Basically, it is a classification that has been abused by all kinds of employers for a long time and Uber is a pioneer more for their brazenness than anything else.

      • postmodulator

        This is my own pet hobby horse, but it’s been abused by strip club owners for, I think, as long as there have been strip clubs.

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