Uber Posts $5.2B Loss and Slowest Ever Growth Rate
nytimes.com
nytimes.com
For now they delay this reality by subsidizing rides in order to generate business. In some cities like San Francisco, most incentives were removed and among my friends we all stopped using Uber (unless we really have to). It simply became way too expensive.
(Comment that I already issued yesterday on a similar thread)
I will say though, the huge benefit now is their rewards have a "price protection" [1] for some tiers that allow for a cap on that ride price, so I think it can no longer go above $10.99 or something. That has helped a ton from it getting higher. But that's only available for some of the higher tiers in their rewards program, I believe.
[1] https://help.uber.com/riders/article/price-protection-on-a-r...
Also, as I mentioned in another comment, it's just rides to work in the morning. I take public transportation home after work.
I keep track of all my numbers. For the 86 months I had my last car, I paid an average of $236/mo.
This includes purchase price (subtracting out the amount I sold it for). Insurance. Taxes/fees. Gas. Auto insurance. Repairs and maintenance. Silly things like car washes.
Of course, I didn't buy a brand new car, or even a recent car. And bought a reliable brand so repairs were low. My insurance was not just liability. All apartments I lived in had parking, as did my work. The types of apartments that have expensive parking are the type that have high rents anyway, so I save in both by not living there.
Excluded is the gas for road trips, but I think that's fair as I doubt you used Lyft/Uber for road trips.
So for less than what you're paying a month, I got to have a car, and got to drive anywhere I wanted to - not just work.
It's quite affordable starting at ~$350/mo, so I am curious to see how people will accept it.
I'm not sure whether you're referring to driving under the influence or merely about parking. If the latter: In most cities in the US, these are mostly non-issues. So I disagree with your use of "most". Although I've used Lyft in the last few years for various reasons, only once did I use it because I was worried about not finding parking. For other occasions, I used public transit. But seriously - probably less than once a year do I need to find alternate transportation because I'm worried about parking.
(BTW, I forgot to add parking to the above estimate. I spent on average $6.03 a month on it).
... for someone living in a bubble completely disconnected from the planet Earth, where they think that a $400/mo parking spot is 'normal'.
Sure, there's a few million people like you out there. Not enough to make Uber break even, though.
It's great that you get free parking, but have you considered that you're living in a bubble too? 6 out of 7 people globally don't even own cars!
But I'm also a wealthy techie who happens to live within spitting distance of a booming downtown. 90% of the people living in my metro area (Seattle) do not pay $150/month for parking (And I'd wager that 99.9% do not pay $400/month for parking).
... And most of those people have commutes of >4 miles. The problem with taxis is that you pay by the mile. You'd be an idiot to drive yourself to work, if you live 2 miles from work, and have to pay through the nose for parking. You'd be an idiot not to drive yourself to work, if you live 15 miles from work, your bus system sucks, and your parking is cheap or free. [1]
Doing 15 miles/day in a taxi costs nearly 3x that of doing 5 miles/day in a taxi. Doing 15 miles/day in a car is pocket change, compared to doing 5 miles/day in a car (Or 0 miles/day). Most of your costs with a car are fixed. Most of your costs with a taxi are distance-based.
[1] And if we're going to get into a discussion about how the world should value the cost of parking spaces, I will happily point out that what we should have is good bus services, not private chauffeurs.
A lot, but typically not most - I drive about 12k km per year (16 km commute 2-3 days per week) and over the past six years my fixed costs have been around $7k. My variable costs have averaged $0.26/km for about $16k total. (All CAD)
You can see my numbers here for my Civic.
https://news.ycombinator.com/item?id=20650989
Mine was 8 years old when I bought it, but with low miles (about 60K). So I paid a bit of a premium - almost as much as the 2014 Civic on that page. I kept it till it was at 144K miles. Effective cost to own was under $300/mo.
Comparing the 2014 numbers with mine:
Insurance is almost the same.
Repairs + Maintenance was less than a third of their estimate. I didn't skimp at all on this, BTW. I'd be worried if a 5 year old Civic has that many repairs!
No financing - paid in cash. Even the 2014 one is a little over $10K. You can just save and pay cash.
Their estimate requires a lot more in fuel costs. Mine is about two thirds of their estimate. This can be highly variable (e.g. if you have a long commute).
For example, let's say you bought your car for 10k, then sold it 7.1 years later for 9k. You have 1k of depreciation. You also have $6,300 at 7%(a typical target rate) in lost income from not keeping that money in a productive asset for those years.
In my case it came down to $242/mo vs anywhere from $360 to $480/mo with Uber. It's not clear to me that had I invested the purchase price the 7% return would be enough to make up the difference of $120-240/mo. Certainly not in the first year. I'd have to do the math to see when the breakeven point would be where that initial investment is yielding more than the extra cost of using Uber.
There's also the fact that 7% is the market's return, which is over a 30 year span. On a 10 year span, the rate of return is highly volatile, and could even be negative (on the flip side, could be a lot more than 7%).
I just ran the numbers, BTW. With my purchase price, invested at 7%, I break even after 7 years (just about the time I owned it) - assuming Uber is the upper bound of $480/mo. At the $360/mo cost I'd break even after 3-4 years.
I didn't take into account the sale price, so that would make the breakeven point a little farther.
Getting out of fidi at 5pm can sometimes be slow w/ pool (20+ min wait), especially if the driver gets stuck in traffic e.g. on bush leading to market because of some rando accident on 101. Taking an uber at any other time or location has mostly been fine for me (5 min wait times tops), and it's not that uncommon to have 5 min wait times even out of fidi at 5pm.
Then it was changed to $5. Then it was changed to $6, or instead you could UberPool for $2. Then they added a 2 minute waiting period for an UberPool. They then also changed the flat fare altogether and instead your ride pass came with something like 50% off all rides, with a maximum $6 discount.
It's obvious what would happen. At least my friends and I got it while the getting was good.
By charging $4.00 more than the cost, you’re freeing yourself up to do other things during that time. Is your time really not worth $4.00?
I took a Lyft a month ago during peak times and it was $40, so it's still significantly cheaper for me.
The blitzscaling strategy might in fact work but it would effectively be an end to democracy. We would basically have a marketplace of ALL monopolies.
It just doesn't scale.
What's been the alternative? Regular taxis? Aren't they just as expensive?
To answer your question: I bike, use my car or use electrical scooters. I still use Uber but when I really have to (maybe once every two weeks)
If I go somewhere where it's a pain to park occasionally I will use Uber instead.
Similarly, if I go out I could make a choice of being very conscientious about how much I drink (and thus drive) or take an uber and not worry about being too buzzed.
My issue was always summoning the taxi. I was generally operating in secondary markets like Las Vegas off-strip, San Diego, or Pittsburgh. You couldn't schedule your trip to the airport because you never knew when the stupid taxi would show up.
While I hate many things about Uber/Lyft/ridesharing, they changed the customer service expectation of the whole field. Even if the prices go back to taxi levels, that's a massive improvement.
I think you are confusing "monopoly" and "barrier to entry". "Monopoly" would imply some state where every person using your system makes it harder on your competitors. If, however, your system needs to reach a minimum level to be useful, but doesn't have a feedback loop above that--you have a "barrier to entry"-a fixed cost that must be paid on entry to the space, but doesn't automatically get bigger when your competitor adds customers.
AirBnB doesn't really have a monopoly but they do have a barrier to entry--they perpetuate mostly by continuing to turn a blind eye to the violations of law. If someone stood up a site and used VC money to reimburse listers in New York and San Francisco, AirBnB would lose most of their revenue and you'd have an Uber/Lyft duality. The barrier to entry is that they are already in the space and there doesn't seem to be enough money floating in the space once laws start getting actually enforced for VC's to be willing to throw money into the ring.
Uber and Lyft also have a barrier to entry--a network of drivers. I can pop open the Uber application and know that there is probably a driver within 5-10 minutes of me. Nobody other than Uber or Lyft has that coverage so I'm not going to use another service. Could someone else build that network? Yes, they could--that's a fixed cost that must be surmounted, but once on the other side of that cost adding more drivers or riders doesn't really have an effect that makes it harder on your competitors.
You will note that I picked a specific use case: going to the airport.
For anyone who flies (and lots of people fly for one off events--so you aren't automatically "well-off" just because you have a plane ticket), transportation to the airport is particularly painful because you have a fixed time deadline.
Most of the options really suck--ridesharing is actually the most cost effective of the bunch.
If you take your own car, you have expensive parking and get the joy of the shuttle from long-term parking (often longer than a ridesharing ride). If you order a shuttle, it will be slow and have multiple people and tends not to be well time controlled. If you call a taxi, it may not show up as you don't have tracking or the ability to penalize them. Limos work well but are ferociously expensive if you can't split the cost.
