We must return to an economy fueled by innovation, rather than disruption
greg-satell.medium.com
greg-satell.medium.com
But even if it did some good "disrupting", I think the article's point is it's not real innovation. Same e.g. with self booked travel, self scan groceries, etc, they are not really innovating, they just change a power balance.
So the it ends up being bad when all the capital is chasing these disruptors instead of "innovators" for some definition.
The thing it misses, I think, is that many of the big winners (or monopolies if you like) actually do end up funding massive amounts of innovation.
Facebook and Google have contributed huge $ to AI/ML research, Amazon Go I think qualifies as real innovation (and I think there are many amazon examples that are more than just an app). Tech is easy to pick on (I've picked on it a lot) and Uber may be an egregious example of a company that disrupted and didn't give back (though they don't make money either). But I think there has been some major innovation come out of tech companies, even if that isn't how they got rich in the first place.
When the basic building model is to break the law, chances are the law had a point and people are going to want a return to normal eventually. The only way they survive long term is if the general population feels it’s the new normal is a useful tradeoff. In the short term they can massively subsidize users, but long term the same basic economic reality sets in so they need some actual innovation.
This varies a lot by area - For example, I'd say the NY medallion regulations had a point to them, and that point was to systematically abuse cab drivers for the profit of the local government and banks.
Then for example - in my area (Atlanta) medallion supply was capped at 1600 - the result meant cabs basically didn't exist outside of the airport. Need a ride home from a party? Called a cab company? They won't show up. At all. They will dispatch cab after cab after cab that simply will never EVER show up.
Cabs would show up to exactly two places - Nice hotels that paid them under the table to make sure they kept coming, and the airport. Conveniently those two places tended to make circular trips.
So are there negative externalities to ride-sharing? Sure. Is it currently better than the previous cab monopolies? I'd argue yes. Do Uber and Lyft really represent a sustainable model? I don't think so.
NY cab medallion regulations were rooted in the aftermath of the Great Depression where it was a race to the bottom and little things like "car maintenance" were viewed as a burden.
Funnily enough, Uber and Lyft are in this race to the bottom right now. Hopefully we can stop it before they start kidnapping people.
History doesn't repeat, but it sure rhymes
Without any - Folks will cut every corner they can to save money, which leads to lots of negative externalities.
With too many - there's no reason to offer a compelling product, because the regulations define such a static status quo.
Both of those are bad. You need a healthy mix.
Except now airbnb is accepted by city regulations and cities give out permits and make occupancy dollars.
Same with uber.
And what point would that be?
Satisfying some legislator's desire to show Karen they're "doing something"?
Raising the barrier to entry for new entrants?
Protecting people?
Everyone who has a poorly thought out regulatory knee-jerk reaction likes to imagine that it's all the 3rd option but there's a heck of a lot of the first and second sailing under the flag of the third and a heck of a lot of people who would rather just use some heuristic like "more laws, more paperwork, more license fees, more better" than actually think critically about all three options.
A critical mass of the general public assuming that every regulation's primary purpose was to protect people when created and that said purpose has stood the test of time is how you get crap like the taxi medallion system in the first place.
Licensing/regulatory evasion is one of the principal strategies that got Uber (taxi services), Airbnb (hotel services) and Paypal (banking services) off the ground and allowed them to compete so effectively against incumbents.
Eventually regulation caught up somewhat but the newcomers still seem to enjoy a favorable regulatory/licensing regime.
And of course another major strategy for Uber and Airbnb was eliminating full-time frontline employees.
In the case of taxis, while the medallion system (for example) gave medallion owners a monopoly on regulated "taxi" service, it also discouraged (or outright prevented) them from expanding services and competing effectively against Uber. Moreover the monopoly market's reduced competition did little to encourage innovation or service improvements.
That being said, your point is a good one in general, and the same result (regulation preserving incumbents - for a time at least - by increasing barriers to entry and shielding them from competition) repeats itself over and over. One could imagine a powerful company (Facebook) welcoming regulation as a way to preserve or prolong its dominance by creating a regulatory burden that potential competitors would struggle to overcome.
It is more efficient to accomplish the same thing with less time and labor.
I don't know if gig companies or all VC companies are perfect, but lets not pretend industries regularly fail to innovate in the absence of competition.
Healthcare - the tech disruption in healthcare actually makes it easy to see a doctor over video call for small stuff and easy to track my records over time. The existing healthcare system requires me to call and wait weeks for an appointment and use some clunky UI to even message a doctor. And everyone knows how terrible insurance is..
Banks - In Canada, I can't get a single bank to give me API access to my own account. Their native interfaces suck, and connecting with Mint is frequently buggy. Mint itself is much worse than Quicken for browsing transactions, grouping, charting, but Quicken's API connection to banks sucks, despite also being built by Intuit. Crypto websites and apps are much better & provide great API access. If they had a trustworthy stablecoin, i would move in a heartbeat.
Education - university prices keep going up even as their model remains the same. Even as the actual content of courses is freely available online. University costs are insane, student debt levels are insane. Software is the first industry where the majority of what you need to know especially as you move beyond general CS comes from the internet, _for free_.
Electric cars/space - Reusable rockets were literally considered impossible a decade ago, they are reality now.
Like it would be great to have actual innovation. It would be nice if we had any meaningful anti trust enforcement or other ways to force innovation. But in my (relatively short) lifetime, i have almost never seen large scale innovation happen in the absence of competition. Any serious competition feels like "disruption" to industries accustomed to hanging out and collecting profits.
The problem I see is that even the potential for disruption is consolidated in fewer and fewer hands. With IP law the way it is, Google and Apple acting as gatekeepers to mobile ecosystems, Amazon owning e-commerce and squeezing or competing with vendors who depend on it - the world is increasingly becoming a place where a project has to be blessed by one of a handful of giant corporations to be allowed to exist.
And it’s making things worse for consumers. For instance Disney buying up entertainment properties and putting them behind a walled garden, or MS doing the same with game studios.
Silicon valley made its name as a place where a couple people in a garage could invent something to change the world. It’s debatable whether it’s even worth trying anymore, since it’s such an uphill battle to compete with the giants. If you ask me that’s a problem and we should seriously think about the way IP law is handled.
Whether that ideal was ever the norm or not, it's clear that it's not an important marker of a contemporary startup.
