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Comment by soneca | Hacker News Reader

So why Lyft get none of the protests? I think you are mixing unrelated subjects.

Uber final product is good for society. And other companies can provide the same product (in my city, São Paulo, there are other 3 good companies in the same space).

Uber practices as a company are toxic for its employees and some of the toxicity leak to society.

If such calculation was possible, I believe it would show a net positive impact in society. But a company with good practices and the same product would have an even larger net positive impact.

As a society, I believe we should not settle for bad companies making good products, that's why I believe all the protests are legit.

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Once upon a time I heard a concept in motorcycling of the sacrificial jerk. This was when you deliberately rode behind someone who rode like an asshole. In turn they provided the upper boundary of your willingness to break the speed limit and for you to ride like an asshole, in hopes that they'd attract the ire of the police instead of you.

Leaving any motorcycle safety conversations aside, I think Uber has been the sacrificial jerk of the rideshare industry. Lyft probably would have attracted some of the same issues if there hadn't been someone more brash and more willing to flout their law breaking ahead of them.

Now Uber's explosive expansion and the resultant "they're gonna do it anyway, may as well accommodate 'em" reaction of the regulators has more or less normalized the good parts of the rideshare industry. Lyft and perhaps other competitors-to-be can benefit without taking nearly as much flak. Hopefully you're right in terms of the ability to provide a much bigger net positive in that situation.

I call this the "pace car" when driving. You can do anything the pace car does because he'll get caught first - he sets the pace.

Uber is the pace car and the police pulled him over, Lyft saw this and applied their brakes.

I've always heard it called a 'rabbit' [1], but I like 'sacrifficial jerk' and will probably use that from now on.

1. http://radartest.com/Top-5-Tips.asp

We always called this guy the 'red herring', to throw off cops.

We call it a horse in Lithuanian, because it's always in front of the carriage.

And no, we don't use horses anymore.

We called them designated decoys where I grew up.

We call this guy "lightning rod". Interesting how we've all identified this actor with different but essentially synonymous terms.

My term for this is "minesweeper"

One thing to remember is many cops will grab the car nearest to them instead. It happened to me when I was matching pace of traffic while speedometer went out. I was in the back. Cop pulled me over instead of the speeding leader.

Exactly... or they can direct you to pull off the road and then get the others and you just have to wait there.

I've heard the term "bear bait."

*Smokey (as in the bear) being CB slang for highway police due to the hats.

I think you're right. The whole thing is complex, with labour law/norm implications, entrenched and concentrate interests in dozens of jurisdictions. Also uncynically ideological objectors. It was inevitably going to draw a lot of fire. I'm personally shocked at how far and wide uber have managed to spread.

Leaving aside broader questions, I think we can take a guess at what happens after Uber gets pulled over. Someone will take their place. What soneca said above makes reasonable sense.

OTOH, I'm not sure how useful this culture of rebuke and scolding really is. I think it's a bit extreme to wish for regular corporate collapse because of scandal. Reform needs to be an option here. Then again, maybe an occasional sacrificial lamb is good for making the other lambs ride slower. If it doesn't really matter who it is, may as well be the jerk.

I will say that their management of internal culture isn't something I have any sympathy for, and I hope that doesn't end up being where boundaries are pushed. There is certainly a tendency for armchair kneejerking in today's culture wars, but Uber's personnel issues go beyond the gray area in my opinion.

We call such vehicle "a sponsor", because it would get fine instead of those driving behind.

Actually such a calculation is possible (of consumer surplus), though perhaps some would argue against one or another part of the methodology.

See: http://freakonomics.com/podcast/uber-economists-dream/ or http://www.nber.org/papers/w22627.

> So we found that in 2015, if you extrapolate to the whole U.S., we found that the overall consumer surplus added up to almost $7 billion. So people spent about $4 billion on Ubers, but they actually would have been willing to spend about $11 billion. So for every dollar people spent on Uber, they got about $1.50 worth of extra joy that they would have been willing to pay on average above and beyond what they did pay. And to put it in a context just how big this consumer surplus is, the total amount of money that went to what Uber calls the driver partners, the people who are driving the cars, was something like $2.5 billion. So the consumers got more than twice the benefit of all the money that went to the drivers. And Uber itself only got to keep about $1 billion.

Of course, none of this makes Uber immune to criticism for the way they operate as a company. And there are sufficiently many alternatives that, even without Uber, society is likely to continue reaping benefits from ride-sharing as a technology.

Tl;dr: Uber needs to raise its prices.

They probably felt comfortable taking a loss while they expanded more on these subsidized prices. As long as they don't get involved in harassment claims and theft of a competitors IP they should be in a strong position to start raising prices....