There's also (gasp) public transit (and bike share).
Only until Uber and Lyft run out of cash (a few more quarters based on cash on hand), at which point taxi fares will rise to properly reflect the actual cost of the service.
People will choose a combination of walking, public transit, traditional cab companies, and perhaps an e-scooter and/or bicycle. We lived before Uber and Lyft, we'll live after them. Fun experiment while it lasted.
It is not an understatement to say that I hate traditional taxis. I hate the terrible service. I hate having them refuse fares based on where I'm going. I hate calling to schedule a pickup in advance and the driver just not bothering to show up. I hate being pressured to pay in cash instead of credit card and having them berate and insult me when I insist on card. I hate having to be on alert to see if they're taking a deliberately longer route or running up the meter. I hate the verbal and sexual harassment they have doled out to me and my friends with no consequences, because there is absolutely nothing in their business model that provides them any incentive to treat their customers with courtesy and respect.
I want to see taxis crash and burn, I want to see them fail, I want to see them removed from my experience on this earth. I don't think I'm alone in that, and I will continue to use Uber and Lyft and pay far more than taxis because they provide an exceptionally better service.
Also Uber Pool/Lyft Line are brilliant and taxis will never bother to replicate that kind of efficiency.
- Accusations of racism
- Dangerous driving
- Detours/no idea where they're going
- Being held hostage (took 4 very strong demands to be let out)
- Given a lecture because the driver couldn't find the address and told if you don't like the service to get out.
The grass isn't always greener
I have a bad experience maybe 10% of the time I take a rideshare, with taxis it's more like 75%. That does mean bad experiences will continue to happen either way, but I still favour the former and will pay more for it. Plus ridesharing still has the benefit of pooling, knowing costs up front, paying through cards without harassment, having the company keep a detailed record of your pickup/dropoff and route so reports of issues can be substantiated, quickly rescheduling if a driver fails to show (plus a map to see when a driver is not on route), etc. I think it's a clear win - at worst they share some of the problems taxis have, but taxis share none of the benefits that rideshares have.
We take taxis quite seriously in England. They are granted licences from the local government (the council). They are overseen by Licensing Officers.
I've only reported a taxi driver once (I can't recall exactly what for, but it wasn't anything too egregious), but it seemed like a swift and thorough investigation. They quicky summoned the driver to their office to explain himself and then gave me a report on the matter.
Customer input seemed to be taken quite seriously.
However, it seems the licensing framework does seem centred around drivers' criminal convictions, so the police would have to be involved in serious matters.
The cat is out of the bag. Nobody is going back to taxis.
Baloney. The market size of people willing to pay taxi rates for transportation is much smaller that the market sizes currently implied by Uber and Lyft's valuation. Before Uber and Lyft, most people I know would only take taxis very occasionally, for special occasions or emergencies. Once Uber and Lyft started offering such good rates they would use ride sharing much more often.
Consider all the places where you needed a taxi but wouldnt know how to hail one -- Uber/Lyft expanded the market here.
I was recently in Taiwan and needed a ride, but could not describe the address to a driver who did not speak English. Uber to the rescue -- again the market got expanded.
It isnt all about cost.
Not having to deal with (local) cash or a constantly “broken” credit card machine are also pluses.
Then you may require the actual receipt for your expense. Sometimes the Corp wants more than a credit card invoice for their accounting.
The only place I've seen acceptance be a problem is San Francisco (although I've certainly heard it's a problem in other American cities). I can't speak to other cities but in San Francisco the cabbies are required to pay pretty hefty fees for credit card usage. But Uber and Lyft take a big chunk of the pie and leave no cash option so there's that.
I've been to a couple cities where credit cards were not accepted as a general rule (cabbies didn't even have the equipment). But in cities where I've used a card I've asked and generally been told they'd never do anything that ridiculous. Of course I typically have a strong preference for public transit so cab rides are the exception rather than the rule for me.
As for accounting, merchants already get a category assigned to them by their credit card processor. Generally there's enough specificity that something like a few cab rides shouldn't need much more clarification (although receipts may be required if you cross a threshold or exhibit some suspicious pattern).
Now Uber and Lyft has made it harder to embezzle from my job :(
The only time I've been in a situation where I needed to take a taxi but didn't speak a common language was in Paris. I simply showed the driver the address as written and he got us there with no problems whatsoever. Granted Paris is pretty easy that way as rides (both taxi and Uber) from the airport are fixed price.
Alternatively I bet just pulling up the location on a mapping app would be enough. Of course in most countries I've been to, the public transit infrastructure was good enough that I never wanted to bother with a taxi of any sort.
Kinda sucks to see as I think the idea of the service is good.
Not sure if I agree. The convenience of the Uber/Lyft app's is still superior to a taxi service in most cases. The only time I'll take a cab is if it happens to be right in front of me and I'm in a hurry.
Virtually all of the cab companies still around now have mobile apps and many of them have all the features that Uber/Lyft have (card payment via app, car-tracking, etc).
It's still a win for the consumer, even if you're using old school cab companies.
However, I also have to acknowledge that I think I'm an outlier, because I have many friends (most of whom could easily afford it) who complain about prices every time this topic comes up. I think that as a society we'd be better off if people could truly internalize the truth of "you get what you pay for," and stop buying solely based on price, but that's not the world we live in.
(1) BMW and Daimler will invest $1B in their new joint venture (https://www.your-now.com/) that brings their mobility services under one roof.
As for a ~30 second call resulting in a success story, that does sound pretty good indeed.
Let me tell you what my decades of taxi ordering experience in Estonia looks like. I call a taxi company [1], wait about a minute, nobody even picks up the phone. I try another company. I finally get someone to pick up, I tell them where I am, and they proceed to tell me that they have no taxis available. I have to call a new company. Eventually when the 5th company promises to send a taxi, there's a greater than 10% chance that they never show up. Sometimes I call the taxi company and they say the driver went on a break. Other times they say the driver picked up someone else on the way to my location. Sometimes the company has no clue whatsoever why the taxi didn't arrive.
With this old system, whenever I was in a rush, the most time-optimal plan was to run to the closest taxi stop and physically find a taxi.
The arrival of Uber & friends has mostly removed this nonsense. It's all so much more reliable. Although not 100%, sometimes when I'm ordering from a suburb, the driver will call me and ask if I'm willing to pay extra in cash for them to come out. If I say no, they cancel the order.
--
[1] All these calls are to reasonably priced taxi companies, similar to Uber pricing. If I were willing to pay 3x price, there are plenty of premium taxi companies who will come and roll out the red carpet in exchange for your wallet.
I don't mind cash but I rarely have it on me.
Even if rates went up to what cabs were (still cheaper in SF in my experience), I wouldn't switch back to cabs. I'd still user Uber/Lyft for the convenience and higher quality product.
Are those stories very uncommon, or does the cab market in SF etc. manage to be even less quality?
Round here, a cab is at worst an 8 year old Toyota Prius, at best a new Mercedes or a Tesla, and the cab companies all have apps that let you book rides and see where the car picking you up is right now.
Not spending billions a year on R&D certainly makes the financials look nicer. It might not attract as nice of a multiple, but it's not the ride prices that are out of whack at Uber IMO.
Cost of revenue $1.68bn
Operations and support $434mn
Sales and marketing $1.04bn
Research and development $409mn
General and administrative $423mnHow complicated needs to be an IT infrastructure that lets you book a taxi via an app and pay the driver? Is it really something to throw billions at each year? Sometimes I feel these companies are throwing billions in IT simply because they're expected to be disruptive technology companies, and not for real technical reasons.
Essentially they seem to be repeating whatever Google and Facebook are doing: but those are pure technology companies that serve two orders of magnitude more customers and have contributed building the web as we know it. Uber is a taxi company.
Also because when Uber was young, it was not motivated to seek profits or consider expenses, it was just growth at any cost. Once that work culture is established, it can be hard to shake.
They use this data to update their surge pricing by the minute for all these different geofences all over the world... yeah, I think having the self image of a technology company that wanted to attract the best talent definitely created a lot of expensive problems for itself.
You can read here on HN how their large IT staff spends most of its time migrating back and forth between MySQL and Postgres.
Ride sharing is extremely local, so it's not like you need any cleverly scalable tech. Most places will be tracking a few hundred cars at any given moment. Only in very large cities like NYC would you need to spend a little more on big servers.
What Uber presumably does is collect and analyze a lot of real-time data, which isn't strictly necessary to provide the service they're providing.
I mean, is there a chance these three companies develope autonomous vehicles and decide NOT to compete in ride sharing?
Frankly, the R&D spend is the least of their worries. They recently trimmed some fat from their marketing department[1] but the subsidized rides problem continues to be the biggest issue they face financially.