The capitalists might still be able to offer the best leverage to approach universality, but 50 years ago their currency was drastically debased like everyone else up and down the food chain.
These are losses that have never been recovered, but it still left the surviving capitalists in much stronger financial control relative to everyone else. Millions more citizens of a quite smaller country were pushed downward into more survival-type activities in place of the structure which had allowed the benefits of increased productivity to trickle down. There was great pressure to reverse the flow of that wealth trickle, which eventually prevailed and grew exponentially, it became more & more of a "consumer economy", trickling up. Until the vast majority of individuals' generational resources that could be allocated to innovation have been tapped out along with all kinds of other stores of wealth which is the only way a recovery at the top could be expected possible in the fewest decades.
Capitalism is not the problem when it benevolently leverages innovation, the damage is done when it leverages greed. It does not have to be ugly if you can truly afford better, and have the conviction to carry it out.
But the more financial control and resources you have access to the more money you can always make doing carefully crafted financial deals involving existing wealth, most people in that position are less likely to accept something new anyway.
So you really need inspirational amounts of resources to permeate much deeper into the population because you need so many millions more people empowered to work more innovatively if they so choose, because that's where you find the potential to turn "nothing" into something to begin with. Very few will actually make the absolutely incredible breakthroughs, so you need millions to whom it is just plain more within reach.
Probably about like when a single-income semi-skilled paycheck could still support a homeowning or suburban family lifestyle. Even if it's not the suburban-living crowd you expect to be doing the innovating. Sheesh, that's about 50 years behind us too isn't it?
When Wells Fargo is sitting on kilos of gold, there's always going to be people who are so impressed that they can see no value in anything else. Especially not turning nothing into something, when there is so much wealth already accumulated there to desire or get their hands on in some much more expedient way. Even more so when almost nobody has any gold at all unless Wells Fargo shows up and puts some on the table. If there was ever really enough to go around, why you wouldn't need Wells Fargo at all anymore.
Would you apply the same logic to starting a new country? Don't like your government, go start your own country!
Corporations are and have been for some time, larger and more powerful than many countries, because, you know, globalization?
So, you know, please spare us your 'don't like it, do it yourself' takes.
I am going to make my point bluntly. Do you think the people driving for Uber are dumb? Every time I see this kind of argument I feel like it removes any agency from the gig workers. The implication is "Uber's drivers don't understand they are getting screwed. We need to change the rules of the game so Uber stops screwing drivers."
I have never seen a good argument for how Uber is exploitive that doesn't assume the drivers are to dumb to realize they are being exploited.
Similarly in my country (I cannot say for other places) Uber driver's cash on hand is relatively good. But they are independent contractors so don't get a pension and no contribution for disability/maternity insurance. So it's hard for the drivers to actually price those externalities.
So no, drivers are not dumb, when markets are not clearly defined, companies are very good at making it hard to compare their offers with those of the competitors.
https://www.kqed.org/news/10499074/one-uber-drivers-story-ho...
And we have always been at war with Eastasia.
The Shuttle program was started in the 1970s. Reusable launch vehicles have never been considered impossible, merely inefficient.
The magic of Uber is taking those hidden costs and pushing them on the drivers, now the cars get fixed in a much less efficient way, but the ones taking the risk are the drivers, so Uber wins overall.
Pre-Uber/Lift in my city you'd have taxi companies that were operating like a cartel and giving a shitty service. Drivers were borderline rude. You had to call a dispatcher that was also usually rude and then wait 20 mins for a cab to show up.
Uber changed that process for the best by actually allowing me to get a taxi from an app in 30 seconds, they usually showed up much faster and the driver, fearing a 4-stars review, is usually incentivized to at least keep their car clean. It's a game changer and I wouldn't go back.
So no, the magic of Uber is not passing those hidden cost to the driver, it's actually offering a service that I want to use after +40 years of a corrupt industry that couldn't give a shit about improving.
Now that Uber gave them a big scare, they actually improved, but the idea that they would have evolved without an existential threat is madness.
> Uber if anything makes taxis less productive and efficient
Which is blatantly false. Taxi companies were pretty terrible and only got better because of competition. Getting in a taxi and having no idea how much it's going to cost me was a bad customer experience.
I get that the taxi experience was not ideal for you, but Uber did introduce a lot of inefficiency into the livery market by decentralizing maintenance, procurement, and financing. Uber was able to do this while undercutting incumbents on price through a combination of fare subsidies, consuming external capital resources (i.e., asking industry outsiders with "excess capacity" (cars that weren't on the road 24/7) to wear down their own private vehicles), and having investors willing to tolerating large, upfront losses.
Where was this true? This doesn't match my recollection at all, though I did live in a market with dense preexisting taxi and black car services (NYC and SF).
I'm not saying the old medallion system was great, but I thought the cab companies back then owned all the cars. (Source: my in-laws owned a medallion company, and I knew a few other cab company owners in NYC in the aughts.) They would frequently make drivers take responsibility for routine care and maintenance (with the worst medallion companies really stretching the definition of "routine"), but they put up the capital and rented cabs out to drivers at exorbitant rates (e.g., $1500/week in NYC ~15 years ago).
Contrast this with Uber, which imposes the same or worse labor conditions and offloads all capital risk onto the drivers.
We have put a pen and paper onto every desktop and every pocket but almost no-one can read or write.
Edit: And those that can find that only a tiny fraction of the fold is written down (accessible through the virtual cyber world). Amazon's secret to success was forcing every service to live behind a "public" API.
I think it's more similar to any other profession, with a skillset you can learn if you're interested, or learn to get paid.
Not everyone is interested in writing software, and that's fine.
It has also never been easier to tinker with things, as root VMs are cheaply available, in comparison to 20 years ago, when you really were just given a cpanel interface, if you were on a budget.
How many people do you know that refuse to learn the software they use everyday? How many times have you helped a friend or colleague with some problem just by googling it even when you don't really understand what they do for a living?
It's not that we need everyone to create software, but it would unlock huge productivity gains if everyone stopped pasting screen shots into word. Excel might be the most important knowledge tool of our time, and almost no one knows how to use it.
Programmers have been doing GDD* for a while. Other knowledge workers will catch up or be left behind their peers.
I use Excel weekly, but not daily. The last thing I remember googling in it was last week and it was (for the fiftieth time) “excel format as millions”.
* Google Driven Development
I think sometimes it is also the case of knowingly what to Google for, and being able to pick out the correct answer.