Oh, wait!

I would conclude that Uber is spending extra money to expand the market just as Amazon took losses to expand their market. They don't need to raise prices, but eventually reduce overhead per ride.

They really don't. Uber represents itself as profitable for Uber drivers, but this is only true in the short-term. When you factor in car maintenance and depreciation etc, the "profits" that Uber shows you essentially go out the window. It's equivalent to selling a tiny bit of your car's value.

If Uber raised their prices, the average real value would drop from its current real value of $2/hr, to...

Hell if I know, but it could well be negative.

I believe most consumer industries have consumer surplus, since different customers are willing to pay different prices but the companies can only charge one price. This includes the taxi companies that Uber displaced. From reading the abstract, this paper does not calculate the additional consumer surplus generated by Uber beyond taxis.

Note that it doesn't follow that Uber would make more money simply by raising prices -- consumer surplus measures the amount Uber could make by charging each user their "true" value, but if Uber simply raised prices, then they would lose demand.

However, Uber is actually starting to use price discrimination (i.e., charge different users different prices based on their characteristics), which would eliminate consumer surplus [1].

[1] http://www.business-standard.com/article/companies/uber-s-ne...

Uber is the largest player by far, so they are an easy target for frustrations and for incumbents. "Uber" is almost a generic term for a iPhone hailable vehicle. Generally, there is market competition for drivers. For example, Lyft for those drivers who are unhappy with Uber. You have stated that in your city, São Paulo, there are 3 good companies. If one company mistreats drivers, they would go to a competing firm and the firm would lose revenue.

That's why I trust capitalism. Its dynamics allowed Uber to create a market, but also keep it in check for bad practices.

Do you think the same about telecom monopolies and the negative externalities of fossil fuel companies?

telecom monopolies are government enshrined, so not capitalism. Negative externalities of burning fossil fuels (plastics are a fossil fuel product) are allowed because government allows people to pollute "some"... not capitalism.

I don't understand your second sentence. Government currently allows some pollution. Should government disallow all pollution?

OP is saying that government allow a certain amount of pollution. A government could decide to forbid pollution altogether (whatever that means) and still maintain a capitalistic economic system.

We have generally forbidden dumping barrels of spent oil in rivers, for example.

Likewise, a non-capitalistic system can forbid or not pollution.

To the extent it owns land, yes.

Perhaps the defenders of capitalism should have to account for the effect their economic system has on the government and its ability to properly regulate the economy given the immense private wealth that the owners can use to influence policy and politicians. It is an economic and political system, not purely an economic system.

You're conflating free markets with capitalism. And once laws are influenced by capitalists, the market is no longer free.

And this is again a failure of government, not capitalism. As an analogue, you cannot say that socialism is a flawed system purely because of what happened in russia-you must not mix up economic and political philosophies.

The free market determined that that was the fair price for government policies to be bent towards industries' or actor's will. You'll forgive people critiquing the economic system if it freely and naturally leads to the ills we find objectionable.

And on the contrary, I absolutely do hold the failure of the Soviet system against central planning and command economies, even socialist ones. Given that, I find democratically-executed socialism using markets for prices (some consider this market socialism) much preferable.

You can if your complaint (as above) is that the economic system has adverse effects on the political system or vice versa. Would you claim you shouldn't attribute the resulting explosion to water when you pour it on sodium because one is a liquid and the other is a metal?

Telecom monopolies were created because of this:

http://www.sandman.com/images/oldpolewires1sm.jpg

They were government regulated until that didn't work, then broken up. After the subsequent deregulation, the monopoly is in the process of re-creating itself now.

Hahaha holy crap!

I think that may be a picture of phone lines when they were point to point i.e. each connection had a dedicated line rather than going through a switch. I don't think it had anything to do with thousands of telecom companies.

"Under Theodore N. Vail from 1907, AT&T had [...] acquired many of the independents, and bought control of Western Union, giving it a monopolistic position in both telephone and telegraph communication. A key strategy was to refuse to connect its long distance network — technologically, by far the finest and most extensive in the land — with local independent carriers. Without the prospect of long distance services, the market position of many independents became untenable. Vail stated that there should be "one policy, one system [AT&T's] and universal service, no collection of separate companies could give the public the service that [the] Bell... system could give.""

https://en.wikipedia.org/wiki/Kingsbury_Commitment

telecom monopolies are government enshrined

Telecom monopolies are not by government intent by rather by regulatory capture.

As a capitalist, I hella want to exclude others from the market. If I can get the government to do this for me, then I'm willing to pay the lobbyist fees to make that happen. In the IP space the only reason I'm willing to slave away at invention is the possibility of a patent, a right to exclude, a limited monopoly.