[1]: https://www.nytimes.com/2019/07/29/technology/uber-job-cuts....
Try hailing a cab in Thailand, Indonesia or Malaysia. They will ask your destination and quote you 5-10x meter fare. Use a ride hailing app and you get approximately the meter fare.
Uber is not a tech company. It’s a taxi-company with a fancy app.
There’s literally no reason their operating expenses should be this big.
Also Uber as a company has zero experience of owning and maintaining a fleet of vehicles. They’ve entirely sidestepped that problem. What evidence is there they can do it better than anyone who does do it, like say Hertz?
The vehicles get told to go from point A to point B and does safely and effectively. Uber still plays the role of interacting with the customers, "booking" a car for them, collecting payments, etc.
Autonomous vehicles will never work in the chaos of Delhi or Jakarta's traffic
I sincerely hope they weren't expecting any revenue from those for the next decade or two. Anything else would be delusional.
I personally agree it's a multi-decade (if ever) thing, but if Uber et al. claim they'll have it in 2 years, without facts on the table it boils down to who the investors believe in.
I took my first Uber in 2011. It was amazing. Expensive, to be sure, but the service was amazing. Black Sedan, extremely professional, shows up wherever you want, drops you off wherever you want, never really had to look at GPS. Just amazing.
It was so good I figured I'd never need car again. But it was expensive, so I used it sparingly. I'd take public transit or walk most of the time, but when I needed to get somewhere that didn't go or I needed to get somewhere fast, Uber was there.
Now it's a joke. A total joke. The service is shit. The base tier has people picking you up in minivans that rattle like they are about to fall apart and the people can barely drive… if they pick you up at all. There's like a 50/50 chance it will take 15 minutes for a pickup because the driver will go in the completely wrong direction and then cancel the ride. The "premium" service tiers come with fancier cars, but most driver still have no idea where they are going.
It was good when it was small. It was good when they only had professional drivers with carrier passenger permits and commercial insurance. It made sense. It was good for everyone. It was good when they actually had "drivers", not random people struggling to make minimum wage.
I also try to avoid it.
There are also still plenty of black car services around if you are concerned about loss of quality in more affordable offerings (where did you think the tradeoff was going to be for a more affordable solution? Purely scale?)
I didn't think there was going to be a tradeoff. There was never supposed to be. The idea that random people would drive others around was never part of Uber's business plan, that's why it was called "Uber" to begin with. It was never part of anyone's business plan—it was illegal.
Lyft came along and just started hiring random people with no passenger carrier permit and no insurance, and then Uber had to compete with that nonsense and that nonsense somehow just became legal because "it's an app" was a valid defense and the CPUC went along with it because it became too big to ignore or outright ban.
> It's just a random guy with a more expensive car.
The big one is they are required to be commercially registered and commercially insured. At least here in Chicago it's usually the private chauffeur's with a livery license plate in sedan/limo. I'm guessing they do Uber black on the side.
Anyway, yes they are "just random guys" just like any other Uber driver but they've had to jump through extra hoops which affects who does it. I'm not saying that causes a better selection but there is specific difference between the two, other than just requiring a better car.
The line item in Uber's results you want to look at here is "Excess Driver Incentives" which covers:
"Cumulative payments to a Driver could exceed cumulative revenue from a Driver as a result of Driver incentives or when the amount paid to a Driver for a Trip exceeds the fare charged to the consumer."
What's really interesting here is that year over year this number went down substantially ($21m total) for their "Ridesharing" eg their core platform is subsidizing substantially fewer rides today as a percentage of overall revenue than it was a year ago.
But that total "Excess Driver Incentives" line item exploded upwards from $221,000,000 to $544,000,000 for just their uber eats platform!
That means that your rides were somewhat subsidized and getting better, but your hamburger's ride was subsidized to the tune of a half billion dollars :)
And further qualifying this the Uber Eats business unit doubled in revenue but the incentives grew at an even faster rate.
https://investor.uber.com/news-events/news/press-release-det...
This is particularly important for industries with large network effects like ridesharing.
ie, core business prints money.
I like to compare them to the car sharing companies (like zipcar/car2go etc...) which managed to de-throne the entrenched rental agencies without going out of their way to break laws.
What regulations are these? Is there any case where taking taxis was or is safer for an average customer than Uber?
That certainly doesn't stop them from speeding, cutting you off, going straight from right turn lanes and generally driving very aggresively. Cab drivers are really one of the worst when it comes to following traffic rules, second only to urban bicyclists.
E.g., UK https://www.gov.uk/taxi-driver-licence/outside-london; Germany https://de.wikipedia.org/wiki/F%C3%BChrerschein_zur_Fahrgast...
At least in Germany, my standard way of getting a cab (wherever I want) was calling one of the dispatch centres.
Taxi-hailing apps made this slightly more convenient, and displaying the cab's route to you removed some stress, but it didn't fundamentally alter the service.
And Uber really doesn't add any value except for undercutting prices by subsidising the rides via investors and shovelling risk etc. onto the drivers.
I think about 99.9% of my taxi use has been call-ahead, often a day before ("I need a cab to the airport at 9am tomorrow").
After making my request, a few cab companies simply answered "Ok" before hanging up. I called them back to get an ETA, and their dispatchers would give me answers like "30 to 40 minutes" or "I don't know".
I wasn't out in the boonies or anything. I was downtown.
Chicago did not have this, and when Uber offered UberTaxi it really was the best of both worlds, for a small surcharge on the normal cab fare.
I used a small family taxi company. I had to book in advance, or be prepared for a short wait, but they understood my father in law needed some extra time and understood his requirements. Ubers on the other hand are awful with disabled people in my experience.
Cab companies refusal to acknowledge this means they deserve to die. The economics are there, an app is undeniably cheaper, at some point, than a call center, and fundamentally whatever prices Americans pay to cab companies is clearly enough to sustain them, so it should in theory be enough to sustain an Uber-like company.
And let's not even get into the conversation about servicing more rural areas, where ZERO cab companies exist, but Uber drivers do. That is a net value add to those communities, no denying.
Uber solves that.
I live in Queens in a great neighborhood and cabs have "forgot" how to get here more than once. They don't like it because they have a lower chance of a return fare.
Luckily the excellent public transport makes up for it. But there are still many scenarios where Uber is a welcome addition.
The drivers were always nice and friendly. Their vehicles were clean. They arrived on time and got me to work when otherwise I would have been biking or walking for hours.
Those guys earn their money. I tipped them well. I wouldn't Uber to work forever because it is costly, but I absolutely loved ubering while my car was in the shop.
A 10 min drive can easily cost you $40 - and lots of people do take the taxi when going out / downtown during weekends. Even more so when they're heading back home.
We do have public transportation, like night busses that drive every 30 / 60 mins, and through the most populated routes.
But still, we do have pirate / illegal taxis. Basically young adults that will drive you wherever for half the price what a taxi would take.
But yeah, it feels that we simply use taxis a lot less over here. It's mostly traveling people, older folks that aren't mobile enough, and similar.. and of course the hordes of people going to and from downtown during weekends.
People are very good at using public transportation.
Except for the fact that Avis bought Zipcar. So not sure about the dethroning part.
I know some folks who really depend on short-term rentals to support being carless but it's a relatively niche service--especially with current Uber/Lyft pricing.
Before Uber, taxi medallions in New York were selling for around $1 million. These pricey medallions tended to get bought up by large companies that could afford the investment. Your driver likely couldn't afford one, so instead, drivers would rent a cab and medallion for about $100 per 12-hour shift, on top of the dispatcher fees.
This system was supposed to restrict the supply of cabs to ensure drivers earned a decent wage. Instead, all the value is extracted by the medallion holders.
Still, that doesn't mean rainbows come out of Uber's bum - it was absolutely a market ripe for new competition, Uber just added that competition in a terrible manner.
Where gig economy = padding the loss of decent jobs by replacing the bottom end with desperate deals where "non employed" employees, without regular salary, benefits, company provided work tools, etc., make a pittance, while the organizing company gets a cut from millions of transactions.
In some cases, no jobs is better than subsistence/dead-end/exploitative jobs. At least the former makes the problem evident, and ups the pressure to do something about it on a society/policy/economy level -- as opposed to helping perpetuate it.
Sure, but neither you or I get to decide that qualification. Only the person doing the job does. We don't really know what fits their lives or what options they have.
I don't like gig stuff/sharing economy (or the big 'unicorns' associated with it) either...but it is "another option" for many people that wouldn't have one, esp. lower skilled immigrants, minorities, retired and young people.
