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Comment by jakelazaroff | Hacker News Reader

I wonder when this trend of calling companies "tech companies" — just because they happen to use technology — will end.

WeWork clearly is a real estate company; Uber is a taxi company with an app; etc.

I think it's the trend of bringing tech to an existing market. When that stops, we'll probably stop calling it tech companies.

Uber is the perfect example of a "tech company" - they brought technology (and in this context "tech", arguably, means "the internet") to an industry that was previously dominated by standing on a street and waving down a cab/taxi.

However I think it is rather pithy to just call them a taxi company with an app, right? There's a lot of tech "magic" involved in Uber from the real-time connections on a such a massive scale, to the geo-fencing, price/route estimations, and the massive amounts of infrastructure management and maintenance needed to bring that to however many millions of people use the service.

> There's a lot of tech "magic" involved in Uber

I agree this is true of Uber, but is it true of WeWork? It seems like the comparison with Uber just makes WeWork look even less like a tech company.

I agree, I don't see how wework is a tech company other then the fact they probably service mostly tech companies. I was stationed at wework for a while, I liked it. But I don't see how tech is involved

WeWork to me seems similar to a chain gym. Both have shared physical facilities and manage a membership database that allows you to get in (and also provide WiFi). Yes, there's computer systems involved, but any company of any reasonable size is using computers these days.

But we don't call, say, banks tech companies. A huge portion of their business requires sophisticated technical infrastructure they create themselves, but we just call them banks.

And there are plenty of normal taxi companies with similar systems to Uber's.

>But we don't call, say, banks tech companies. A huge portion of their business requires sophisticated technical infrastructure they create themselves, but we just call them banks.

I understand your criteria for classification but I'll attempt to explain why others think of Uber as a "tech company".

Others' viewpoint: Yes, virtually every company uses technology but not every company is birthed by technology:

- the Uber founders (Travis K and Garrett C) were software programmers, not taxicab owners.

- the product they worked on was a smartphone app instead of buying a car with a taxi medallion and driving around for fares.

- the type of investors that funded them (e.g. Benchmark Capital) were VCs that specialize in the tech sector.

- the type of companies Uber has acquired[1] so far are tech focused (e.g. machine learning, geospatial, etc).

Yes, 100-year-old banks always have ongoing modernization with evolving technology (e.g. Citi and Chase have developed smartphone apps) but Uber's birth was programmers playing around with smartphones.

Another example of the perception difference is eBay vs Sotheby's/Christie's. eBay is typically called a "tech company" but Sotheby's/Christie's are called "auction houses". If eBay brings together buyers & sellers in a marketplace... and Sotheby's/Christie's also has an auctions marketplace... why is "tech company" more often attached to eBay rather than Sotheby's/Christie's? (Both Sotheyby's & Christie's have websites for users to place bids so they develop technology as well.) Probably because eBay was born on the internet by a software programmer named Pierre Omidyar.

I'm not saying you have to agree with all that but just trying to explain the "hidden taxonomy" that some of the others (including the news media) use to label certain companies as "tech company".

[1] https://acquiredby.co/uber-acquisitions/

>> - the Uber founders (Travis K and Garrett C) were software programmers, not taxicab owners.

And if a software programmer opens ice cream cart on a beach, would you call that "tech startup"?

>> the product they worked on was a smartphone app instead of buying a car with a taxi medallion and driving around for fares.

Smartphone app is something a bright high schooler can make, I would expect a company to do some more advanced tech before we call it "tech company"

One description I’ve heard is that “tech companies”, as the term is often used nowadays, are organizations where software engineers and their work are respected and considered first class citizens. As compared to a company that might heavily use tech, but only as a necessary evil cost center. Never mind that the company would absolutely fall apart without its tech.

As someone who has worked in banks most of my career, I would classify most banks in the latter category.

Hmm. I worked for a web development company; it called itself a "digital agency". It was once pointed out to me by a director that the purpose of the firm was marketing, not making websites. The developers were generally treated as fungible resources; graphic designers, on the other hand, were stars.

