Gravel Institute on how Uber is a scam

Originally published at: Gravel Institute on how Uber is a scam | Boing Boing


There’s a reason Uber is illegal in many countries or has to operate in such a modified form as to be basically indistinguishable from a taxi company.

The independent contractor thing for example is very much illegal in Germany. If you only work for one client you are not an independent contractor and both you and your “client” will get in trouble. Then there are questions of training, insurance and vehicle modifications for passenger transport. The European Court of Justice has ruled that Uber is a transportation company, not a tech company, so they’re on the hook for all of that as well.


I’m not sure that a comparison to PragerU is a good thing here? Either GI is also a terrible dumpster fire (in which case it is the lefty version of PU) or it’s OK (in which case it isn’t.)
Note: I haven’t actually watched the video.


Uber can’t even get profitable by becoming a monopoly since the barrier of entry is too low. Someone with lower overhead costs would enter the market. You have to wonder about the competence of the investors who put money in a company like that.


Maybe it is some sort of tax-write-off thing? I don’t pretend to understand the workings of the libertarian capitalist system.


It’s an answer to PragerU in that it is a response to their bullshit and not leaving it to go unchallenged.


Uber definitely is a scam (these days mainly serving as a money laundry for Prince Bonesaw and his garbage extended family) predicated on false promises (first realsoonanydaynow self-driving cars, now the disappearance of every public transit system in America). Kalanick was, before he was ousted, the textbook example of the awful Silicon Valley AynCap techbro.

All that said, I’m not going to give the traditional taxi industry the free pass this video does. It took years after Uber started for the sclerotic old taxi companies to wake up qnd develop their own (badly implemented) ride-hailing and route-finding and payment apps. Unless the company was already a co-op, taxi operators viciously lobbied against unions. And the taxi drivers who killed themselves in recent years were as much victims of predatory lenders and crappy medallion monopolies (especially the notorious and corrupt one in NYC) as they were of the rideshare companies that instantly put those million-dollar medallion mortgages underwater.

Uber is obviously not the best alternative to that system, but let’s not ignore the fact that the old system was exploitative and rotten in its own way.


In my experience, taxi companies are 1000x worse. My experience is mostly from used when travelling, and I don’t use Uber more than 2-3 times a year, but saying Uber has not innovated is ridiculous. If you don’t know a city, finding a cab can be terrible. Outside of Manhattan and maybe a couple other places, you are stuck wandering around finding a Hilton or something with a taxi stand, or waiting 45 minutes for a dispatched cab if you can even figure out who to call. Inside manhattan, you can get stuck trying to hail a cab as they drive by–I’m sure it is even harder if you are a PoC. I’ve been told by cabbies that they won’t go to where I needed to go. I’ve called taxis multiple times and they never showed up (or were probably just taken by someone else). Unless it is a well-regulated city with zones or fixed trips, you rarely know how much it will cost until you get there. I’ve scheduled taxis 24 hours in advance for a 4 am pickup and they have gotten stolen from me by another person in the lobby. Multiple times, from sioux falls to istanbul, I’ve been taken on the ‘long’ route which doubled my fare. At the same time, I have walked out of a conference in Berkeley and (along with 20-30 other conference-goers) and gotten an uber with about a 10-minute wait at rush hour. I seriously doubt a cab company would have been able to send a cab without a 1-hour delay. To assert, as this video does, that uber has not innovated is plainly false–they have fixed almost all of these problems with local taxi services, and have moved on-demand taxis availability outside of city centers.

Anyway, I do buy that maybe they are scamming their investors, because they haven’t turned a profit, but their profit margins/losses look a lot like Amazon’s did for 20 years. This means the customer is paying less than the cost and the driver is getting paid more than what they are bringing. Yes, they want to be a monopoly (so do many modern companies that you use every day), but they have a lot more headwinds in making that happen than amazon, microsoft, google, apple, etc…
I don’t buy the poor exploited foreigners not being able tho make remittances–Many drivers I see also drive for Lyft–how many jobs can someone work for a company AND its main competitor? Try that working for a taxi company. I’ve ridden in Ubers that were Mercedes SUVs driven by these poor immigrants. Maybe they are just laundering money, but somehow they are making enough to afford a better car than I can. It may sound like it because the gravel video is so easily disputed, but I’m not really an Uber apologist and prefer to walk or take public trans if it is an option. But many of the points they made in this video are just patently false and appear aimed at propping up the narrative of a political group. So I guess the comparison to PragerU is appropriate.


Not everywhere had that system though. Here you can get a licence for something like €300 and sitting an exam.

I’ve never used Uber as they aren’t really here but there are apps for Taxis. The innovation there is smartphones in everyone’s pocket, GPS, mobile payments, mobile data, server racks, cloud servers etc. The front end is probably the least big deal in all that massive multi billions innovation and investment.


Agreed. To be clear, in the earlier comment I was talking mainly about the American taxi industry, especially in big cities. From what I understand, Uber doesn’t do so well in better regulated/less corrupt taxi markets elsewhere.


Rudimentary math tells you that as a driver you are f@cked from day one.


Ours used to be locked down with plates costing a fortune too. All it takes is a will to get rid of it and a decision that the rent seekers have cost the public enough and time’s up. They won’t have popular support.

An app is a totally fucking trivial “disruption” though. There’s decades of innovation, general and special relativity both being used, huge infrastructure and technology dispersion. The notion that Uber are something to be reckoned with because they have an app is laughable. It’s all the other stuff that is borderline miraculous. Anyone can have the app at the end of all that.


Maybe they were sold on the ridiculous idea that they could actually get ahead through these companies, and sunk everything they had into a nice car to attract customers?


Your take also sounds quite racist.


Good article related to this from Naked Capitalism in 2016.


It is, but the flipside of that is that the traditional cab monopolies in the U.S. were so complacent that it took them years after Uber started to come up with apps of their own. With a relatively small R&D investment (especially spread out over a number of big cities) they could have rolled over Uber early on. That they didn’t tells us a lot about how crappy and self-destructive that industry is.


It sounds more racist to assume poor immigrants are innumerate and can’t possibly make rational financial decisions.


Falling for lies and scams doesn’t necessarily involve math. It does, however, involve inexperience in a new country. That’s what companies like this prey upon.


I wonder was there some suppression cash spent there? I haven’t been following the cab app industry much but I know there was a bunch of consolidation and buyouts in the past few years.

Meet the new tyrant, works just like the old one!


Correct on the first point (which is part of the scam perpetrated on the investors), wrong on the second. In the traditional taxi industry, the bosses screwed over both the consumer and the driver. In Uber’s case, they’ve shifted the cost burden over to the driver (who, in addition to Uber’s nickel-and-diming, has to own and maintain his own capital equipment and cover his own insurance costs) and the investor (on the bogus promise that their subsidising the rides will result in a monopoly in the future).

In the past, before Uber convinced its investors that being a duopoly wasn’t so bad, the company took a few tries at trying to ban its drivers from working for Lyft.

Some of them bought their cars via (predictably shady and exploitative) subprime loans from Uber.


Not necessarily, those companies were based on the old fashioned idea that a company needs to turn a profit. Uber could run at a loss while burning billions in investor money.