For vast majority of people, the viewpoint would be that elected leaders making the "correct" decisions/rules (whatever we decide those are) is the actual long-term, proper fix. Technology is technology, it's a tool; and societal norms, rules, and regulations guide or decide how we use those tools.
In the specific case of uber, people benefit hugely from the service over the old way of how taxis worked (I know, I live in a place where ride sharing is illegal.) Uber's drivers can be thought of as exploited, but they're all there willingly, so I don't buy that for the most part. I've met so many drivers doing it parttime, entrepreneurs, students, retirees. They're better off for having options in general. Nobody is putting a gun to their heads.
In the words of Toni Morrison (who recently left us): “When you get these jobs that you have been so brilliantly trained for, just remember that your real job is that if you are free, you need to free somebody else. If you have some power, then your job is to empower somebody else.”
Credit Card and loan rates are two examples where some people would be so desperate that they would sign _anything_ to get an advance of cash or credit. But we have protection for them and rates cannot exceed a certain amount, depending on the type of loan.
The "what about personal responsibility" can be applied to most things society offers you. Law enforcement? Buy your own gun and defend yourself. Firefighters? Buy your own water hose. Exploitive employers? Grow your own backbone.
Those first two aren't similar because I don't volunteer to have crime committed against me or for my house to burn down. People voluntarily drive for Uber.
Most cities have historically not regulated transportation providers where the customer contracts with the provider ahead of time, or they are regulated in a different class and much more leniently than taxis. "Black car" aka livery and limousine services have existed long before Uber, and were not breaking the law in cities where they operated.
Most cities consider taxis to be vehicles that can be hailed by riders at the curb, where the trip is not pre-arranged and the customer has no prior business relationship with the transportation provider. Although Uber now has the ability to book actual taxis in some cities, this is not the category in which Uber historically operated.
Uber was able to grow quickly in part because it tapped into the large established base of private car services. These services existed in cities all over the world, but there was no unified interface to book cars with them. That's the niche that Uber filled. If you talk to many drivers today, they work for these companies (or own their own small company) and use Uber to fill their downtime.
For more information on this, see: "How does Uber overcome taxi medallion regulations?" on Quora: https://www.quora.com/How-does-Uber-overcome-taxi-medallion-...
> Before Uber and ride sharing, not all cars with personal driver for hires were taxis. You also had livery cars (such as limousine or black cabs) and various other systems. In cities that enforce a medallion system, taxis have more rights than livery cars; specifically, they are authorized to respond to street hails, ie to pick a passenger that waves at them from the street. Livery cars only can take a pre-arranged trip. As the number of medallions is limited, the right to take street hails is exclusive to taxis.
> Uber can be used to book taxis in certain markets but the vast majority of Uber trips are not taxi rides. Originally, the Uber service was what is Uber Black today, bringing business to livery cars. The cars were already licensed, insured and authorized to operate. They weren’t allowed to pick up a person on the street (still aren’t) but if a trip was booked to the app, it’s considered pre-arranged. So this didn’t change much from a legal perspective.
A market only works efficient when there is information parity, but a small-time Uber driver can't put a data science team on the job to make sure Uber isn't abusing their information advantage, so in this case i'd only find it fair to require them to do those calculations in a transparent manner.
Like really doing it in Excel, instead of just looking at ballpark estimates and thinking "yeah that's gonna be enough"?
Many people don't think of themselves and their position in life in this fashion and rather have a moralistic view of the world: "If I work a lot, I'll feed my family!" and just assume that is what is going to happen, based on the values they were taught growing up / in school / on tv.
> Many people don't think of themselves and their position in life in this fashion and rather have a moralistic view of the world: "If I work a lot, I'll feed my family!" and just assume that is what is going to happen, based on the values they were taught growing up / in school / on tv.
This is true and unfortunate, but the solution isn't to subsidize this mindset, the solution is to change the values people are taught growing up / in school / on tv. Not because I think it's necessarily bad to hold a moralistic view of the world, but because economics doesn't give a shit and will steamroll any clumsy attempt to provide shelter for the naive.
That Uber is a bad company to drive for isn't exactly a state secret. A bit of research (e.g. a Google search) will point out some problems.
https://www.google.com/search?q=how+much+money+will+i+make+d...
> What is happening to personal responsibility?
It sure as heck is changing a lot when powerful players derive algorithmic insight that allows them to know/predict us better than we can ourselves and our communities, plus three things:
1. we can't keep up as individuals, 2. our governments (the last invention that helped us keep up,) can't keep up, and 3. we haven't evolved current institutions (including companies) to keep up on our behalf.
My money is on co-operatives -- democratic companies: [tech] worker co-ops and #platformcoop
We need things to push back, this time not on authority/power/money (old labour organizing days) so much as push back on capacity to know us and render us easily legible and influenced
Here's a place if you care to explore how tech folks are starting to play with this old-as-the-hills stuff that maybe hasn't been urgent enough up until now: https://community.coops.tech
Carrying a calculator in your pocket even helps make those little decisions at the store easier.
As in, those gains aren't accruing equally. Even among people, tech savvy monetizable upper-middle class people get tech sic'd on their dilemmas first. But between orgs and people, I worry it's an even bigger chasm. It's Piketty's "Capital in the 21st Century" in recursion, where accrual of knowledge capital (specifically about individuals, and their probability space of actions accessible through newfound data streams), not financial capital.
Anyhow, thanks for engaging :)
I’m sure that a lot of people make good money driving for these companies, but I’d bet there are a lot of people who don’t understand what it really costs to drive a car and end up essentially acting as a conduit for money from their car’s value to Uber’s bank account. Uber knows this and does nothing. In any other context, we’d call it a scam. When a scammer is operating, do we have any obligation to stop them, or is “personal responsibility” it?
It would be nice if we could cultivate a similar expectation of corporate responsibility towards workers and customers.
Uber's tactic of attracting drivers with decent pay rates that they knew were unsustainable then slowly chipping away at that over time is sleazy.
You bought a car that was missing a very obscure but very critical peace in its brake assembly, and now it's embedded in another car in the middle of the intersection: Whatever happened to your personal responsibility in making sure that the car was complete?
“For some people it’s better to have no job than a bad job”
(Maybe that’s true but as you say it’s their choice to make)
He is saying:
“For society, it’s actually harmful that we paper over the cracks of giving people on the margins of society confidence in how they can economically contribute and get meaning with unsustainable “jobs” rather than society actually being forced to confront this problem”.
That is what we have regulations for.
Do you know and understand what is in your shampoo bottle? What a car needs to come equipped with, not just in obvious safety features but also in its deeper and detailed implementation, to be safe for normal use ("normal use" itself being something you get taught in driving school)? How to build your own house, or even just how to recognize that a building you enter will not fall down onto your head?
I, for myself, am very glad that regulations allow me to just assume certain ground truths in avoiding negative impact, without having to be an expert in every little thing that touches my life.
The reason they drive for Uber is not a lack of skill. It's because they ran out of money and needed a job. Often having skills doesn't translate into having a good job. Good jobs are a limited resource per area and field.
I guess it’s possible that Uber does so badly financially, they cease to exist. I just find it really hard to imagine that they would be forced to raise prices enough to make the old days of taxis you hailed by waving your hands on the street come back. So to me, Uber doing badly is just bad news for their drivers.
If Uber were to "squeeze drivers", drivers would stop driving for them. They'd drive for Lyft. They'd drive for some other company. They'd stay home.
The supply would crash.
They have no choice but to raise prices.
Uber is not a real business. Nothing about hiring a driver or maintaining or running a car is cheaper now than before Uber. Uber will never be profitable unless people are willing to pay the same amount as for regular taxis or for a private driver (i.e. expensive).
Airbnb on the other hand is a real and vastly profitable business. Yes there need to be tighter regulations because we don’t want Airbnb everywhere. That will have a non-trivial effect on its business. But even after regulation it remains a very profitable and highly appealing consumer and business product.
The other difference is that Uber just gets you from A to B. I will never remember the car nor the driver. Even if the driving experience is great, I won’t be telling my friends about it.
Airbnb on the other hand provides memorable lifetime experiences.
No comparison.
It's even worse, outsourcing maintenance, insurance, upkeep and whatnot to individuals is on the aggregate more expensive and time consuming than having a division of labour and a company who can manage these costs in bulk.
Uber can use better scheduling algorithms to ensure higher utilization factor of their fleet. If a taxi driver is driving 50% of the time and waiting for a fare other 50%, while Uber driver is driving 90% of the time and waiting 10%, the price for Uber ride could be lower while ensuring the same income level for the driver.
Admittedly, it is probably better to charge all vehicles for entering the most congested areas by their size (i.e. trucks pay more) than it is to pick and choose by artificially limiting just some types of vehicles while allowing unlimited numbers of others.
