The best thing I’ve seen about Uber recently comes from about a month ago. The Wall Street Journal wrote up a perfunctory story about the company’s $50 billion valuation, and it included a very truthful passage. So truthful, in fact, that presumably some PR flak got on the horn and made them change it for the online edition. @NeilAnAlien captured it on Twitter.
Online edition: “The company hopes to attract enough drivers and passengers that its business model becomes profitable.”
Print: “The company hopes to build enough loyalty that it can charge customers more and pay drivers less.”
At this point I should mention that attempted monopolization is a criminal action under the Sherman Antitrust Act.
C'mon. Nothing is too much for the Roberts Court. See also. I hope that the courts have the stones to back up the NLRB on the subject of contractors. Fuck Uber, but also fuck all the many, many other companies, tech, fast food, etc, who treat their employees the same way.That’s why you can expect Uber to appeal, and the same Supreme Court that backed up big business and closed the courthouse door to workers in the Walmart case might get a shot to do that for Uber. However, the rank stupidity of their argument – that everyone’s a contractor but nobody’s the same – might be too much even for the Roberts Court.
I'll tell a tale. I worked as a CSR-like role (that means customer service representative, to cut the jargon), albeit indirectly, with Uber. I have an NDA (non-disclosure agreement) that's pretty strict, so some of the following language has been sanitized. There's a local office in the city that I may or may not currently live in which has a lot of drivers and a good relationship with the airport, meaning that it's a relatively 'old' city by their book. 'Old', of course, means that they've cut rates a few times, and they have a lot of customers. I worked in-house dealing with driver side issues, ranging from payment issues, compensation for cleaning costs, and on-boarding. It was New Years Eve, 2015 and we had an office party. There were two 4K monitors in the main part of the office. One was displaying an internal application that showed every online driver represented by a car; if they were moving to pick someone up, it was highlighted red; if they were currently carrying a passenger, it was highlighted green. There were also red dots on the screen that represented every person in the city viewing the app on their phone. The other monitor was displaying a global view, and it was a data visualization of the total number of rides serviced during the course of the night. There was a countdown to 1,000,000 rides that completed before I left, hours before midnight. There was a dateline that progressed from the easternmost side of the map to the westernmost. Each major city that the company operates in had a circle with the center pinpointed at the location of the city. Every time a transaction ran, the bubble would increase in size. NYC took up a good third of the eastern seaboard, and major cities in China were likewise gigantic. Western Europe has its fair share of heavyweights as well. And it was amazing. The most interesting thing about Uber and where it stands compared with other private, highly valuated, companies. Ref: http://www.economist.com/news/leaders/21659745-silicon-valley-should-be-celebrated-its-insularity-risks-backlash-empire-geeks But staying private has risks, too. One is that firms under no obligation to make public a full set of audited accounts will remain veiled from the scrutiny of analysts and short-sellers and so act irresponsibly. America’s tech “unicorns”—firms that have reached a valuation of more than $1 billion—are worth around $300 billion between them. The danger that some of this capital is being misallocated is high.
For what it's worth, I know a guy who "works" for Uber full time and loves it. He sets his own hours and really doesn't have a boss. He doesn't have much ambition in life besides playing rock and roll. It's a better job than cooking or working the door at clubs. Years of being a good door guy has made him extremely good at handling people in a gentle and pleasant manner, his skills transfered. He's keeps a clean vehicle and knows the town well. He knows when to shut up and how to shoot the breeze. He gets top marks from his "coustomers". It may not be the right job for everyone but it's the right job for some people. It's going to be the best job that some people can find. Uber may not give it's workers the best deal but it's better than many other things that you can do for a living.
Sure he does. 1) He didn't have to buy a medallion. 2) He doesn't have to carry commercial carrier insurance. 3) He didn't need to get a CDL. 4) He "really doesn't have a boss." 5) He pays no taxes to the city. Those four things evolved in the livery industry to protect customers from the liabilities of hopping into a stranger's horsecart and going for a ride. In many ways, the taxi industry has calcified into a throwback from another generation but in many other ways, the impediments to progress engendered in taxi services are those things that account for the externalities of the profession. Uber, for their part, has to pay none of the fees above and gets to split the fares with your friend. It's great! They provide an infrastructure whereby individual practitioners can flaunt the law and earn a stipend on the side. And I do mean stipend: - 62% of Uber drivers are part-time - 51% drive 15 hours or fewer per week - 3/4ths of Uber drivers have been driving for less than a year Fun fact: Uber drivers make about 25% more than cab drivers, on average. Why is that, economically? Why is it that Uber is valued at $17 billion while nobody has ever said "hot damn, I wanna get in the cabbie business?" Did they really crack the code? Or are they just circumventing the protections and tariffs that have evolved to protect the consumer and the municipality over the past 100 years of driving for hire? Good for your buddy... but if he subtracts 66 cents a mile and health insurance, how's he do?
