Uber is a "bezzle," doomed to disappoint the suckers who buy into its IPO

Originally published at: https://boingboing.net/2018/12/09/no-moats-no-walls.html

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Uber is the company that finally shattered the last remains of my openness to nineties-style Silicon Valley Movement optimism. I already knew there were serious problems apparent with Amazon, or even Google, but at least there was an upside to those businesses. And there were grubby businesses like Facebook and Zynga, but there always will be.

But Uber’s pitch was “look, we invented a crooked cab company with shitty Victorian-style labor practices!”… and everyone treated it like any other Silicon Valley startup. If you were still hoping this culture valued cool technology or outside-the-box thinking or utopian ideals or whatever, this is where that hope became a joke.

I mean, the sorts of people who used to invent the future at Xerox PARC or whatever still exist, I’m not being apocalyptic; it’s just that if someone works for a Silicon Valley (-style) startup, that is now a copper-bottomed guarantee that they are an unpleasant huckster person deserving zero of your attention.

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This is just wrong. Moore’s law shows that the rider base for cab services will double every two years and city road capacity will increase to keep up with that increased rider base.

There is no reason for public transportation or private car ownership.

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I understand the economic argument that Uber is overvalued, and I agree that because of that it will be a dangerous investment when it goes public. But let’s not throw out the baby with the bathwater. They HAVE disrupted an industry that sorely needed it.

The previous model with artificially scarce, tightly controlled taxi medallions obtained through political connections; bad, unreliable service, and surly drivers, was not a good model for an efficient or customer-friendly business. It was only a matter of time before someone came along with something that served customers better.

Uber may have done a bad job with the financial model, and if so it may crash and burn. I’m also not a fan of Uber’s management, personnel policies, etc. It probably deserves to go down. But it has proven there is customer demand for such a service, and so has paved the way for others to do it better. The taxi business as a whole will be better for it.

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City road capacity cannot increase to keep up with demand, or it already would have and our urban centers & freeways would not suffer from daily traffic jams. Ride sharing is only making it worse with so many more “unoccupied” vehicles just cruising around waiting for a fare.

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Like Bezos says about amazon, it is when not if it fails.

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Your sarcasm detector may need an adjustment.

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Valley tech firms like to talk a lot about “disruption,” but Uber took it to a new level, in the sense that they started out by basically breaking a bunch of laws and regulations and then hoping their lawyers could somehow fix it up later. It did work to a large extent, but you can’t expect much in the way of ethical behavior when that is your operating philosophy. Their CEO was recently forced out for among other things allegedly ignoring sexual harassment in the workplace.

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So this is a tech start-up that has no real way of making money, and only exists to burn through investor cash until the right people can cash out?

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Welp ya know what they say about Poe"s Law: Edgar Allan didn"t write it.

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It’s a shame that his contributions are so often misattributed.

A great and wise man. Where would Caine have been without him?
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It’s not just a question of degree, though. When people originally started talking about “disruption” as a good thing, it meant “being smarter and punching up”; now it means “having more money and firing a flamethrower down”.

I mean, there were always some pretty serious flaws with “disruption” anyway, but the current form is not even remotely the same thing as what early issues of Wired magazine were excited about.

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I dislike Uber at least as much as anyone. But I’m not convinced it will crash and burn that quickly. The analysis in the linked article makes the same mistake as most economists make: it assumes people act rationally when assessing their income and spending. Some Uber drivers do – they are the ones who abandoned Uber when they realised it wasn’t paying enough. But the vast majority of Uber drivers treat their cars as sunk costs. They have to have a car anyway, and it will depreciate anyway. So any extra cash they can earn driving people around is just extra cash. And people like extra cash, especially if it’s easy to earn, with no barriers to entry. I don’t see Uber’s massive pool of drivers walking away from it any time soon.

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The article didn’t even figure in the cost of settling sexual harrassment suits based on driver and upper management conduct

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This is true, the article posits that “after 9 years” Uber’s big breakthrough isn’t going to happen, but that same argument applies to why drivers won’t suddenly abandon it.

However, when companies don’t grow their stock tends to fall, and that’s why unless Uber keeps growing rapidly the stock is a bad bet. At some point, at least – often enthusiasm for a stock is irrational. But doesn’t it seem like the zeitgeist moment for a soaring Uber stock price is long over?

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There is no real reason for this other than that individual vehicle owners are being ripped off.

Cars are money pits. Is this intrinsic to the technology, or is it that ordinary people are being turned upside-down and shaken like marks at a casino?

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Except that there are plenty of markets where taxis work well. Well worked well, until Uber came and fucked them over, turning everyone - including the exisiting drivers and the Uber drivers - into zero-sum losers.

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Yes, absolutely. For example, Uber is tuned for high population density areas, and doesn’t work so well in exurban and rural areas. But there’s no reason different markets can’t have different solutions.

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Anyone investing in Uber is betting on autonomous cars, and on autonomous cars coming soon. Which they won’t.
And Uber isn’t the only company with this problem. Looks like the competition is getting creative.

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