Let's jump to Washington D.C. If you live in Northern Virginia or Maryland, you could take the Metro into town for a night out, but would almost certainly have a huge issue getting a cab driver to take you home.
Let's jump back to SF. North Beach to the Mission district. Separate sides of the town but without a cab, thats 2-3 bus transfers and forget even getting home late at night when it all stops running.
The accessibility aspect of Uber is massive. I don't think it's fair to discount that simply because the ride itself wasn't memorable...by that aspect, are airplane companies fake businesses? Does anyone really brag about the wonderful economy experience they have on Delta vs. United vs. American Airlines? Not really, but they certainly talk about the accessibility those services offer.
I will never forget the truck, driven by a young man from Haiti whose temporary protective status was days from expiring, that had a hole rusted through the floor pan. It was a scary ass ride, but I genuinely felt he was getting as much as he could before having to go home.
I'll never forget the asshole from NJ who decided that, because we were both white, he cold go on a crazed anti-semitic rant about his home owner's association.
I'll never forget the driver who pulled his SUV over, went around the back, and took a leak--on a busy street in Philly--into a plastic bottle he had back there.
I'll never forget the young woman who couldn't hear me yelling at her to turn her music down, only to find out she was whacked out of her mind.
I'll never forget the interesting ride my wife and I had with a guy who paints commercial aircraft for a living. My wife works in aerospace, and previously in general aviation. Hearing about his contract work was pretty neat.
I'll never forget the older woman who only drives on Fridays to make enough money to go to the movies with her friends and buy popcorn. I was back-and-forth between home and away at the time, and she actually offered to let me join her and her friends at the movies that night because my wife was away and I had nothing better to do.
There are definitely forgettable rides. But I've had a good share of memorable ones myself.
It pays to be human.
Im not a fan of uber nor lyft, although I have to say I like the competition they offer. I hope Tesla delivers their Robotaxi and slashes the whole taxi pricing game.
How come? It seems like a great company to me.
Oh, I don't know, maybe because every host on the planet will "share" their room/apartment/house at exhoribtant nightly rates in lieu of renting by the month, which leads to housing shortages for people who need a place to live vs. those who are going to visit X part of the world for a few days.
The Airbnb-ification of the world is decidedly interesting for owners, while for everyone else an added hardship whether or not you use the service.
If you were disabled, or in an urban transit desert or underserved community, then ridesharing is the direct bringer of new B's. That's the reality for a ton of people. This is not fringe. Many people were underserved by taxi's before, and this is huge for them.
https://www.citylab.com/transportation/2018/06/lyft-is-reach...
That, and I firmly believe Uber still deserves to be punished for its past bad behavior on so many fronts. I used to feel for the people working there that didn't contribute to the problem, and worry that any punishment too draconian would hurt them, but Uber got away with stuff so bad for so long, that I think anyone that didn't vote with their conscience and try to find somewhere else to work was taking a calculated risk, and it's not a risk if there's no chance of a negative outcome, so they reap what they sow. Anyone that didn't make the choice to leave ended up contributing to the problem by allowing Uber to ignore the consequences.
Here, the rise of the gig economy came from automation. Not in the caricature sense that there are robot automatons that serve your plates in a restaurant, but in a sense that scalable automated processes replaced human dispatchers that answers your phone calls at the taxi companies and radios drivers to pick you up, and automated processes that replaced taxi drivers wandering around aimlessly on the street trying to pick people up.
Here we get higher productivity but it's also a powerful hegemonizing, monopolizing, wealth concentrating force where the controllers of these automated processes, which scales globally at low cost, can skim value-add (that used to be done by more people with jobs) from the transportation and other needs everywhere.
But the solution isn't to break them up and for society to become unproductive and un-automated again by forcing minimum wage, health insurance, guaranteed menial jobs etc. Whether we like it or not, taxi radio dispatchers is never coming back as a mainstream job that can be the bedrock of local communities again.
Instead, we need to start having discussions now about the fundamental way how we structure human society in a world where more and more of this planet's 'productivity' is concentrating more and more in the hands of those who produce the AI automations. This is nothing short of answering the question of why we're alive. Right now, our sense of purpose comes from trading our muscular and mental power during life on this planet for GDP. If that's the metric, our muscular and mental powers' productivity vs AI will lose (maybe in 5 years, maybe in 10 years), and by implication, we lose our purpose for living. We need to stop pretending there is an artificial scarcity of productivity and change the purpose of life.
This is a Sanders vs Yang timeline of solving the problems we need to solve in the next 5 years vs solving the problems we need to solve in the next 20 years.
If we broke Uber into 1000 Uberlets, it still doesn't change that their only path out is still to be first in replacing all drivers with AI. As pro union, pro minimum wage, pro health benefit, pro 3 day weekend as I am, taxi driver jobs are still not coming back. There just aren't going to be sustainable mining towns or fishing towns or trucker stop towns.
This doesn't answer the humanity in 2050 question. And we need to start answering that question now.
Sometimes I think folks who think like this really need to get outside more. Yes, a lot of things are being automated, but (a) consider the janky quality of automation, because it's really not mature yet even in purely-software environments where everything can be controlled, and (b) consider the raw cost of doing it vs. the productivity savings and side effects. It's just not worth it for a lot of things and won't be until we have general-purpose AI and general-purpose robotic workers that can take on human-scale jobs. Even then, it might still be cheaper to get actual people in a lot of cases.
But even if so: as someone who implements something you might call automation, like most here, I have to ask: why is it exactly that I should owe a massive amount of my economic output to those who aren't outputting anything? At what point do I simply say "fuck it" and stop working too, because some ridiculous percentage of my income has to be applied towards feeding those who won't/can't/don't do anything productive?
I think that's the general mental mismatch that people have when thinking there's a 1:1 match between the present human job and the future 'robot job'.
Cashiers is the most common job in America and the biggest job loss to automation in the coming years. But it's not some Boston Dynamics humanoid fumbling your quarters around. Nor does it have anything to do with general-intelligence AI. It's simply the task specific orange forklift bots in Amazon warehouses that's wiping out American retail because with that bot, stuff on Amazon is a bit cheaper than in malls.
> But even if so: as someone who implements something you might call automation, like most here, I have to ask: why is it exactly that I should owe a massive amount of my economic output to those who aren't outputting anything? At what point do I simply say "fuck it" and stop working too, because some ridiculous percentage of my income has to be applied towards feeding those who won't/can't/don't do anything productive?
I think that's the core question. Why are you giving away your hard earned money to feeding your child? There is no GDP output from the child.
There will be, eventually; and I get to glorify my selfish genes.
Econ 101 opinion here, so I'm ignoring totally reasonable things like "people work for reasons other than monetary compensation" and assuming you're a rational participant in the economy, but I'd say there is no percentage at which you'd do that.
No matter how high a percentage is taken, you can always increase the topline number to make the bottom line number come out ahead of not working. I'd take a 99% tax on $1 billion/year over $14k/year in social insurance taxed at 0% if it were offered.
Anyway, isn't this similar to what the comp of people implementing something you might call automation is already doing in US tech hubs? We've had relatively low inflation in the US over the past decade (by CPI, anyway) but I can find you an article by Joel Spolsky from the aughts lamenting the fact that some tech companies were paying top new grads nearly $100k a year.
Huh? If I were getting, I don't know, 200k a year, for free, I'd probably quit.
Of course there is a level where that vast majority of people would simply not work anymore.
Rich people do this literally all the time. It's called "retirement".
Tax the wealthiest 0.01% at 99% and watch how fast they leave the country for low tax regions.
It already happens with people like the Facebook cofounder that renounced US citizenship.
Because that is where the action and the talent is. It's not just about money and cost of living.
Also the 0.01 are so absurdly wealthy many are pledging to give away their money. They are not going to move away from their homeland because they are taxed more.
You owe a massive amount of your economic output to others because you stand on the shoulders of people who are standing on the shoulders of people who are standing on the shoulders of people... and it's not a simple pyramid, but one giant ball of interdependence that will be thrown into chaos if a critical mass of people try to buck off their riders.
You can't pay the guy specifically holding you up, and not anyone else, because no one can truly identify their keystone supporters. So you pay a bunch of free riders, too, because that's the only way to ensure your supporters stay happy enough to carry you. And they may think that you aren't outputting anything of value to them, and they only carry you because they can't tell who's throwing all the bread down from above.
I pay freeloaders, because I don't want to fall off the ball, onto my fat ass, and fend for myself, using only what I had on hand when I dropped.
If someone engineered a more efficient society, where everyone has a useful and necessary role, for which they each have an individual advantage, and waste is unsupportable--such as for bootstrapping an off-Earth colony--I might join that, but then still accept that I will implicitly be supporting future generations of freeloaders by accumulating capital that will outlast me.