For example, recently I was involved in a cache issue for an android phone. One of the answers on Google was to download some sort of cache cleaning program. Of course, I knew that this was likely to be a security risk, but others would have downloaded it.
People are naturally wary about this thing, so sometimes I don't mind if they'd prefer not to Google and implement a solution themselves.
To me this is a part of literacy: how to know what to search for, and how to know which results are relevant.
Could not disagree more. I run a small business selling used video games online, and come from a SWE/EEE background.
The fact that we've got processes in place that are built from the ground up to be scalable and automatable, as well as the simple Python scripts to perform this automation has basically tripled or quadrupled our productivity.
I could see much the same happening for a lot of workers who handle data, and as more people who have learned to code enter the workforce I'm not sure employers will continue to tolerate (for example) accountants who can't write their own report generators.
what a great way to put it
Similarly, you may never write an OS or a AAA game, but being able to just automate a teeny tiny bit of your Excel spreadsheet, that's where software literacy will benefit the most people.
Adding software got easy because development evolved, and supply exceeded demand. The "Internet of Trash" is my go-to example. Modern engineering got so good, and we're surrounded by so much efficient, durable technology that manufacturers ran out of ways to add value. So they started figuring out how to:
1) add internet connectivity whether it's wanted or not
2) control and break things using software
3) extract profitable data from users
All of these just kick the can down the road toward more solutionism without really innovating in the original engineering domain.
This a pure education issue, and that includes eradication of the false education taught by religious backed educational institutes. The magical thinking taught by religious backed schools and universities create mentally constrained individuals who live in a demon haunted world and are dragging down all of civilization.
- budgeting
- to do / productivity
- book / music / video game / etc. media cataloging
- project planning
- event planning
- file storage
- etc
When someone remarked once that most SaaS products are a front end to a spreadsheet, I just thought, “they’re not wrong.”
Now if people had computer literacy they wouldn’t pay $20 a month for a service their computer already does.
Almost all SaaS are about easy cross-device, cross-internet, sharing, which all traditional apps don’t even try to be good at.
How do you fix it when the incentives are skewed towards quick bucks? Government pushing certain industries has worked for China. There'll be a lot of opposition to that in the US I'd imagine.
It is an innovation and banking problem. There are all kinds of feedback loops involved.
The ridiculous amount of liquidity in the global system changes and distorts risk preferences.
It also creates these giant sinks of brain power that are just moving money around. We have had amazing innovation the past twenty years in electronic markets, hedge funds, venture capital firms, cryptocurrency. Think of how much brain power is being wasted just modeling capital structures instead of something actually innovating because there is so much capital moving around that needs to be modeled.
How much brain power is being wasted at hedge funds? I have read hedge fund manager Jim Simons say he thinks he has the best research department in the world inside his hedge fund. It is not that much different than dedicating the best research department in the world to playing better poker. It is an utter waste of resources and we see it all around us with the complete lack of innovation.
Difficult to the article seriously when reading this. (And I did follow the link to read the academic paper referenced. Though I am not in the field, I thought it was terrible. By defining food insecurity down and needlessly conflating categories it attempts to make a real problem seem worse than it is by viewing it through an ill conceived lens.)
So the fact that kids are food insecure on college campuses suggests that it's not a problem with Uberization or the economic model.
They define "Low food security" as "reports of reduced quality, variety, or desirability of diet". Which sounds like a typical college meal plan to me: not particularly interesting or high quality. Calling it an "epidemic" seems to be implying something much worse.
A) There are plenty of students in the goldilocks zone of being from families to poor to afford a meal plan but too wealthy to qualify for free meals from their college. Some of these students are able to qualify for academic scholarships out of high school. The rest take on multiple jobs, including work-study, so that they can afford tuition and board.
B) When college campuses shut down for COVID, many shut down their food halls as well, which affected those students poor enough to qualify for subsidized meals.
Not everybody lives your life. Food insecurity is a real thing for thousands of college students.
As I understand it, public and private 4-year universities in the US usually include meal plans in the financial aid package. Colleges may even force students to purchase (expensive) meal plans to make them profitable.
You may get stuck with oppressive student loans and mediocre, overpriced food, but you shouldn't starve.
You're not entirely wrong about COVID though - it disrupted food services and made it harder for students to get meals. You see students with meal plans resorting to food hoarding and even theft, which they rationalize based on the cost of the meal plan and lack of access.
And we have an economy built on lock-in. No better example that Apple, or perhaps Google and Amazon. These are both ways to extract value from the economic system, not ways to improve it. The Apple Tax, Google Adsense.
And to insert some other examples, Uber has taken a massive haircut, Zoom, etc.
The reality is if you zoom in on a small window of time the market will always look irrational.
But it all comes out in the wash once you zoom out, the companies of the .dot com boom that truly innovated were rewarded for example
Amazon survived, created AWS, and look at them today.
https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma?wpro...
> Economists have long found that they can explain only a portion of economic growth by the growth of inputs to production, such as the number of hours worked or the amount of capital used. The unexplained (or residual) portion, which presumably reflects advances in production technologies and processes, is conventionally attributed to all of the production factors together and is referred to as total factor productivity (TFP) growth.
I don’t think it’s fair to blame Uber for the lack of economic growth for the entire USA.
In addition, the paper referencing the economic slowdown compares 1970-2006, 36 years, to 2006-2016, 10 years. And during those 10 years the housing bubble collapsed. The dates selected appear cherry picked to show the largest decline possible.
The race to the bottom I'm seeing in e-commerce is just hilarious. Great for consumers. Not so great if you are a delivery driver.
Imagine disrupting any industry where some form of accreditation is required by making an app which allows any person to perform those services. Anyone could be a doctor, lawyer, notary, etc. with no license needed. That's not disruption, that's breaking the law until the company is big enough to bribe (lobby) to change the law to allow that. That's literally Über-style "disruption".
Sure, start writing it now. The journey of a thousand miles begins with one step.
Uber is losing money so I don't know think drivers want a slice of the profits.
Is it just cultural inertia, i.e. nobody has tried yet?
1. No prospects of a big payout (IPO, acquisition).
2. VCs like to have a single point-of-contact (the CEO) and few other owners. In a start-up, the CEO is answerable and serves only the investors. Co-ops behave more like a member-driven organization whose obligation is first and foremost to its members.