As a capitalist, the absolute last thing I want is a free market. Thiel puts it this way: competition is for losers.

On the one hand, patents give companies a reward for innovation and result in them doing research they might not have otherwise done.

On the other hand, software patents.

"Keep it in check"

By allowing it to willfully break laws in dozens of countries, contributing to lowering standards of living and high stress at work, tracking users at all times, having a hostile workplace, then becoming the most important provider of such services in the world?

Yeah, that's totally capitalism doing its work, and not the painfully obvious "throw VC money at it until it works" scheme, right

Lowering standards of living? Lolwhat?

As a previous comment pointed out, Uber created a consumer surplus of almost $7 billion in 2015 alone.

Capitalism didn't force Kalanick to resign.

Well, technically it did. Investors, i.e. the capital, pressured him out.

capitalism -- an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.

So you are saying that the investors, i.e. the capital, pressured Kalanick out for reasons of profit rather than due to pressure by the state in the form of multiple lawsuits. You are mistaken.

In particular, there is no evidence that Uber's naughty bro culture is any less profitable than a mature egalitarian culture. Lack of profit wasn't why Kalanick was shown the door.

I would imagine they've seen a revenue decline from all the bad press. Furthermore, there's no way he wasn't directly involved in the Otto lawsuit, which isn't the governments doing.

According to recent reporting in Bloomberg, there was a temporary dip in market share due to the #deleteuber campaign, which has since recovered. Both companies have grown considerably over that time period. Lyft's ridesharing growth in the U.S. has been much higher than Uber's.

The Waymo lawsuit is still very much up in the air. Kalanick's involvement is already public: he collaborated with Levandowski to acquire a team of self-driving-car engineers and their work over 8 months. The key demands of the Waymo legal team were rejected in their injunction. Judge Alsop did not see a clear nexus between the Waymo designs and the Uber lidar, referring the matter to trial.

>According to recent reporting in Bloomberg, there was a temporary dip in market share due to the #deleteuber campaign, which has since recovered.

Based on what? Uber isn't public, they aren't forced to release any information on their ride sharing, and what info they do release isn't subjected to any real verification.

The only article I see is based on "number of app downloads" - that has literally no relevance in the number of rides they're servicing. I've got Uber on my phone and I haven't used it in 3 months and I don't see that changing anytime soon. They didn't lose me outright as a user, but they, for all intents and purposes, lost my business.

The article had some numbers leaked from Uber. It should surprise you when some information isn't public these days, considering the volume of leaks from that company.

I think you're conflating the issue. When Capitalism is practiced you can still have laws... The industry is still controlled by private owners.

I'm actually separating the issues rather than conflating them.

Capitalism by itself looks at profit. In the United States capitalism is held in check by a legal+political+free speech system. A company (Uber) is not held in check by more capitalism; it is not held in check by competition. As an aside, this breaks down with regulatory capture.

When VW cheated on its emissions testing it was not checked by a more efficient and competitive Tesla. It was held to account by a legal system external of capitalism.

> It was held to account by a legal system external of capitalism.

And Travis was not held accountable by a legal system - his investors (i.e. capital) asked him to step down.

I think we're all saying the same thing, it's just your conclusion is incorrect.

We are not saying the same thing. His investors asked him to step down for a reason and that reason was not profit or rather lack thereof; they've had ample profit reason to fire him for years. The reason the Uber board asked him to leave was not a capitalist reason.

> His investors asked him to step down for a reason

Which reason would that be? Which reason is there for a investor to ask a CEO to step other than to protect his/her investment?

I'm not sure why you seem to deny the possibility that capitalists are concerned with future profits as well as past ones. You say their reason was not lack of profit, based I guess on the fact that they haven't suffered any major setback beyond their normal lack of profitability in the past couple of quarters. That's an oddly restrictive definition.

Capitalism is about future profits, by definition. I can't invest money in Apple in 1997. I have to invest it today, and my only concern is what happens after that investment. The Uber boarding kicking him out is entirely a capitalist reason. They've invested money, and his presence will (they believe at least) negatively affect the return on that investment going forward.

It's just a blatant fact that Kalanick wasn't axed because of his inability to turn a profit. That card has been left on the table for quite some time by board inertia in the vain hope that this unicorn would grow wings. Instead, Uber lost $2.8B last year. That isn't rational.

Your only concern may be what happens after an investment but you'd be foolhardy not to take past performance into account. Undervalued (Apple in 1997, return of Steve) is one thing. Throwing good money after bad is another.