You don't want an accounting on what you are truly worth to society at large. Trust me.
Ok, fine, but if taxes get high enough, along with the benefits, you can expect some people to stop caring and start becoming freeloaders themselves.
Don't be surprised when people just say "screw it, this isn't worth it anymore, I am going to become a freeloader myself".
Some people yes. Good riddance from productivity to them.
The people with actual internal motivation would do inventions, great work, art, programming, etc, even if they're not getting mega-rich from it.
It might slow the speed of mega-corps and new gadgets every month, but perhaps that's just what the doctor ordered. More quality, less greedy obsolescence, longer term products, more personal vision (as opposed quick-buck-schemes).
That just pushes the problem some decades into the future.
Besides, it doesn't have to be perfect. It's enough that it renders a good chunk (say 20-60%) of the population useless job wise to have adverse effects.
In fact, if it wasn't for tons of paper-pushing and busywork serving as a sort of job program and UBI scheme, we'd be in deep shit already, just from the job migration to China and co, never mind AI.
>But even if so: as someone who implements something you might call automation, like most here, I have to ask: why is it exactly that I should owe a massive amount of my economic output to those who aren't outputting anything? At what point do I simply say "fuck it" and stop working too, because some ridiculous percentage of my income has to be applied towards feeding those who won't/can't/don't do anything productive?
For one, because they can get guns and come and blow your brains out and steal your food. So now you need to pay for cops, and government, or your private militia and so on.
Second, because your quality of life, even if ultra rich will drop quickly in a failed country, when people are unemployed and not "outputting anything". In fact the whole country might go down the drain...
> Besides, it doesn't have to be perfect. It's enough that it renders a good chunk (say 20-60%) of the population useless job wise to have adverse effects.
Ya - within the US at least (current unemployment around 3%?), it does not even have to be at 20 - 60%. My feeling is that even 10 - 15% unemployment or below living wages would lead to revolts, especially if the unemployment is somewhat geographically concentrated.
There's no easy way of attributing value to invention. Does the inventor / automator really deserve all of the profit that would come from such automation for all of eternity?
What if another person was only 2 months behind in making the same invention? And 2 months after that, a 3rd person was destined to, and within 2 years, the idea would be so obvious that the top 5 percentile of that profession would have been able to come up with the same thing? Why should the first person / company to automate something deserve an eternal monopoly on the output of said automation?
Climate, healthcare, immigration, requires focus to fix correctly
What will happen to a society where every single person has their basic needs met by some form of automation, and nobody needs to work?
I would say most first world countries are already in this scenario if so much money wasn't spent on non essentials. Industrial scale farming, mass produced pharmaceuticals, rapid house construction etc. mean that if a society wanted, you could have 10% of the population providing for the 90% (an inversion of what was the case for most of human history).
There is no precedent or example from history to show us what this will do to society. How will humans cope with not actually needing to do anything? I personally envisage a Matrix like scenario where this societal change will also usher in advances in VR and related tech. People may spend most of their time engrossed in entertainment, until eventually, they see no need to participate in the real world at all.
Those who control the "means of automation" (robot factories, power stations, etc) --let's say 0.01%--, will rule over the rest, in gated communities and closed enclaves.
A small percentage of the population will live alongside them, in B-rated residences, to provide them services that, either still need humans or are better done by humans (e.g. sex), or its considered "classier" to have humans do for you (e.g. cooking). Let's say that's a 10%.
The rest 90% will be left to rot in urban and suburban slums, develop their own black economy, and shot on sight when they dare enter the rich areas.
https://www.amazon.com/Planet-Slums-Mike-Davis/dp/1784786616
https://www.amazon.com/City-Quartz-Excavating-Future-Angeles...
Right now, that definition is commercial GDP value, but even that metric's inventor warned us that it's a bullshit metric [1].
Old people living by themselves sometimes spam call doctors, not for their heart bypass commercial value, but to feel materially better after talking to another human, which has no commercial value.
When I was trying to figure out what to do after high school, I was full of energy and curiosity for this world and wanted to do everything from being a historian, to a musician, to astrophysics, which, let's face it, has no commercial value. Now I'm coding. Luckily I like coding, but not everyone's lucky to have their interests align with commercial value.
Maybe it's not so bad for humans to be humans again.
[1] https://en.wikipedia.org/wiki/Gross_domestic_product#History
To me, the central problem is wealth disparity as a proxy for power disparity: our democratic government is more than capable of addressing our ongoing needs and desires if not for the overwhelming, unjust, and unearned influence of the wealthy.
This is why I think Sanders has the correct prescription and Yang is naive: the solution isn't a policy or set of policies to fix specific problems, no matter how farsighted, it's restructuring our political system to be solely answerable to people who it feigns to represent.
1- We recognize this Bonds villain plan, we stop it and go back to our happy pastural life and everyone lives happily ever after; or
2- We grant ourselves this new productivity as a reward that frees us from labor (but in the process have to answer the hard question of how to deal with going from solving the conflict between the 1% and the 99% to solving the conflict between the 0.0001% and the 99.9999%)
If we keep automating everything and capital gets to own the cloud processing power that allows for it, and we “rent everything” as some people are predicting, what the hell earning power will anyone have unless they work in AI or programming new things to automate?
Second, the idea that there is a 'we' encompassing the 1% and 99% or some future and even more fractional segmentation is unrealistic. There's already been millennia of slavery and serfdom: let's not repeat them by trusting that our seat at the table is somehow ordained and not the result of centuries of people fighting from chattel to power on our behalf.
If we can't achieve even the most basic, obvious reforms (a universal healthcare system, a livable wage, an end to global warming in our lifetimes) given the current power structure, then contributing to the further entrenchment of the wealthy isn't just counterproductive, it's suicidal.
Sanders doesn't AFAIK support a UBI, but on top of a slew of left-wing policies, his perspective is that you need a mass movement of people to build institutions that can challenge corporate power.
I'm not saying that'll work (or that it won't) but for the sake of it, that's his policy.
He also wishes to implement preferential voting.
Yang's approach is UBI: basically, give everyone monthly income with no strings attached and no means testing.
In both cases, the cost of the policies is offset by various forms of taxes.
Bernie's approach rests on the assumption that there are and will be enough jobs for everyone (if they have adequate access to the education, health care, and child care services they need), whereas Yang's is based on the assumption that there won't be.
In the long run, I figure that Yang is right (though we could also deal with the problem by transitioning to 30 or 20 hour work weeks), though Sanders' policy proposals better address the major problems we're dealing with right now.
And the illusion that tech workers are not laborers is giving out under the weight of the high cost (hence lowered standard) of living in tech centers, and the growing realization that we're not temporarily embarrassed billionaires.
UBI is a patronizing and elitist social welfare pipe dream to address a problem that doesn't exist. as silly as 'social media influencers' may be, they're an apt example of how the world changes in unexpected ways to accomodate the ambitions of some of the billions of people on this earth with active brains and pumping hearts.
I don't think anyone is proposing that humans then do nothing and watch VR porn while being tube fed for the rest of their lives. There is indeed an infinite amount of things left to do.
The question is given this 'initial condition' where everyone is where they are currently in 2019, who does that work.
Is it the 56 year old truck driver who's now 100k in the hole for the truck he bought that's now useless with automated trucks and who's using his disability benefits to feed his opiate problems from the painkillers he needed for his back from all the hours in the truck? If he's not the guy we're putting in CERN trying to demonstrate the next Higgs field interaction, what do we do with him?
but to follow your line of reasoning, what you do is walk up to him and say, "hey, in the next 10 years, your job is going to be automated. every year, your chances of losing your job goes up. what do you want to do? [...listens...] ok, let's set up a transition plan and make sure you're ready when the time comes." and who knows, maybe he's a hobby machinist, and can work for CERN custom-building the crazy one-off contraptions they need.
it's paternalistic and patronizing to make assumptions about the abilities and motivations of millions of people and 'solve' their problem for them. it's how we get misguided social programs that waste billions of dollars (i'm not against social programs, just misguided ones, and they're really, really tricky to structure properly).
Our mental plasticity just has age related limits.
I'd also debate the conclusion you're making on which approach is more patronizing. I'd assume giving you (and everyone) the means to make your own choices with money is less patronizing than appointing your specific job as a lost cause and appointing new jobs for you to go train yourself for.
also, on people's intrinsic motivations: people don't want money in and of itself. people want esteem (e.g., status) and influence (e.g., power). jobs and careers provide those things; handouts do not.
This isn't an AI problem. This is an owner vs. employee problem. Advances in technology accrue to the owners at the expense of the employee. This always happens because employees sign over rights to their innovations to the employer in exchange for a short term need for money.