3. No option for majority ownership. A co-op eventually has to be majorly owned by the employees rather than by investors.
If you are in New York City you can use drivers.coop.
Let's take one fabulously successful/wealthy/arrogant Silicon Valley company – Apple – which helped to improve and/or popularize: personal computers (Apple II), GUI computing (Macintosh), laser printing (LaserWriter), laptops (Power/i/MacBook), digital photography (QuickTake, iPhone), MP3 players (iPod), Wi-Fi (AirPort), smartphones (iPhone), app stores (App Store), tablets (iPad), smart watches (Apple watch), etc..
Silicon Valley also helped to create many beneficial advancements in the areas of: microprocessors, digital storage, the internet, the world wide web, video conferencing, digital and online games, streaming media, automatic translation, etc..
I would imagine that the author appreciates at least a few of these technologies and would not wish to give them up.
Moreover, the claim that productivity has not been increased by computing and information technology seems to have been largely refuted:
https://en.wikipedia.org/wiki/Productivity_paradox
However, the claim that Google and Facebook are disruptors rather than innovators is interesting. I don't think he's talking about disrupting AltaVista and MySpace, but rather disrupting the sale of advertisements and media (newspapers, magazines) that depended on those ad sales.
That was probably tens of thousands in spend on overpriced delivery meals making them huge profits off the initial "investment" they made in this customer
Of course the promos dried up and the pricing became awful not too long into the process.
It is so tough, like beyond just the general psychological toll of your rent being a gamified award, there is little reprieve. No vacation, no security at all.
I have had so many jobs, and being a GrubHub deliverer is perhaps the most alienating, and in long term, exhausting ones ive had. I used to think "well at least people can have flexible jobs, use their vehicles", but these days I just so no reason for labor to ever be like it for anyone. Its not a model that thinks about the actual worker at all.
I've done gig driving work in the past and still pop in on driver forums once in a while. The majority of these people are lucky to make $10-15 an hour after expenses (less now with rising gas prices, which they don't get compensated for), and a large percentage of them are operating below that. The ones making actually decent money have either figured out how to game the system - which is a transitory phenomenon as operators figure out ways to claw that profit margin back - or found some kind of luxury niche which requires having an upfront advantage like an expensive vehicle.
The perks of 'setting your own hours' (which is basically a lie, if you're relying on this income you have to drive when there's demand) or 'not dealing with a boss/co-workers' (your clients are your bosses and plenty of them are horrible) really pale when you look at the overall reality. Such so-called perks are how they keep suckering math challenged drivers into a crap job with abysmal pay and no benefits, though, and despite the fact that they're an illusion it keeps working. There are huge numbers of drivers whose actual compensation is so low it would nauseate you.
It seems like so many of the apps that come to dominate just make up for shortcomings unique to the US that then, with money, take over the rest of the west for no good reason other than scale to get 25 people at the top of those companies rich.
I’ve never seen the need for Uber. Taxis have never been an issue in the UK and the most successful firms in the city I lived when Uber was starting out already had apps. Literally the only thing Uber had going for it was masses of money to undercut the market and advertise to younger millennials - basically their excess money allowed them to get better distribution and cheat the market.
I’ve used Uber three or four times in my life and each time was a worse experience than a taxi.
US payment systems lag the rest of the world massively - particularly the UK
Still way more friction than Uber where you setup a payment method in the app once and no actual payment is ever required to the driver, pretty much anywhere in the world.
Also:
1) how do you tell the driver where you want to go? I've found this to be a major PITA with many cab fares, especially if you drive to unusual destinations. I've met many a cab driver that simply are incapable of using google maps. Case in point: a month ago in a small European town where Uber is banned by the local thugs who run the town, I give my destination to the driver at the cab station, lo and behold, he proceeds to spending 10mn first asking and then arguing with his colleagues in the local patois how to get there. I tried to step in to show them on my phone, they basically ignore me, because they obviously know better. The fact that I;m in a hurry is the least of their concerns. Ugh.
2) How easily and quickly can you get cabs to pick you up exactly where and when you want, especially if we're talking less than 10mn delay? In a big city like LON that might not be a problem, but from experience, and I'm talking about European capitals, and smaller cities in the US or Asia, this is *way* worse than the Uber experience.
Quasi-frictionless and immediate, which - in my book - makes it a winner in spite of them having a despicable corporate culture.
The price considerations are a different conversation, but AFAIC, I'm certainly ready to pay more for an Uber to get to that frictionless transaction.
The day a cab ride is as easy to setup as an Uber ride, I'll very gladly stop using Uber.
But in most places, that simply isn't the case.
Uber introduced competition which has massively improved all other taxi services. These days there's nothing special about Uber except its ubiquity so I don't care if it fails now. Ofc this doesn't excuse their illegal practices.
Last time I tried to get an Uber in central London in the early hours of the morning two or three drivers cancelled before one eventually showed up after I'd phoned Uber support to complain. I'm not sure the phone call is what did the trick - in fact I'm pretty sure it wasn't - but what triggered that call is I'd been trying to get a ride for 20 - 30 minutes by that point. It sounds like this kind of poor QoS might be a new problem though: I certainly wasn't aware of it before the pandemic.
I live in SW1 and end up in these situations on a weekly basis, I’ve never waited 30 minutes for a Uber.
Utterly false. They produced people taking way more rides. More rides = more people going out to different places.
E.g - a reduction in the price of wheat will increase food consumption even after accounting for people switching from other crops. Conversely, an increase in the price of Lego will reduce the amount of toys the average child gets, even after adjusting for the substitution to action figure etc.
I think the logic is to own the portal to taxis and become a gatekeeper, by being the only app that the user has installed for hailing taxis. So the barrier to entry becomes large because you have to convince people to install your app.
There's still a speed-bump, but it isn't as jarring.
I just checked with my friends too and not one person remembers using an app to call a cab before uber. It is possible that some company possibly offered it but it certainly wasn't a popular option before Uber and it was just awful using the taxis here.
I agree that Uber injected some fresh energy in a somewhat complacent market, but the real "innovation" with Uber is with its business model ("employees but not employees") and willingness to just ignore local laws. This I think is the real point of the article; for all the pompous bloviating about being "disruption" and "changing the world", the actual real change is actually not all that large, with many of the changes being of doubtful or even negative worth.
It's more than just a substitution of tapping an icon vs dialing a phone number.
