Uber Is Still a Bezzle
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If this article were just targeted at investors, fine. I wouldn't touch Uber stock myself. But despite all the mentions this article makes of investors, it really feels like it's making an argument that's much wider: that Uber has made the world a measurably worse place.
All the scandals around Uber are presented as if they're something new; as if Uber created and nurtured an unprecedented environment of crime and abuse. Which is, of course, ridiculous. Taxis scammed their riders with bad routes and hacked meters. We know that taxi drivers have robbed, killed and raped their passengers, same as various Uber drivers, but government by and large didn't even keep stats on these crimes. I've been to many cities where locals have warned me to never, ever use taxis.
The gig economy is bad? OK. Fine. I hope that workers find a way to engage in collective action; I hope that people besides the workers help them. I would be happy to support any widespread movement for better work conditions and pay. But gig work is not inherently bad, and it's ridiculous to pretend that nobody should ever have a business model that uses it, or that Uber's popularization of gig work was a sin against humanity.
Uber broke laws? My god, I'm so happy they did. The taxi industry was bad; the legislation protecting and restricting the taxi industry was awful, and corrupt, and needed to be forcibly broken.
I remember having a crippling injury several years before Uber existed. I couldn't drive, I couldn't take public transportation, I was utterly reliant on taxis in a major metropolitan city. My injury was bad, but using taxis was absolutely unbearable. And even long after Uber was around, taxi companies were doing very little to improve. It feels like the author here would tell me that I'm wrong, that Uber made things worse. For my part, I feel like he's just chasing clout; it's fashionable to paint Big Tech as evil, and there's no profit in admitting anything it changed might be good.
> This is the first of a series of articles addressing the question of whether Uber’s pursuit of global industry dominance would actually improve the efficiency of the urban car service industry and improve overall economic welfare.
> For Uber (or any other radical industry restructuring) to be welfare enhancing, it would have to clearly demonstrate:
> The ability to earn sustainable profits in competitive markets large enough to provide attractive returns on its invested capital
> The ability to provide service at significantly lower cost, or the ability to produce much higher quality service at similar costs
> That it has created new sources of sustainable competitive advantages through major product redesigns and technology/process innovations that incumbent producers could not readily match,
> and
> Evidence that the newly-dominant company will have strong incentive to pass on a significant share of those efficiency gains to consumers.
> Unlike most startups, Uber did not enter the industry in pursuit of a significant market share, but was explicitly working to drive incumbents out of business and achieve global industry dominance. Uber’s huge valuation was always predicated on the dramatic growth towards global dominance. Thus if Uber’s valuation and industry dominance were to be welfare enhancing, Uber’s efficiency and competitive advantages would need to be overwhelming, and there would need to be clear evidence of Uber’s ability to generate large profits and consumer welfare benefits out of these advantage
All of the above was written, and obviously true, in 2016 but somehow business journalists don't seem equipped to ask these basic questions.
You getting cheap, subsidized taxis is like society investing in a perpetual-motion based electricity grid because the huckster pushing it charged your phone for free.
It is understandable that people might be angry with perpetual motion promoters, as they are dangerous criminals.
For one -- I did not get cheap, subsidized taxis. I got a service that moved me from one place to another, yes. But it's incorrect to call that service "taxis", considering what the taxi industry actually offered.
That's not fair to the entire taxi industry. I've lived in places that had incredible taxis. London and Tokyo, for instance. Uber didn't actually improve those places much. But in San Francisco? Manila? Any given tier 2 or tier 3 city? It's a different service. One that actually works.
Now the taxi industry, at least in some places, is finally improving; adding some tech, making itself a serviceable option. And that's fine! If you want that to replace Uber -- great. I'm on board. But that would not be happening without Uber having acted as the hoard of rats chewing the blockage out of a sewer tunnel.
Similarly, the article argues that Uber has done some massive harm to public transit. It gives no evidence, so I'm disinclined to believe it. Public transportation was either good or very, very bad in each of the places I've lived, with not much in between. That was before Uber, and the "very bad" category was not on track to improve. Cities can turn around now and decry Uber and blame it for their terrible buses, but those same cities were doing an awful job before.
So largely my point is backward-looking. Whatever changes Uber has wrought are already in the past; and looking into the past, I say they were good. I can imagine an argument with more nuance than mine, but this article is pure outrage and vitriol. Nor do I think it's even reasonable to say that, if Uber goes into bankruptcy in the future based on its inability to turn creative accounting into profits, the entire transportation industry will somehow collapse. It will be fine, and still greatly improved over 2005.
https://news.ycombinator.com/item?id=30307678