Most people never take the time or spend the money to invest in themselves.
We are not sophisticated enough to get roads fixed and keep the water supply clean. Long way to go. Don't fall for people who tell you it can happen faster, until they have fixed the roads and cleaned the water in one town.
The argument being made is that the drivers of loss of jobs are progress, and the jobs being created as a result of this are not going equitably towards the people displaced.
The purpose of life argument isn't saying that you will have clean water and fixed roads when AI automates you out of the job, it's the opposite - you won't have a fixed road or clean water because you don't matter. The money ain't near you or your run-down, economically irrelevant, town.
There is no need to debate and discuss anything more if you have proof for the simplest case.
I don't understand your argument at all. It's unrelated to people being automated out of a job and the structure of our society changing. We aren't going towards a utopia where everything is perfect, we are talking about a stumbling forward into the unknown, all our crummy parts bolted onto us.
I don't know if you know anything about 1990s-early 2000s artificial intelligence research, but the vision of the future back then was artificial agents communicating through standardized protocols to negotiate for goods and services.[1] So, a decentralized dispatching system. What you are saying is false dichotomy monopolist propaganda. There is no technical reason why the only choice is between Uber and manual dispatching.
[1] I spent a few summers as a research assistant working on multi-agent systems. Feel free to object with "but, it's not technically feasible because X, Y, Z." I can probably refute most technical reasons and provide a good explanation.
Maybe UBI won't provide a livable income, but might enable "gig workers" to survive with a dignified standard of living.
The funny thing here is that, apparently, the "non employed employees" were still getting more than what they actually earned the company- which therefore isn't getting a nice cut, but rather a debt, from millions of transactions. So this looks like VC-founded low end jobs.
The solution is improving contractor employment laws and services to reflect new reality of the economy (technology lowering the barrier to join a contractor or temp jobs increasing their quantity). Not trying to end something that's not going away and many people find useful but making being a contractor not being treat as the bastard child of employment but a standard means of work.
In Canada you can't get proper unemployment benefits if you're a contractor (and you don't have an option to volunteer into one, you'd have to do it yourself), so if you get seriously sick, as what happened to me, you're S.O.L. for even basic money and have to depend on family. Between that, universal healthcare coverage, and stricter rules on what's defined as a 'full-time job' and you'd eliminate most problems.
If you think that's bad, wait until you find out about the small business economy. Millions and millions of people run small businesses that end up losing money over the whole year and they have to pay for their own healthcare.
I can't wait until we legislate away these stupid people who currently have the autonomy to act as independent businesses.
I strongly disagree with this position. Yeah, sure, supporting people at the brink of poverty is one of the government's responsibilities, but taking away one of the few options they have goes in the opposite direction. Most of these gig-economy jobs differ from a regular job in that they're much easier to get, at least in most parts of Europe. If you meet a few basic requirements you're in. For people at risk, mentally ill people, and plenty of other segments of the population this is a real lifeline that they're not getting from anywhere else. This is keeping a roof over they head and food on the table.
Obviously, they're doing it because they can't get a better situation. Taking this option away is making them a lot more vulnerable, and doing them a lot of harm. It's not like they don't realise they're being exploited.
Sure, they should be supported etc. But that's just "shoulds", policy is difficult. For many, this gig-economy is an actual lifeline, that exists right now.
See the hospitality industry for an example. They have tips, so they don't get minimum wage.
The US government is famously bad at protecting people who need it. Anything which disguised that fact, even a little, should be removed.
If somebody is capable of providing for themselves, why "should" they be dependent on government services?
They have tips, so they don't get minimum wage.
Employers are required to make up the difference if tips don't reach minimum wage.
Anything which disguised that fact, even a little, should be removed.
Should be ban inexpensive food because it's just disguising how bad the government is at taking care of hungry people?
Remember how amazon was never profitable for years and everyone missed the boat on crazy upside. Remember Tesla ? Remember facebook and twitter before they started making money on ads ? Just because of 2 quarter loss you can’t expect uber to shut down. Not even close, their product teams are already figuring out where to get more money from.
Its a different deal If you hate uber and want it to shut down but otherwise this is business as usual. I can’t imagine my life without uber.
You literally can't imagine your life, if say, you lived in Vancouver?
the real tripe in the gig economy is all the pontificating coming down from top how they all care about rights of people, except it only is Western people they care about while those in China and other countries get run over by their governments.
The simple fact is, no employer has to make the job solve all your financial needs. It is up to you to find the job that fulfills your requirements and you can perform safely and well. if that takes more than one job then so be it, many of us have been there before and did it. you don't get anywhere waiting for someone else to fix your life
No amount of hard work buys you the right to hire around wage and employment laws.
Maybe because they didn't do the math on the depreciation of the vehicle + maintenance + car insurance with ride-sharing waivers vs. the income they receive from ride sharing. Then maybe we'd see a different opinion from drivers.
For me the issue is unreliability of Services like UberEats.
Uber et al make convenient villains (and for I don't by any means think they are innocent), but we should also recognize the consequences of our collective choices.
Assuming the compensation was for a business need (like hiring labour or purchasing something necessary) then I don't see how that should be isolated or differentiated from regular costs of running the business - assuming it wasn't a business need (and was more of a way to game the stock price) then I'd assume whoever made the decision to take such an action when Uber is already losing money hand-over-fist is just trying to get out some loot while they can... which is potentially an even more extremely bad scenario to accept.
I'm not sure when the accounting laws changed to include SBC (probably post-financial crisis), but it's weird to include it in an income statement as if it was a cash expense. You can find articles from accounting experts arguing both ways if you are curious.
e.g. http://aswathdamodaran.blogspot.com/2014/02/stock-based-empl...
More to the OPs point, I'm guessing Uber had FB-style RSUs that don't settle until an IPO or Change of Control. I'm not sure how this all gets accounted for, but given the recent IPO, it sounds like they booked a very large SBC charge this quarter to account for the immediate hit of all the previously issued RSUs finally being settled.
Going forward, the number of RSUs that settle each quarter would therefore presumably not be nearly as large.
But I'm not an accountant so the above may be wrong.
There isn't much to disagree about. It's a real cost against shareholders (that's what Buffett is talking about) and it is not an expense against the business operations such that it depletes your cash or harms cash flow (the point a parent comment was making).
Putting it broadly, stock compensation is primarily a hit against existing shareholder ownership. It debases their ownership of present or future profits.
Uber could simultaneously produce $5 billion in positive cash flow from operations and issue $20 billion in stock every year to employees. They'd have a profitable business at the operational level and be drowning shareholders in dilution.
Except it is, you're borrowing money from the future if your company would ever consider issuing more stock in a followup round - it also may damage your ability to court private investors, not just because you lowered your share price but because you're more likely to dilute it more in the future.
The stock market is a generally viewed today as an absurd concept composed of abstract financial wizardry - but it is grounded in the concept of partial ownership in a company and the assets of that company.
One time loss is fine to ignore, but one should still look at the remaining 1.3 billion loss including routine stock based compensation.
But mostly post dot-bomb. It's one of the reasons you see a lot of RSUs at bigger companies today rather than traditional options. FAS 123(r) was the first major rule. This came about because companies basically were treating stock options like they were free money from an accounting perspective.
First, the 3.9B figure appears to represents all RSUs vested up to this point, aka many years worth ("(2) Q2 2019 includes $3.9 billion of stock-based compensation expenses, primarily due to RSU expense recognition in connection with our initial public offering"). That's why its slightly misleading - its many years worth of stock comp for employees which is all getting recognized this quarter (Happens in pretty much all the big tech IPOs)
In general though, its very reasonable to associate that as an expense, which is why GAAP requires it. Where that gets complicated is that its not an immediate cash expense to the company, hence some fudging around with non-GAAP accounting which is seen by some companies.
I am pretty personally wary of stock based compensation in non-publicly traded companies since it's a gamble that the employee is accepting that is entirely controlled by the company - bad business decisions can cut your compensation through no fault of your own if the company goes bankrupt.
>We incurred operating losses of $4.0 billion and $3.0 billion in the years ended December 31, 2017 and 2018, and as of December 31, 2018, we had an accumulated deficit of $7.9 billion.
Now they have accumulated a deficit of $13.1B. You might say, well they shrank their loss from $4B to 3B to $1.3B (giving you the extra $3.9B one-time stock comp). Except one has to keep in mind they cut expenses and raised fees in that stretch in anticipation of their IPO, so its literally the best they could do...only lose $13.1B over 3 years.
Investors and Founders made their money, Uber is now for the plebs to figure out how to salvage and milk. It will just be a long and painful death from hereon out, but the market will remain irrational to allow Investors to save face so they can run the same Startup/IPO unicorn scam on the public to cash out.