The Uber business model of non-medallion cars and geographic matching algorithm builds up a "distributed mesh" of drivers to serve passengers -- especially those who are not at typical taxi "hubs" like airports, convention centers, downtown hotels, etc.
Before Uber, getting from one suburb to another suburb using a taxi was unreliable. A traditional taxi dispatcher can broadcast a ride request from a potential passenger in the suburbs but drivers can ignore it and wait for the more lucrative airport-to-downtown ride for $50. Why? Because the taxi meter only runs when that passenger is in the car so it punishes suburb-to-suburb trips and instead, incentives them to wait for the longer airport trips. So hub-to-suburb and suburb-back-to-hub is "dead time" the drivers are not paid for.
A traditional taxi company -- even with an app -- doesn't build that geographically distributed mesh to the same degree. The economic constraint was the taxi meter.
When I was stuck in some distant suburb and had to use taxi companies, the way I "hacked" them to reliably come was to tell dispatch to tell the taxi driver I will tip an extra $20 for the ride. Basically, a form of bribery so the taxi drivers wouldn't ignore the dispatch call.
I find this interesting because on the food delivery side, this is kind of mental gymnastics the worker needs to do. If it is a busy evening hour, do you want to take a (small) McDonalds order? Most likely not, unless there is a nice tip. You could do at least two deliveries in the time you wait for the McD order.
I imagine rider side is the same way as delivery. Every worker has to do this sanity check if whether something is worth doing.
If workers are taking low reward rides or deliveries, it is probably because they think they aren't missing out on something better.
Isn’t it the same for Uber? They don’t get paid to get to your location so the only advantage as a driver is being picking up someone in the area you drop off another passenger. Dispatch worked similarly but it had its limitations of its time.
One thing that was not possible that Uber does is ride sharing.
That's why the GP talks about a "distributed mesh" of drivers. There's simply more Uber drivers than there have ever been taxis in most places. So in the age of Uber if you're in a suburban area there's a high likelihood there's an Uber driver near you. So there's a small amount of unpaid driving time for the driver. There's also a decent chance of them finding a return passenger at the destination thanks to a similar increase in the number of potential riders vs taxis.
Most taxi companies in the suburbs would be a flat rate that the dispatcher would tell you before you got picked up (or the driver would ask the dispatcher curbside), they often didn't use the meter.
In some ways it does though. Some industries corner the market through regulation. Ie it's impossible for a new competitor to start up that follows all the rules and it's that way by design. The only way to break into that market is to break the rules or buy out an existing business.
Living briefly in London taught me that you cannot reasonably expect a hailed taxi to take you from A to B no matter how hard it is raining or how obviously pregnant the person you’re with is, if the taxi driver doesn’t fancy going to B, even if B is still within 20m of A.
Living for far longer in Edinburgh taught me that the credit card machine is manufactured by the same company that sells McFlurry boxes to MickeyD’s. This was still true when I visited Edinburgh again 3 months ago.
Uber seems to me to be abusive to their drivers. And occasionally to their passengers. But there’s a good reason they were so successful early on. They made my life, as a customer, better, easier, simpler, less encumbered with bullshit.
The old way was awful and Uber got a hell of a first mover advantage.
FWIW, I actually agree that the "Gig Economy" is riddled with problems, but at least in the case of Taxi's where Uber started, the existing system was rotten and in need of replacement.
many drivers were first generation immigrants.. owned homes in queens, were putting kids through college, looking at their name come up on the medallion wait-list in a few years as a retirement.
all that stopped with appcars.
but i suppose if the only constituents you really care about are customers, the people getting rich writing dispatch/billing software and the people facilitating the construction of a massive venture capital fueled duopolistic takeover of an entire industry, this works too i guess.
most drivers i spoke to seemed to like the medallions as they offered some long term investment potential and a sort of seniority reward. there was of course big capital at play, but drivers could have complained to the tlc... what can they do now? file a support ticket?
Meanwhile, many of those immigrants were working off of someone else's medallion for peanuts, so the medallion owner could book Nicki Minaj for his kid's bar mitzvah.
i think total rent for a car was something like $260/day and $280/day with medallion. (i think this also includes insurance)
remains to be seen whether this is better than encouraging drivers to go out and buy a late model car on personal credit.
regarding the boroughs, you had to know how to live in the city. any bodega, bar or restaurant would have the number for the nearest black car dispatch and would often call for you... pickup was usually within 5 minutes.
anecdotally: yellow cab drivers often seemed like financially stable professionals who were often raising families and in a good financial position. uber drivers always felt like temps. black car bases throughout the boroughs were often small and family owned. again this is anecdotal, but i like talking to people.
That's exactly what happens now
https://www.wired.co.uk/article/uber-upfront-destinations
> Not to mention that with Uber you know exactly when the driver is coming
Not any more, they cancel
The fact that I can often use Uber abroad is a massive bonus. It's almost a guarantee that you're going to be ripped off when using taxis in a foreign country.
If something was critical I would never use an Uber - I’d rather walk, or cycle if a traditional taxi wasn’t possible for some reason.
I don't doubt that you have had bad experiences with Uber, and also that other people have. But you would find it very hard to convince me that people have better experiences with non Uber taxis on average.
Looking at the app store reviews in the UK of Uber, sorted by most recent
1* - Lost my trust
1* - Has gone downhill
1* - Uber Scammed me
1* - Can't get an Uber anymore
1* - The worst experience I have ever had
2* - Uber is deteriorating
2* - waiting times have increased
3* - Cancelled rides
1* Deteriorated over lockdown
etc.
All referring to the same problems I see, rides accepted by drivers, then cancelled a minute or so later.
Going further back, full of 1/2 reviews:
A sad Decline, Slow at finding drivers, Getting worse by the day, Scheduled trips are canceleld, Getting worse & worse, Most unreliable, etc
Maybe the occasional 3* but going back 6 months, "Uber is dead, No Longer the no 1 ride in London, Drivers keep cancelling, Cannot get a booking, Never any drivers, Never turned up, 1 star is too much, used to be great", etc. etc, those were back to October.
I'm not sure how long it's been going on (the same complaints go back at least a year on the reviews), but Uber don't seem to exist any more, otherwise they'd be concerned and change something to fix it.