$2.8B is just a ton of money to lose and for a startup it's insane (thinking of Amazon but Uber's losses dwarf Amazon's early losses). Frankly, I think the board is using this as an excuse to do now what they should have done a couple of years back. Boards are human. They aren't homo economicus incarnate. Ascribing rationality to the outcome of a board meeting because capitalism makes no sense. Really, they lost $2.8B last year.

> It's just a blatant fact that Kalanick wasn't axed because of his inability to turn a profit.

No one is suggesting that. When people say "this is capitalist of the board to do" they're talking about the individual board member profiting from a successful exit. Put more simply - investor puts $1 in Uber on day 0 and expects to make $100 on day 1,000 and makes a $99 profit. They're axing TK because they want to make their $99 return on investment.

I have not been keeping up with the news surrounding Kalanick or Uber, so this is an honest questions.

Did the courts say that Kalanick is barred from being the CEO of Uber? Or, is it the case that Kalanick's actions have put Uber at risk fines and further litagation?

My (admittedly uninformed) take on the situation is that Uber's investors weighed the costs and benefits and determined that Kalanick needed to go. While the regulatory environment probably influenced the decision, it wasn't the government calling the shots.

Capitalism did indeed force Kalanick to resign.

You're catching a lot of flak for this, but as long as there is diverse competition, you're right. I used to bounce back and forth between Uber and Lyft based purely on price, but now I almost exclusively use Lyft because I'm not a fan of some of Uber's practices.

Societal norms forced him to resign. In other parts of this world with more patriarchal and authoritarian governments the leadership style might have been accepted.

Uber is the largest in the US, not across the world. Didi provides way more rides than Uber any single day.

Kind of unfair to compare Didi (or any Chinese company) with the free market alternatives. If you're given state sponsorship from one of the largest countries, then you should easily be able to do more rides than Uber.

There's also Per Capita to consider. Obviously an anything in China will have more actual humans using it - there's a billion of them there.

I don't think that UberChina's failure to win against Didi was due to state sponsorship. Didi had a better product tailored to the Chinese market, better operations people who conducted local campaigns in more cities, and only one market to compete in, as opposed to Uber's worldwide competition.

It was apparent that Didi had achieved the network effects necessary to overcome Uber in volume. Both companies wanted to focus on revenue so it was savvy of Didi to purchase UberChina so they could reduce ride subsidies.

I think that the success of UberChina, along with Yum! and Wal-Mart, demonstrate that it is possible to prevail in the difficult Chinese market.

> a better product tailored to the Chinese market

What were the differences?

According to HN commenters in China, Didi understood that government employees needed a standard voucher so Didi made its generation automatic in the app. UberChina apparently never did.

It was used as an example to illustrate that Didi did the little things that remove friction for its customers. Didi also recruited drivers in smaller cities; its coverage was superior to UberChina's.

and MUJI, also very successful in China

I think there's a case to be made that the tax policies that apply to investor organizations and participants qualifies as a form of state sponsorship.

Do they nearly guarantee people will buy the app despite foreign competition? This sort of thing happens in China more than over here. U.S. consumers use or buy products from many places with significant percentage coming from China at some point. Something just being American sponsored doesn't usually cut it.

I found it hard to find good numbers, so hopefully this research will be of use to other people:

Yesterday, Uber co-founder Garrett Camp wrote "Uber has become a global service providing roughly 15 million rides per day across 500 cities" at https://medium.com/@gc/ubers-path-forward-b59ec9bd4ef6

The most recent estimate I could find on Didi Chuxing is 20 million rides per day as of October, 2016 as stated at https://www.techinasia.com/china-didi-chuxing-20-million-dai...

It's reasonable to assume that Didi has noticeably grown since October 2016, but none of these numbers are easily verifiable externally to these companies.

(Lyft's market share is unclear to me, but perhaps 2 million rides per day, more or less?)

Well, largest by revenue :-)

Aside: is there anything to be said for doing well in lots of countries vs a monopoly in one?

It seems to me that to be successful in certain countries requires skills that don't translate internationally - for example, understanding the quirks of one big country, or negotiating the political situation.

The same pushy, aggressive culture that made their some of their employees' lives awful also made it possible to get excellent service that reduces tons of drunk driving and generally improves people's lives.

I really don't think they could've broke into the market by asking politely; it took some fire in the belly. However, the side effects are pretty devastating as well.

> The same pushy, aggressive culture that made their some of their employees' lives awful also made it possible to get excellent service that reduces tons of drunk driving and generally improves people's lives.

So you're basically saying that stuff like treating women like shit was NECESSARY to provide a good "taxi" service?

Not caring about what other people think is necessary for doing pioneering work.