However, instead of the long painful death, an alternative now that the Investors are out, we may see the regulators finally "catch up" and properly classify Uber drivers as employees not independent contracts and the bottom give out.
(Self driving cars were never going to save them. Not only do they not work yet, there's no reason to think they'd be much cheaper for years to come. Uber would have to pay for them, garage them, maintain them, operate control centers, etc. They'd be in the car rental business, which is not hugely profitable. Uber's business model is to dump their operating costs on their drivers. With self driving cars, they couldn't do that.)
Apparently Lyft upped its guidance, and Uber stock took off today; it was up 8.25% percent from yesterday. As of right now, it's now down 10% off closing to 38.66, a value it hasn't had since... last Wednesday morning.
Disappointing if you're a holder, sure, but not as catastrophic as you'd think if you only read this news.
(To the extent I have bias here, it is bias against trying to judge stock performance only by reading about its massive jumps up or down. Uber I'm not a particular fan of but I can't say I'm all that personally passionately against it either. I don't mean this as attack or defense, only a perspective on the news that I think is closer to a truth.)
Most people who drive drunk aren't doing it because they're desperate and have no other option, they're doing it because they're drunk assholes. They will still do it even when they could get a Lyft for $8. They're drunk.
> I couldn't even imagine trying to get home without lyft or uber in many circumstances.
Ok, but people must have managed it somehow 10 years ago, right? Your college and your city have not changed very much in that time. It truly is not that hard to take turns with your friends staying sober once in a while, or just stay over at a friend's place and then leave in the morning.
My college and the city actually has changed a lot in the past 10 years, it's seen acceptance rates go down 20%, 2 deaths in Greek life, tuition rise by $10,000, and major companies move into the area. My school also has developed a parking shortage, so many students living on campus are not allowed to bring cars. Uber/Lyft is a godsend for many students.
My point is that it's a marginal improvement, and there are so many downsides. In my city, 8% of cars on the road are Ubers and Lyfts, and half of them are just drivers cruising around looking for passengers. [1] That's terrible for traffic, terrible for the environment, and terrible for anyone who wants to bike through a square without a clueless Uber swerving into them to drop someone off.
Also, the backstop of Uber makes it much less likely for people to push for real sustainable public transport. In 5 years, when Uber is dead or so expensive that most people won't use it regularly, we're going to look around and wonder why the buses and trains seem to have stagnated for 15 years. It's a tough sell to shut down a few streets to expand a subway line right now when that disrupts all this essential Uber traffic.
Finally, think about the opportunity cost. The hundreds of billions of dollars that could have gone to real infrastructure [2], or startups that aren't going to fire all of their definitely-not-employees in a couple years.
[1] https://drive.google.com/file/d/1FIUskVkj9lsAnWJQ6kLhAhNoVLj..., https://www.citylab.com/transportation/2019/08/uber-lyft-tra...
It's kind of ironic, at my school we have a great (all electric!) bus system transporting people around campus, and half the time when the bus pulls up to the cutlet, there's an uber there either waiting or dropping off a passenger. Which then slows down the bus while it honks at the clueless driver who doesn't even know there's a bus stop there.
1,740 Cost of revenue
864 Operations and support
638 General and administrative
_____+
3,242
Also: what’s in “Cost of revenue”? It is neither “Operations and Support” nor “General and Administrative”. The subsidies they give drivers? If it is, prices would have to go up by about 50% for that to go to zero.
The are not trying to attract drivers at all, they are trying to eliminate them. The drivers portion of the fair is the largest cost so removing drivers increases margins overall. Self driving cars are the only way this is a good business - which is why there is so much competition from many of the smartest innovators/investors in the world.
What really surprises me is how many otherwise savvy and tech-knowledgeable people bought into the hype.
That said, I also think that not everyone involved in spreading the hype does it for innocent reasons. For example, people often criticize Elon Musk for making absurd claims about self-driving cars, but then argue that he does it because he is innocently deluded. I suspect it's more likely that he is lying through his teeth.
1. General AI optimism fueled by the almost incredibly fast rate of advance of progress enabled by supervised learning in certain domains and by reinforcement learning in an even narrower set of domains.
2. Adding to the above, progress enabled by super-precise mapping within constrained areas.
3. Probably some California-centrism. What's this weather thing of which you speak?
4. Silicon Valley techno-optimism that problems just need one more version to solve
but
5. A great big game of topper in which, once various people started proclaiming that self-driving was just around the corner for whatever combination of over-optimism and because it was in their financial interest to do so, YOU had to fall in line or you'd be perceived as being hopelessly behind your competitors when you said self-driving was decades out.
Further fueled by
6. The many young professional urbanites with no current interest in owning a car or even getting a driver's license who so desperately wanted to believe that their personal robotic chauffeur that they believed things that they never would have were they not otherwise so personally invested.
The P/S multiple is what you’d expect the P/E multiple to be.
Ridestar claims that 61% goes to the driver; 39% to Lyft/Uber.[0]
Their S-1[1] shows lots of sales and marketing, lots of R&D (remember, they're working on self-driving cars, among other things), and lots of general/admin (I suspect they spend a lot on legal).
[0] https://www.ridester.com/uber-fees/
[1] https://www.sec.gov/Archives/edgar/data/1543151/000119312519...
I don't have a horse in this race, but if Uber/Lyft fail there are going to be substantial societal repercussions. Admit it or not, they have disrupted the transportation industry significantly.
Just as a note: without a low-cost private car, I literally could not keep my job.
So whoever gives me a discount I will use and if no one will I will catch a bus or taxi. Google Maps shows me the estimated cost for Uber and Bolt.
I don't want to work around it. Therefore, I rarely use these services. It is becoming more and more hassle.
Do you understand how many other industries use AI for pricing? What about buying things on Amazon? Hotels? Airline tickets? Gas?
You may as well go back to using taxis if you don't think Uber is giving you a fair price.
I'm okay with airlines, amazon or whoever setting pricing at whatever they want as long as all users pay the same amount for the same thing.
(1) https://www.nytimes.com/2019/07/29/technology/uber-job-cuts....
(kidding)
It may as well be trying to hold back the sea. They can do this in the short-term, but not forever.
ninjaedit: I'm in favor of this putting pressure on public transit for sure though. In SF its abhorrent how late/delayed MUNI can be...
[1] https://www.vox.com/the-goods/2019/8/6/20757593/uber-lyft-tr...
I still think there's a market out there, but Uber in particular feels like it's grown too big for the actual market it can hope to occupy.
You can see the losses shrunk (lets for just a second ignore the stock based compensation because that should have been something every investor of Uber should have known was coming) but missing on top line revenue is pretty rough.
This makes a bigger difference when big drops come into play. A 50% gain is offset by a 33% loss.
City dwellers posting the opposite because they rely on the product to make their lives work.
Here I am, stuck in the middle with you.
What were they expecting to happen? A company losing money with no sign of being profitable any time soon. If ever. They expected the stock to go up?
Not exactly as bad as the headline makes it sound, but still bad. EDIT: Still very bad. Obviously!
console.log(document.querySelector('#site-content').innerText.replace(/(.{80}\w*)\s*/g, '$1\n'))From January: "According to a new poll conducted by the Pew Research Center, just 36 percent of American adults say they have used ride-hailing services. Sixty-one percent say they have heard of the services but hadn’t taken a ride."
https://www.wired.com/story/uber-lyft-ride-hail-stats-pew-re...
Heck. I travel lots and it's probably been a few months since I've taken a Lyft or Uber.
I don't think it's as important a company as you seem to think.
It's not as though UBER going under is going to tank the economy, but it will be a major unicorn going under, causing the entire silicon valley money-losing model to be questioned, leading to trouble raising money, layoffs which drag down the rest of the economy.
Similar to the 2000 crash.
Not great for devs looking for 6 figure jobs in the Bay Area. But not clear how broad the effect would be--unless they were triggered by more serious external events.
And 2000 crash also was associated with other things like 9/11 so it's easy to conflate.
Several unicorns going bust could be enough to kill confidence in the markets and cause people to prepare for the worst (I.e. sell investments and stop spending).
Just a hypothesis!
Stay tuned.
1. 3.9 Bil was a one time cost
2. 1.3 Bil is not almost double 880 Mil. I mean that's just egregious.
That doesn't mean it isn't a loss?
Does that mean I didn't lose your $20?
Did you lose $20?
That's a closer analogy to SBC than losing cash.
Do you owe me $20?
This is the closest to what SBC is.
If the options are exercised, you're liable for that expense. It's a delay on the payment of the 20 dollars helping cash flow, and tax code yadda yadda, but you can't pretend that handing out vouchers for money to employees doesn't mean you're not liable for the money from an outsider assessing your financials.