I'm not surprised to see no good reviews. I can't imagine people going out of their way to leave good reviews for Uber at this point. Their overall rating is 4.5/5 though
The overall rating is based on the last decade of reviews
The article cites a study on (USA) GDP as a metric measuring of productivity, however, GDP is a poor proxy measure of "things being produced". USA GDP includes financial services and consumer spending, so using debt to pay for things vs. producing more, can still boost GDP.
In the United States, pre-Uber around 2010, it was very hard to find cabs in certain cities and even neighborhoods in those cities. New York City had no problems, but as I had lived in Chicago and San Francisco with lower population densities compared to top tier cities in the world -- the only way to get cabs even a few miles outside the main downtown area, was to call taxi dispatch, if you knew their number -- it was even hard to look it up online -- and schedule a pick up, which usually took 30min+. The US taxi system was stalled at the time, and Uber forced it to start adapting to the smart phone era. The tragedy is that the people investing in and also running uber had their own pyramid scheme instead of pricing out the business correctly. They also didn't consider the social/gov implications -- places with good taxi systems didn't need them, as you alluded to with the UK, but they shoved into it anyways.
So Uber was an innovation, one that is trying to find its financial balance still. I'd never care to schedule another taxi pick-up for next morning, 16hrs in advance when I want to go to the airport.
But the article saying that uber innovation and having others try it on other industries is stymying productivity isn't completely correct either.
And as far as I know you still can’t book an Uber for the next day or whatever.
At least here in Berlin, when I book via Uber, I'm told more often than not that it won't be an Uber picking me up but a normal taxi.
It seems like the benefit of Uber was that it provided better service for many who didn't have the superior taxis in Newcastle.
If all the other replies (including some UK ones) in this thread contradicting your personal experience don't convince you, would that be a form of solipsism? (https://en.wikipedia.org/wiki/Solipsism)
Now instead of having this patchwork, we have one giant monolithic taxi provider (Uber) that threatens both the good and bad taxi services of old. And because Uber is more than happy to subsidize rides thanks to VC funding having an equal/superior experience is often not enough to compete.
A very bold claim. I am not sure about the finances of Uber and how it impacts shareholders vs employees and how many people are getting rich off it, but let me tell you that services like Uber have been a God send as a consumer. The haggling with old school taxi drivers is one of the worst experiences one can have, not to mention that you have no idea what the prices should be if you are not local.
Uber and similar apps remove all that nonsense. You can disagree with their business practices or even how much they charge, but I hope apps and services like Uber do not die, EVER. I don't want to go back to being harassed by taxi drivers.
Take, for example, Hailo: https://en.m.wikipedia.org/wiki/Hailo.
They were available in London before Uber, and they had an entirely different model where they just franchised the technology for people in each city to use.
They were profitable, and were driven out of existence by Ubers blitz scaling, which still hasn't produced a profit :(
Every time I call an Uber in London, an extremely professional and courteous driver shows up within a couple of minutes in a Mercedes S-class or equivalent, at a price only slightly above that of a black cab.
I doubt that you can find a better taxi service anywhere.
If we want a functioning market, let a bunch of little guys show what they can do, don't let one huge guy scare everyone else away.
Tried it again that evening and it failed -- multiple times the ride would be accepted, then cancelled. Ended up walking.
Looking at recent reviews for the Uber app it seems this is common, Uber has gone from being somewhere reliable I can get a cab, from Sydney to San Francisco to Singapore, to being something that can't be relied upon
It's incredible spending time in the undeveloped/developing world - all the problems and solutions that "gig" apps supposedly are good for live on to this day all over the world.
Need a place to stay? Ask around the village and someone will be more than happy for you to sleep in the spare room for $1/night.
Need a ride? Wait where the locals are, you'll get in a communal "taxi" with locals for 10 or 20 cents to the next town.
In the Western World there are apps for this kind of thing that funnel profits to mega corporations. In the rest of the world there are average people on the street doing it every day as part of normal life.
Out of curiosity - where did you have such experience?
Real people out there are much friendlier and welcoming than seems possible.
I landed in India or Brazil a few times, with language familiarity limited to "bon día". Without local sim card. This trip would be orders of magnitude harder without Uber and similar.
> Anybody who’s ever taken an Economics 101 course knows
clearly has no idea what they're talking about. Real market are far more complex than what can be described by Economics 101
Gotta start somewhere, I guess - but I'm just afraid that because I'm nowhere near an expert that I'll be bamboozled by someone with legitimate qualifications, but without realizing that they're actually still not qualified to speak about the subject either.
Extremely well executed startups does, which of course requires a team in just the right milieu and timing.
(I assume you meant "feature-phone" there?)
You should tell your SA friends to reach out to some tech journos, they'd love to write a "Uber before Uber" story, and I'd like to know the reasons why their project didn't pan-out myself. SMS-based applications had a lot of potential in the mid-2000s, often the failures were elsewhere, and doesn't SA also have SMS-based billing too? that could have been an amazingly successful service...
The 2007 to 2012 period was a perfect storm of bringing together connectivity with never before utility from newly developed devices, and if you were in the right place at the right time to stake a claim, then you had significant first mover advantages.
It was discovering new land that had not been settled yet, similar to when computing and society advanced to allow for computers in every home, and then internet connectivity, and then finally, 24/7 computing plus internet computing in your pocket.
Of course, having deep, deep pockets to hire the people at the forefronts of this land rush is also a huge advantage.
I just realized that GPS was probably the reason: I remember my first time using Uber and it was the fact you could see the location of the car and yourself on the map in real-time, and so you could easily get to the car without the usual hassle of trying to locate and identify each other. That's just not possible with SMS (even if a phone did support GPS, I've never seen anything like "send coordinates by SMS" on a feature-phone, and even if the server could render a map it wouldn't be downloaded in real-time to be useful.
...though if it was a Java mobile app for each platform, that might have worked (even over GPRS), but considering how expensive mobile-data was at the time, hmm, yeah.
Yeah, if I had to guess, it was so extremely hard for them to recruit taxi drivers in South Africa. The metered taxi industry has always been extremely untrusted (my personal opinion), and basically non-existent.
They approached these guys and also the hand full of companies that existed back then, but it really wasn't until Uber established a trusted driver experience that we really started using taxis on a daily / weekly basis. So they simply did not have the funding / momentum to establish such a large scale transition in transportation and consumer trust within SA.
For years prior to Uber, the segment for "upper / middle class" public transport was not served and for sure not accessible. You could phone a cab company in Cape Town and get a taxi, but then it was super expensive and that was basically the only option – service which was also not available in most other cities.
