Uber

This will go on for some time. Let’s start here:

uber-driverless-drivers

Beginning today, a select group of Pittsburgh Uber users will get a surprise the next time they request a pickup: the option to ride in a self driving car.

The announcement comes a year-and-a-half after Uber hired dozens of researchers from Carnegie Mellon University’s robotics center to develop the technology.

Driverless? Note the drivers.

However, all is not necessarily well with Uber:

When Ayda Valilar first read that Uber was losing billions of dollars, she couldn’t believe it. She’d been driving for the ride-share service for nearly five years, and had tried unsuccessfully to organize a union in Los Angeles with other Uber contractors. How could a company that had so adamantly played Goliath to the drivers’ David be so deep in the red?

Comments from various parties on the net:

# Cutting through the hype and verbiage, Uber created a passably good app and backend to support it, (from a software quality perspective).

However, it’s not, and was not that difficult to call a cab in any largish city, their ‘innovation’ was to remove the need to know, or have a means to look up, the number to call, and to potentially reduce the waiting time. As a USP, this is not a big deal to anyone but a hipster.

What they then did was to walk roughshod over any local laws regarding, and permits covering the transportation of passengers for money, and to sign up any interested Tom, Dick and Harry as Uber drivers. Mini-cabs gone mad and universal in the UK model/vernacular.

These drivers were paid as little as the traffic would bear, and were part-timers/contractors to avoid employee related overheads, as well as any business overheads in that field.

To the right sort of people however, they are ‘sticking it to the man’ and undercutting the filthy capitalist pigs overcharging for their ride. In reality, they are simply initiating the race to the bottom, as it’s yet another, ‘We’ll all take in each others washing’ type company.

Note also that their cash pile is allegedly increasingly employed in fighting lawsuits left right and centre, and on subsidising their fares, rather than, or rather because, it’s the only way, to ‘advance their business model’.

Disruption Jim, but not as we know it.

To quote the article – ‘The company is primarily engaged in buying a monopoly to justify its status as the highest valued start-up on the market. ‘

But at the end of the day, when the dust settles, they have no product, or assets, other than some software. Their valuation is as close to nil as makes no difference. There is no there, there.

And to quote management and investors –

‘That Uber has managed to corner roughly 85% of the ride-share market and achieve a $69 billion
valuation are proof enough that things are going well.’

Can you say,’Circular argument?’ And doesn’t that just fill you with confidence?

The ‘on demand’ economy is a figment of the imagination of millenial bubble workers who want everything to be geared to cater to their every whim, without any effort on their part. That naturally, is not the way most of the world works outside their tiny bubbles. Remember the washing and dry-cleaning startup we looked at a week or so ago?

Same thing.

# The “clever” part – in the minds that conceived Uber & Washio [the dry-cleaning start-up] – is the fact that the start-ups act solely as scalpers middlemen, taking their percentage off both the purchaser and seller of the service.

This back-slapping admiration is, of course, limited to the space defined by their own egos.

And when the user’s money runs out – and the users of the “convenience” service find that they can no longer afford to pay the 20% premium for the “convenience” – the “convenience” business model starts collapsing.

Plus the people doing the actual work find that by innovating (collecting/delivering laundry, staying open later, etc.) they can meet the challenges of “convenience” service.

And so another start-up dies. And, once again, Warren Buffet is proved correct.

Incidentally, the entire “convenience” service is another travesty that can arguably be blamed on Google. They started providing their employees with services such as food/laundry/etc. simply to give the employees no reason to leave work “early”.

BTW reminds me of the time I was approached by a theatre ticket scalper in London.

Quoting an inflated price he added “… and if you don’t buy within the next five minutes the theatre doors will be closed you won’t be allowed in the theatre”.

In return I quoted the cover price, adding “… and if you don’t accept my price within the next five minutes the theatre doors will be closed and the tickets will be worthless”.

I enjoyed the show; “Chess”, starring Elaine Paige.

# Let’s not forget either – ALL of the profits and such are solely from them acting as rent seekers and middlemen and by arbitraging existing players – the existing suppliers – as well as their own ‘workers’. There’s plenty of disruption, but no innovation, other than the app, and their imprimatur.

And lastly:

# Rejoice in the triviality –

http://www.iplanner.net/business-financial/online/how-to-articles.aspx?article_id=business-model-uber

Minor details –

http://www.nytimes.com/2014/12/03/upshot/new-york-taxi-medallion-prices-fall-again.html

http://www.bloomberg.com/features/2015-taxi-medallion-king/

3 comments for “Uber

  1. Lord T
    September 22, 2016 at 11:16 am

    Capitalism in action. It’ll sort itself out and we can all be happy.

  2. Voice of Reason
    September 22, 2016 at 1:49 pm

    I heard recently that Uber has actually buying cars for drivers, because many of the potential drivers cannot afford their own.

  3. September 22, 2016 at 2:34 pm

    Goodness me.

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