All points well taken. I was mostly just responding to the "slave driver" title. There are plenty of shitty employers, Uber seems pretty far from the worst. Doesn't mean their drivers and the communities Uber serves shouldn't try to get a better deal. I've never used Uber and I won't even consider using them until they can find a way to give handicapped people the same service the cab companies have to.
More important than who handles the money, when I think of a contractor, I think of someone that decides how much he/she will do the job for. That's not the case with Uber. Uber decides how much a driver is paid, the drivers can only choose whether or not to do it. That's all well and good, but that seems more like an employer/employee relationship. Another approach to this problem is to have all pay include a benefit portion regardless of the nature of the work. But that is a long time off at best.Remember, the customer doesn’t even pay a driver, the payment goes through Uber.
Speaking of Uber, how the fuck is Uber worth $40 BILLION? Caterpillar is worth $45 Billion. Ford has a market cap of $55B. Ford also had $142 BILLION in income last year. Tell me again how an app that has no real product is worth the same as a company that takes in $142 Billion a year? And how the hell is this not the sign of a stock bubble like we had in '97?
So check this out. I love this. You know how Warren Buffet will buy things because he thinks they're worth money in the long run? Turns out that's not actually common sense, it's "firm foundation theory." on the other hand, it turns out Greater Fool Theory is not only a thing, it's the fundamental principle John Maynard F'ng Keynes used to explain the stock market. Keynes straight up said that it doesn't matter what a stock is worth, it's what you can sell it for. In other words, Uber is worth $40B because the consensus is there are enough idiots in the stock market that Uber stock could be sold for $40B. This is how Reddit ends up with a half billion dollar valuation - the VC firms in the Valley figure there are enough idiots out there buying stock that a scandal-ridden BBS full of creepshots and racism is worth half a billion dollars to Ma and Pa Daytrader. Kind of amazing when you think about it, but also accurate - somebody made a stone-cold killing off of Pets.com. It just wasn't most people. SO: Uber is worth $40B for exactly long enough for someone big to say "no way is Uber worth $40B" and someone else to short Uber to $30B and inverse tech ETFs to push Uber to $20B and "consumer sentiment" to push it down to $10B and before long it's a joke but in the mean time... Yeah. One of the analysts I follow recently pointed out that Shake Shack has a higher valuation than the entire coal industry. Valuations clearly aren't based on fundamentals.
And this explains how Whatsapp and Snapchat have a stock valuation worth more than the cost of the servers.Keynes straight up said that it doesn't matter what a stock is worth, it's what you can sell it for. In other words, Uber is worth $40B because the consensus is there are enough idiots in the stock market that Uber stock could be sold for $40B.
francopoli exactly, this. I don't disagree with you at all. It all needs to just die in a fire. I like that phrase. I should use it more. Perhaps on another site that shall not be named, because those users do not contribute useful content. / end total rant of everything wrong in the world.
A crazy taxi company that does not own its fleet and is at the mercy of randoms who find the service exciting and worth the cost. As soon as people get bored with Uber and Lyft they will collapse like MySpace. This is why I NEVER invest in websites or services that depend on user generated content.
At the mercy of randoms? I'm not sure. With a valuation this high, marketing is a piece of cake. Also, once widespread adoption has been maintained, the network is taken hostage and/or is too unwilling to jump boat (see: Facebook with the greater mid-older generation). One shouldn't make the decision, in my opinion, to refrain from investing in certain stocks-type however fragile, especially because of the volatile nature of it that enables it to surprise the market. Also, insider information is valuable in the right hands and is always a possibility.
I 100% agree that the model needs to be fixed and simply saying that it is a lot better than the taxi cab monopolization/industry is not enough. They need to behave like a real company and have real benefits and treat their drivers right vs. working them so hard with unrealistic expectations. With that said, I do love the Uber service. I personally do not drive for some personal reasons and it has literally saved me from having to use the bus system which, in the cities I live and am in-between that is a huge lifesaver!
Taxis are terrible. It's a predatory system that needs to die in a fire. However, Lyft seems to be able to do the ridesharing thing without people setting cars on fire in Paris. And I think that's the greater point of the article - Uber is at the head of the pack because they're the most predatory of any of the services and are making money so long as they can flaunt the laws. The minute they're held accountable as employers and as a livery service, their profit margins plummet. I agree with you - the car hire industry has been ripe for reform and something like Uber makes a lot more sense than $1m taxi medallions. BUT it's not like $1m taxi medallions evolved in a vacuum so while we celebrate their passing, we should also recognize that they provide some sort of intrinsic value that Uber has externalized away. I'll say this: fuckin' Uber stickers are three deep up and down the Blvd on Friday night. Considering taxis have to pay taxes to the city and Uber doesn't, that's me they're screwing.