When Uber arrived, they (and other companies) helped jobless drivers secure funding for cabs and within a year or two there were thousands of drivers, cabs and Ubers in all metros.
For the first time, when I had to go to the airport, I could get a Uber instead of asking a friend to drop me off. Crazy but this was the reality.
They create research that is used by politicians to justify them creating a policy they'd already decided to create for political reasons. They manufacture consent.
What did Chuck Colson want to do to the Brookings institution again?
The first sentence of the wikipedia page for 'thinktank'.
Venture capital ought to have it's hand on the pulse of technology. The most impactful tech of the last 5 years, with massive societal and financial returns, was mRNA vaccines. Yet I've never heard VCs raving about them. As soon it touches physical world, it gets shunned by investors
Open source knowledge is literally the greatest thing since sliced bread. By some odd chance, a few people at Sun open-sourced Java and literally changed the world for the better. Look at the productivity and opportunity that is now available to everyone because of it. Look at how it spurred real competition and gave birth to new technology. It lit a fire under everyone's ass! One small example of how unleashing academic innovation can help lift everyone.
Commercial airlines are building on top what Wright brothers did and just grab easy money instead of figuring out how to fly people to the Moon.
No one is accusing them that we don't have a Moon colony because they are doing what they do.
Author is accusing application operating company that there is not enough innovation because of them. So it seems author just took Uber marketing division where they shout about "innovation" seriously.
There are companies that are doing actual R&D and Uber is buying services/goods from them, so it is like Southwest buying Boeing planes is actually paying R&D costs of coming up with better planes.
Also author is making point that somehow there is not enough innovation - well I have different point of view - whole innovation happened and made it possible to operate something like Uber. Smartphones and mobile connectivity with GPS is the innovation that was not as widespread 20 years ago, heck even 10 years ago things were still starting up.
I mean so did VCs, the tech press, new CS graduates, and Silicon Valley in general.
1920 - 1970: Technology = Solution for a Problem At Hand
1970 - present: Technology = Solution looking for a Problem to Solve
In the books he defines "innovation" as a novel solution to an important problem, but highlights that "important" is subjective. What one person think is important may be different from what another person thinks is important.
This subjectivity is exemplified in the top comment in this thread. The commenter believes "AI/ML research" and cashierless checkout from a single company are examples of innovation. This confused thinking is perhaps a contributing reason that today's faux "innovation" is able to gain traction. The top comment believes research is innovation. Further, the important problem to be solved in the opinion of the commenter is the existence of cashiers, not, e.g., how to increase their productivity.
Methods of increasing profits and solutions to important problems (=innovation) are not necessarily synonymous.
To him the reason platforms exist as they do right now is because they constitute a fundamental shift away from market capitalism to what he calls techo-feudalism.
Instead of thinking of companies like Uber as selling software and paying wage labour to generate profit, it makes much more sense to think of it as a fiefdom that extract rents directly from its users outside of markets, maintains unpaid or barely paid labour, essentially a techno-peasant class, and is funded by barons in the form of VC capital directly and the state indirectly.
Through that lens for the first time to me it made perfect sense why it isn't so absurd to have gigantic companies that barely make any profits, have no differentiated products or much of a workforce. The point of these new businesses isn't to dominate markets and sell things at great margins, it's to claim territory, extract value and then use that control to directly command users on your behalf.
The major characteristic of feudalism was that power centers deteriorated and power was distributed to local lords insted of central kings. So how is having a single gigantic company more like feudalism?
Lastly, why come up with such convoluted theory when "too much speculation due to cheap debt" explains everything with much less gymnastics
because those are not the same thing. Feudalists don't extract surplus wage labor, they extract direct tribute from their subjects, and just like that the entire value of Facebook say, is in what its users produce on its platform. That experience is the actual rent they collect. Ever wondered why all of this stuff is free?
And power is deteriorating. Away from the state, which played a central role in organizing and managing the traditional market economy towards these private spheres of influence of which the principal unit is the tech-firm.
This stuff is free because Facebook is an advertisement company. I enjoy a good conspiracy as well but at least it must be somewhat entertaining.
Just as it was possible for a medieval king to have terrible finances by spending more on war/security than he collected in rent from Barons, a tech company can lose lots of money by spending more on customer acquisition/platform maintenance than collected in rent from suppliers.
You could argue similar structures exist outside of tech in Walmart’s supplier relationships or Standard Oil’s railroad arrangements.
Also, the methods used by these companies to “claim territory” often does seem to create innovation. The gmail web app, WhatsApp etc create a lot of customer value despite being used for territory expansion rather the collection of direct revenue.
Yup
And in most of the gig economy, it appears that that the only winning move is to not play. The exceptions are only certain circumstances such as where one can do arbitrage between economies, e.g., computing nomad living in a very low-cost economy but selling services in the US or EU. Otherwise, every account I've read of Uber/Lyft drivers is which way they are losing the most money after being lured in by promises of good income...
For example, taxes. We already have tax software. It's still a pain. If we want to fix it, we have to fix the underlying government system of laws and regulation.
Another one is healthcare. There is innovation there, but again the laws and regulations dictate or allow a lot of the negative behavior
Try the fact that the middle class has been gutted by an unfair tax structure that shreds responsibility away from the wealthy and corporations and has created peripheral damage in high college cost and low public school expectations.
Bring back the tax rate where people making over 540k (the 1980 equivalent of the top tax rate $225,000) pay 50% on anything over that amount. In 1980 it was 70%. SEVENTY PERCENT.
If we raise the top tax rate, we pay for infrastructure, college, teachers that can teach critical thinking instead of how to pass a test. The middle class can chill out and raise a family, take a vacation, save for retirement, and not live pay check to pay check. We rebuild the middle class.
What happens if college goes back to a Pell grant and a part-time job cost? INNOVATION. People will have the ability to think freely and be creative. They won't be forced to figure out a career at 18-21 years old.
Guess what else we do? We start paying down the national debt for once and actually reducing the debt ceiling.
Our tax structure is insanely out of balance. That's the number one core problem in the United States.
The long-term capital gains tax rate, for those in high tax brackets, is 20%.
Go ahead, set the income tax rate for high tax brackets to seventy percent. It won't actually make a difference.
