Friday, March 23, 2018

Uber is just a scammy gold exploreco, here's why


Getting into annoying discussions about Uber at school in a transport policy class, so I'm going to unload here.

First:

Uber really just gains traction by being another genocide-of-the-proletariat story: hey, wouldn't it be great if we just got rid of 4% of the US workforce that make a living driving? It's a totally bourgeois story.

Second:

Hey, remember when Uber was a taxi company? Yeah, that worked until the London cabbies put an end to it.

Fact is, Uber was only "revolutionizing" taxi service by inventing a poorly-thought-out workaround for labour laws, where they asserted their drivers were private contractors. Once they had to treat drivers like everyone else treats drivers, they had to get out of the taxi business.

I think there might have also been a problem in Uber not owning plates. See, taxi services get regulated with a plate system, which is an enforced restriction of supply. That is needed for their industry to stay profitable: in an unregulated libertarian free market, driving becomes a zero-entry-cost perfect competition environment, and by definition nobody can make money in one of those. I'd like to know if there was ever a suit against Uber for operating in a market without plates.

And in any case, Uber shows how fucking stupid they were by trying to operate in a perfect competition market: that is not where you start a new business, ever, and hopefully they're fucking teaching this in first-year business school.

So, now they pivot out of the taxi industry to become a "self-driving car" company.

No, self-driving cars will not be allowed onto the road until tort law catches up. That's what makes this Arizona case so important: it will establish who has liability for tortious injury caused by a self-driving car.

And I'm sorry, but no trucking company is going to dump their driver Sanjeet for a robot, because Sanjeet is the guy who can take the blame for a fatal collision. With Sanjeet replaced by a robot, either the trucking company will have to assume total liability as owner, or they'll be renting from Uber who will then have to assume liability as owner.

And no, you don't make money by creating a business that just buries you in liabilities. And no, existing companies absolutely never change their mode of business to increase their liability. Ever.

So Uber can't make money in self-driving logistics.

So now Uber falls back on the idea of taxis... just that now they'll be self-driving ones.

Which is stupid. Gwynne Dyer (who is generally fiercely intelligent in the field of political economy, but is way out of his fucking wheelhouse here) repeats the vacuous crap that

The long-term impact of autonomous vehicles on private car ownership will be just as great. A recent KPMG survey of car industry executives found that 59 per cent of chief executives believe more than half of today's car owners will no longer want to own a car by 2025 — just summon a cheap self-driving taxi whenever you want to go somewhere.

It's Uber on stilts. Self-driving taxis will be everywhere, and respond to the summons in just a minute or two. No parking problems ever again, and far less congestion on the roads because a taxi fleet one-quarter as big as the current total of private cars would suffice to meet even maximum rush-hour demand.

which ignores the fact that we fucking have that now. Right now you can hail a car that takes you anywhere you want to go. It's called a taxi. And nobody takes them. I know for a fact that during the day, my urban neighbourhood only has 3 cars in my dispatch area from one of the three taxi companies. Those taxis ain't replacing more than 0.01% of my neighbourhood's car fleet, and it's not going to change.

Again, the only way Uber could increase usage is by reducing cost to patrons, which can't be done profitably otherwise taxi companies wouldn't need licensing systems to constrain supply.

And Uber has never been profitable - even when they were running their cab service all over the western world in violation of labour laws, they still needed a constant influx of cash from printing shares just to stay in business. If you can't make money in that paradigm, you're not going to make money in a new paradigm that just copies it.

Uber is nothing but a bullshit gold exploreco, spinning bullshit stories to people who don't know anything, so they can print more shares and sell them to suckers. Their real business is eating share capital.

And the fact they just handwave their way through liability issues and labour law issues and the fucking iron rule of perfect competition markets shows they have no fucking clue what the real world is.


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