This director was a smooth salesman. He fancied himself as a graphic designer, of course; his major technical accomplishment was the ability to make Flash websites.

There's a ton of tech involved in all kinds of companies: hotels, airlines, hospitals, insurance companies, anything really. None of them are "tech companies".

Neither is Uber/Lyft/Grab

In many ways, banks were the original hybrid tech companies. VERY early adopters of software, mainframes, databases and so on. But because they were so early we don't call them tech companies, probably because there wasn't a concept of a 'software tech' company back then and they were evolutions of older companies that didn't use software to run their businesses.

People call Monzo a tech company.

'fintech' specifically. It's almost a style designator.

In my mind, the main feature of a tech company is the ability to scale due to almost zero marginal costs, compared to other companies which need much more time and resources, which is also why tech companies can have such huge profit per employee numbers.

That's very specific to software that doesn't need much support. I think Intel is probably considered a tech company and they certainly can't scale at near-zero marginal cost.

>However I think it is rather pithy to just call them a taxi company with an app, right?

Perhaps you mean reductive? A pithy statement would be one which has identified the core of something or is very meaningful despite being terse. It is very positive.

Definitely agree with you about Uber. Here's one clear way to see that Uber is a tech company.

Imagine the senior management was all abducted by aliens tomorrow, and you had to replace them very quickly. Who would you rather bring in. A bunch of senior execs from Google or a bunch of former Taxi company managers? Which group do you think could run Uber better?

Well I think the obvious answer makes it pretty clear that Uber is a company with tech at the very foundation of its DNA.

It's a logical extension of the ponzi scheme that exists in the venture capital/startup world in tech. The fact that so many startups fail is irrelevant to the early investors in these companies, as long as you get in at or before Series A you have a good exit 90% of the time. Just force some artificial growth and wait for the next round of investors.

Everyone who comes later... not so much. Very few good outcomes. So they're now just adding some more levels to the pyramid to try and push the scam down the line to the IPO market.

It should be illegal, and would be if we had a functional SEC instead of what is effectively an empty building.

Do you have any numbers or anything concrete to back up that argument?

VCs get management fees typically 2% of fund size. VC incentives are misaligned with LPs. Very similar to hedge funds. As long as they keep raising the money keeps flowing and they can delay showing a return. Whether the fund fails is irrelevant. There’s an endless supply of rich LPs like there’s an endless supply of kids with a “startup”.

It will end when the regulation catches up.

I worked in the gig economy space for two years. Literally, the only reason to be a "tech company" is to claim you simply provide the technology and aren't responsible for how people use it (aka employment law)

I agree on WeWork, but Uber is clearly not a taxi company. They're closer to being a mobile app developer, though that still feels like it falls short of an accurate description.

Uber is a taxi company with creative outsourcing of taxis and drivers.

I mostly agree with you, but I think what's happening here is reminiscent of the e-commerce vs brick&mortar debates from years ago. Ultimately, Amazon started as an e-commerce business that has a whole ton of brick and mortar capital and infrastructure.

For a long time, tech companies wanted to do everything virtually (apps, cloud, etc) and people NOT from the tech industry had an understanding of the brick & mortar world and harnessed tech to create a boom of some kind.

I think Uber is like that, in that the level of tech needed -- not just an app, but a global infrastructure that has to stay up and takes payments in a lot of countries -- when married with the real world, created a kind of behemoth.

They're also financial structure jockeys, and We is more contracts & funding and not really all that much tech.

> but a global infrastructure that has to stay up and takes payments in a lot of countries

To play devil's advocate though, that's just the 'back office' updated to replace manual book keeping with automatic software. (Well, 'just'.)

I think we can usefully describe companies as both 'tech-heavy company in the <domain>' and '<domain> company that uses tech' depending where the emphasis should be for a particular sentence.

It just doesn't really mean anything to me alone.