A functioning society requires a large and happy middle class, affordable liberal arts college, strong K-12 teaching, and time off.
> Our tax structure is insanely out of balance. That's the number one core problem in the United States.
This is actually even worse in many places in EU. I completely agree with your diagnosis and would also like to see your solution implemented.
I have an impression, taxation here in Europe is used as a political tool to play middle class and lower class against each other. And whatever the crisis, the middle class is expected to foot the bill. All the while, the powers that be use handouts to lower class to pacify them (prevent a revolution?)
All problems are down stream of voting rights, gerrymandering, and first past the post / non-proportional representation
Limit that to no more than $1000 per natural person per year and make it illegal for entities that are not natural persons to contribute any money (PACs, companies, etc).
Contribution to political campaigns should mostly be by time, volunteering to work for a campaign.
How do you know that? What are your qualifications?
Yes, you're right, Uber is not particularly innovative. Neither is the pizza place down the corner. They're both a business that's trying to make money, albeit at different scale and via different products.
But the existence of the pizza place doesn't prove that there aren't companies creating innovation. Neither does the existence of Uber.
Also see the entire economy is MoviePass now:
And, ranting, it is still quite possible that Amazon/Google/Facebook are going to lose the super profits in the long term. Which to me means 2030+, 2040+ as the market matures. Google is probably a bit more secure in that they have to commit suicide to lose money (which they will eventually, every company gets bad managers sooner or later). AWS on the other hand faces a risk of being chipped at from all angles by specialised providers. They do not have a magical spell that can resist the market moving towards the marginal cost of production. Facebook lives in a world where staying power is the exception not the norm, they came after numerous other competitors that fell apart under the complexity of managing social networks. They are all but guaranteed to fall in time too, they are in a delicate position where it takes one bad CEO/Director of Misinformation or some Chinese upstart that won't sell out and the whole thing could fall apart.
This article isn't about disruption, this article is about the gig economy.
A completely free market economy is rife with undesirable downsides, so it's necessary to introduce regulation. Regulations in a capitalist system is rife with regulatory capture usually used to artificially restrict supply. Regulatory capture needs to be disrupted. Disruptors quickly become rent seekers (nice system... shame if something should happen to it). The way around disruptors is to innovate, until the capitalists seek to capture regulations on the innovative.
It's a dynamic system constantly seeking equilibrium. It's not perfect but it seems to be working OK.
I'm in London and I'm not talking about black cabs for ref.
And don't even get me started on Uber Eats which universally delivers cold, damaged food which is twice the price of going in the store and their customer support is so bad that it's nearly impossible to get a refund from them now even though it was 2 hours late and looked like it'd been delivered in a washing machine on a spin cycle.
However this seemingly happy story has a few important downsides. First, to a large extent these technologies do not create new markets as much as they disrupt or displace old ones, which is one reason why productivity gains are so meager.
No. They displace old industries by introducing technologies and processes that made them more productive. People use them because they provide a higher quality service at a lower price.
And all three of the examples he provided: Amazon, Google and Facebook, have been enormously innovative, and created entirely new markets. I could write a long essay on the markets that had their emergence faciliated by any one of the three companies listed.
What's worrying is that such an obviously misinformed article could be held in such high esteem by so many on HN.
Ultimately this is an era largely of the conglomerate, it doesn’t matter who you are unless you’re one of the big fishes. Media, Advertising, etc. Its no longer small shops that are creating interesting and useful things, at least not at the rate they were. It’s more likely to be an expansion out of a big company into a marketplace trying to sip an audience than it is a disruptor changing any of the game. The disrupters that exist must get and stay large as fast as possible as well.
I’m looking for things that don’t scale. I think we’ve basically poured all societies money into anything that might scale. We’ve found we have run out of those things. And all the problems we have left are things like education, homelessness, lack of meaning, healthcare, etc. All problems so entrenched I’m willing to say at this point they can’t scale, and therefore won’t be solved. Maybe the next technological revolution will be a social dynamic. Who knows.
Yes, Ubers are more expensive than taxis in some cases, but in many other cases, they can do things that taxis can't.
Like what?
https://help.uber.com/riders/article/vouchers-for-events-faq...
It was $30 for the slowest uber or lyft before tip. Taxi fare is $2.60 + $1.70/km, so it would have been around $10 to make the 3.5 mile journey. There used to be enough taxi's in the area to just hail one.
Hoorah to that!
We need a "cultural revolution" that let's us catch up with our technological advances. New forms of digital literacy will change the idea that any technological advance is good for its own sake to seriously asking "what for?" of any technology.
Mere "efficiency" and "inevitability" will be seen as dumb reason and forms of technological ignorance.
Intelligence amplification (IA) will usurp "artificial intelligence" (AI), putting human agency ahead of laziness and "convenience".
For now I think we have to go through this runaway period of technology, to get it out of our system. Let's hope it doesn't kill us.
You forget just how terrible the taxi industry was prior to Uber. I would walk for miles rather than take a taxi. I would gladly pay 2-3x more for an Uber than taking a taxi. There are signs that traditional taxi companies are waking up to their enormous service issues, but it only took their imminent demise.
But like, the taxi meters are just so damn cheap compared to what ubers are nowadays, and thats with $6billion in losses per year. $30 is too much to go just 5 miles in 15 minutes.
* "My card machine is out of order, only cash."
* "That will be $[some outrageous and clearly fake meter amount].
* "My meter is broken. I'll just estimate it."
* "There is a $10 surcharge for luggage" / "there is a $5 surcharge for that neighborhood" / there is a $10 surcharge for cards." Bonus points when they only tell you after you arrive.
* Driving me the long way. This happened ~25% of all of my trips. It was particularly egregious before mobile phone GPS became ubiquitous.
* Unsafe driving.
* Stinking / dirty taxis
* The cars took hours to arrive, and often never arrived at all. This is probably my biggest gripe. If there is one thing I require, it's efficient transport from A to B. If they can't even do this, they shouldn't be in business.
I can count on one hand the number of times I've had any of these issues with Uber. I do agree that the price gap between taxis and Uber is increasing, but I gladly pay it. As above, I would gladly pay 3x more for Uber, so until the price difference arrives there, I'm sticking with Uber.
out with globally centralized service dispatch and paupers doing the work on unencrypted user data siphons and in with decentralized identity, reputation and commerce systems that sell to small business.
tools so small business can be as good as uber, everywhere.