That's completely wrong headed. What people think is entirely the reason that something is "pioneering" or not. How businesses comport themselves and treat their various constituencies is part and parcel of their ongoing success.

"i have to be an asshole to succeed!" - people who are assholes who are making excuses for themselves.

The sexism isn't the only problem within the company. It's the easiest to criticize, because it's obvious how stupid and absurd it is--and how there is no excusing it, but I Uber has done a bunch of other things that reflect this same mindset.

Necessary is a loaded word....

None the less, let's not pretend yellow cab other taxi livery companies never mistreated any of their employees (male, female, lgbtq, etc.)

Mistreatment is not an uber only specialty.

How does that excuse how Uber acted in any way?

It's not excusing it. Just putting things into perspective. As bad as Uber might be, they might be less bad than the alternative. In those terms, one may not want to champion the legacy system as better.

Users got a better experience from Uber, but it's not clear it was at the expense of the service side of the population being treated worse than they were treated by the incumbents, therefore all other things being equal Uber would still be a net positive.

> As bad as Uber might be, they might be less bad than the alternative. In those terms, one may not want to champion the legacy system as better.

The alternative isn't the legacy system, which nobody's saying is better. The alternative is an Uber with decency (even if still bold to break into regulated markets). Or an Uber competitor.

> stuff like treating women like shit was NECESSARY to provide a good "taxi" service?

No, but its possible they were two facets of the same quality. While the aggressive, see-what-we-can-get-away-with attitude is useful (and probably necessary) in fighting the entrenched local monopolists who have local government protecting their vested interests, it turns out to be a serious liability with respect to workplace norms and stealing of trade secrets.

im not here to scold you, but this comment is kind of revealing. it shows a need to explain a bad thing by saying that a good thing caused it. while i wont deal with the substance of the argument (which i personally reject), its my experience that this argument's format shows up an awful lot when there is a bias that someone has to bend reality to preserve.

its also revealing that you would even bother entertaining this idea. why not just say "yea. they shouldn't do that."? im pretty sure there are companies that have "disrupted" industries that were not filled with toxic culture.

> im not here to scold you, but ...

In other words you're here to scold me.

> it shows a need to explain a bad thing by saying that a good thing caused it.

It does no such thing. It explains the nuance of someone else's argument which I thought was being misconstrued. That is, a thing can have positive and negative aspects.

> while i wont deal with the substance of the argument (which i personally reject), its my experience that this argument's format shows up an awful lot when there is a bias that someone has to bend reality to preserve.

Huh? That is to say "I will ignore your argument (but dismiss it) and jump ahead and make value judgements about your motivation and biases."

> its also revealing that you would even bother entertaining this idea. why not just say "yea. they shouldn't do that."? im pretty sure there are companies that have "disrupted" industries that were not filled with toxic culture.

What I find revealing (and amusing) is that you admit you are ignoring the plain meaning of my post, but prefer to look for thoughtcrimes in the subtext.

i mean, your not wrong to get annoyed at someone for kind of guessing whats going on in your head. it just struck me as odd that someone would even bother to make the point at all.

Necessary is the wrong way to look at it, it was a consequence of the growth above all strategy.

They broke into markets with disregard for the law, often it backfired, often it didn't.

Allegedly(as it is being investigated) they also "stole" IP from Alphabet in an attempt to get ahead in the self-driving gold rush.

They repeatedly ignored several sexual harassment reports in order to protect someone who they referred to as a "high performer", in the name of growth, they could not afford to lose a high performer.

In the startup/VC/unicorn hype world growth is king, it comes before profit, revenue, employee wellbeing, customer satisfaction, business and work ethics.

Uber is not the first guilty of this, it's just the extreme case.

Cornelius Vanderbilt got his start by breaking a monopoly given to ??? to offer ferry service between New York and New Jersey underbidding holder of the monopoly. He broke the law to do it and was sued. It actually was judged by the Supreme Court and the monopoly was thrown out because of Interstate Commerce (I think it decided this entire area of law, IIRC).

There are many entrenched, incumbent interests that try to make money not through healthy wealth creation but by trying to appropriate wealth through politics (e.g., granted monopolies) which to some degree the taxi industry was.

Uber and its competitors did a great service to many people and ultimately really angered monopolistic incumbents.

if that's the case, you'd have to protest lots of start ups and companies in silicon valley. There's no shortage of toxic workplaces.

I think it's a good think to break down monopolies and open up competition.

> if that's the case, you'd have to protest lots of start ups and companies in silicon valley. There's no shortage of toxic workplaces.

What's even the point here? You're aware that no one has to protest a company they don't know or use. And that "you can't protest one if you don't protest all of them" is a fallacy.

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