Google is 'just' replacing library card catalogs with software :p

Uber made the right call in that it's asset-light; they don't long-term lease medallions or have long-term contracts with landlords (any more than a similarly sized technology company would). The We subsidiaries, on the other hand, are dreadfully asset-heavy. They can't just pack up and move out of a city that's underperforming. And as we all know, agile is as much about knowing when/how to stop doing something as it is about moving fast in doing new things. My only sadness is that this is so apparent that it will be immediately reflected in We's price, and there's likely not much opportunity to short these guys.

Uber is a taxi company that replaced the taxi industry's global pain point: dispatchers, with an app. Secondary: medallions (which are eventually coming back via regulation).

How they populate their inventory of drivers is not particularly special. You used to be able to drive a hack for a few hours and lose money doing it, too. That part hasn't changed, you can just lose that money driving your own car now.

They provide a service that lets you summon a car and driver to take you somewhere for money. From the user's point of view, the only structural differences are that you use an app instead of your voice and payment is easier. It's dramatically different on the back end than a traditional taxi company, but the service is the same.

Uber was ride sharing company with some tech. They are a little bit different than a taxi company

Because they develop their app in house they are an app dev and not a taxi co? Are all taxi companies that have apps and develop them in-house app companies and not taxi companies?

Are their revenue coming from apps or from rides? That's the clue.

It's a property company that's planning tracking everything people do in their buildings.

>WeWork's latest acquisition is a small software company with 24 employees. Euclid is a spatial analytics platform...Euclid's website says the company is "focused on redefining the workplace experience of the future." Translation: optimizing every aspect of the physical workplace so workers are their most productive. Euclid does this by tracking how people move around physical spaces. Its technology can track how many people showed up to a meeting or to that after-work happy hour. The company can see where employees tend to congregate and for how long. It's all done over Wi-Fi.

https://www.inc.com/betsy-mikel/wework-is-trying-a-creepy-ne...

It's a physical workspace analytics company! /s

I think the question is, if you removed their tech, would they still have a product?

For WeWork, yes, absolutely. Uber, not so much.

Of course, being dependent on tech doesn't make you a tech company, but I think it's a simple heuristic to quickly falsify the WeWork cases.

Are banks, airlines, hospitals, or big retailers not named Amazon tech companies? If you took their tech away now, could they stay in business?

A hell of a taxi company with that many engineers and research and development areas. But I agree on WeWork as a real estate company. They are not creating anything.

Can you define it (as opposed to giving examples) in a way that calls any non-hardware-producing company a tech company though?

I sort of want to agree, but it seems like any software manufacturer is 'a <domain> company that uses tech, not a tech company' if you keep going.

WeWork, absolutely though. Honestly, the news to me here is that anyone thought it was or called it a tech company.

If your revenue isn't driven by your technology, then you aren't a tech company. If it is, then you are. There's tons of software companies that make money by selling (directly, or by charging licensing, usage fees, etc) for their software.

WeWork isn't selling software, or any other form of technology. They're renting property.

So if Uber's model was subscription-only software that enabled ~unlimited~ fair usage many rides, it would be a tech company, but as it is it isn't?

I'm not disagreeing with the conclusions about WeWork and Uber, I just think it's hard or not possible to define what it is, and what does it really mean anyway: to varying degrees any company in any sector is enabled by 'tech'.

>if Uber's model was subscription-only software that enabled ~unlimited~ fair usage many rides

I have no idea what this sentence means. But if Uber was a company that sold software to taxi companies then they'd be a tech company. As it is they sell car rides, not software, and so are a taxi company more than they are a tech company.

I mean that if Uber provides the same service, but the pricing model is such that you pay for the software instead of the car ride directly, it's suddenly a 'tech company'?

If pricing model is how we categorise a company as a 'tech company' or not then I don't see that it's a useful category.

Garmin makes the tech.

Strava provides a tech service on top.

Ubiome - software for lab results

Yep, at some point in the past every business started to use cars to bring supplies or delivery products. Are they all car companies?

And before were all companies horse companies?

When it stops making someone money.

Yeah its mostly a factor of what VCs they tap and their portfolio companies coupled with how a company spends. High burn high growth Draper Capital? Tech company.

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