@bgedelman: Uber Can’t Be Fixed — It’s Time for Regulators to Shut It Down

Jacob’s golden ladder
Get’s slippery at the top
And many a happy-go-lucky saint
Has made that long long drop

From Step by Step, written by Jesse Winchester

Many have forgotten that Travis Kalanick was a founder of Scour, the illegal peer-to-peer file sharing service that declared bankruptcy in 2000.  According to the LA Times,

“[Scour’s bankruptcy] filing puts the company’s daunting legal and financial troubles on hold and gives company officials time to develop a plan of reorganization that ultimately must be approved both by its creditors and the court. The company has more than $100 million in debt, and estimated its assets at between $1 million and $10 million, according to the filing in federal Bankruptcy Court in Los Angeles.”

With this ignominious destiny in mind, read Professor Ben Edelman’s analysis of Uber’s (and Lyft’s) fatally flawed business model and think about how you could substitute “Scour” for “Uber” right up to the bankruptcy part—for now.  If the Dot Bomb crash taught Silicon Valley anything, it should have been how Dot Bomb fall down go boom.

From many passengers’ perspective, Uber is a godsend — lower fares than taxis, clean vehicles, courteous drivers, easy electronic payments. Yet the company’s mounting scandals reveal something seriously amiss, culminating in last week’s stern report from former U.S. Attorney General Eric Holder.

Some people attribute the company’s missteps to the personal failings of founder-CEO Travis Kalanick. These have certainly contributed to the company’s problems, and his resignation is probably appropriate. Kalanick and other top executives signal by example what is and is not acceptable behavior, and they are clearly responsible for the company’s ethically and legally questionable decisions and practices.

But I suggest that the problem at Uber goes beyond a culture created by toxic leadership. The company’s cultural dysfunction, it seems to me, stems from the very nature of the company’s competitive advantage: Uber’s business model is predicated on lawbreaking. And having grown through intentional illegality, Uber can’t easily pivot toward following the rules.

Read the post on Harvard Business Review

Must Read by @ElizKolbert: Our Automated Future

How long will it be before you, too, lose your job to a computer? This question is taken up by a number of recent books, with titles that read like variations on a theme: “The Industries of the Future,” “The Future of the Professions,” “Inventing the Future.” Although the authors of these works are employed in disparate fields—law, finance, political theory—they arrive at more or less the same conclusion. How long? Not long.

“Could another person learn to do your job by studying a detailed record of everything you’ve done in the past?” Martin Ford, a software developer, asks early on in “Rise of the Robots: Technology and the Threat of a Jobless Future” (Basic Books). “Or could someone become proficient by repeating the tasks you’ve already completed, in the way that a student might take practice tests to prepare for an exam? If so, then there’s a good chance that an algorithm may someday be able to learn to do much, or all, of your job.”

Later, Ford notes, “A computer doesn’t need to replicate the entire spectrum of your intellectual capability in order to displace you from your job; it only needs to do the specific things you are paid to do.” He cites a 2013 study by researchers at Oxford, which concluded that nearly half of all occupations in the United States are “potentially automatable,” perhaps within “a decade or two.” (“Even the work of software engineers may soon largely be computerisable,” the study observed. )

[Techies always add that last parenthetical like they say they understand piracy because “Some of my best friends are musicians….]

As recently as twenty years ago, Google didn’t exist, and as recently as thirty years ago it couldn’t have existed, since the Web didn’t exist. At the close of the third quarter of 2016, Google was valued at almost five hundred and fifty billion dollars and ranked as the world’s second-largest publicly traded company, by market capitalization. (The first was Apple.)

Google offers a vivid illustration of how new technologies create new opportunities. Two computer-science students at Stanford go looking for a research project, and the result, within two decades, is worth more than the G.D.P. of a country like Norway or Austria. But Google also illustrates how, in the age of automation, new wealth can be created without creating new jobs. Google employs about sixty thousand workers. General Motors, which has a tenth of the market capitalization, employs two hundred and fifteen thousand people. And this is G.M. post-[IBM’s] Watson. In the late nineteen-seventies, the carmaker’s workforce numbered more than eight hundred thousand.

How much technology has contributed to the widening income gap in the U.S. is a matter of debate; some economists treat it as just one factor, others treat it as the determining factor. In either case, the trend line is ominous.

Read the post in The New Yorker

Uber brings full employment for robots program to California

It’s not just Austin:  Read the post on Christian Science Monitor:  Uber tests state laws with driverless cars in San Francisco Without Safety Permits

The ride-hailing company plans to bring a “handful” of its self-driving Volvo XC90s to the Bay Area, with an Uber employee ready to take the wheel if the technology fails. But Uber will carry out public tests without a stamp of approval from the state Department of Motor Vehicles.

@jonathantaplin: Forget AT&T. The Real Monopolies Are Google and Facebook.

The proposed merger of AT&T and Time Warner has drawn censure from both sides of the political aisle, as well as a Senate hearing that looked into the potential for the combined company to become a monopoly.

But if we are going to examine media monopolies, we should look first at Silicon Valley, not the fading phone business.

Mark Cuban, the internet entrepreneur, said at the meeting of the Senate Judiciary Antitrust Subcommittee last week that the truly dominant companies in media distribution these days were Facebook, Google, Apple and Amazon.

“Facebook is without question in a dominant position, if not the dominant position, for content delivery,” he said.

Look at the numbers. Alphabet (the parent company of Google) and Facebook are among the 10 largest companies in the world. Alphabet alone has a market capitalization of around $550 billion. AT&T and Time Warner combined would be about $300 billion.

Read the Post on The New York Times

@foxjust: Uber Decides It’s Getting Tired of Competition

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How big was it, Travis?

In its home market, the U.S., Uber certainly is well ahead of chief rival Lyft, in fundraising as well as market share. Its advantage is especially big among business travelers, who value its presence in more cities — for them, the network effects are at least partially national. But business travelers are a small minority among those who use ride-hailing apps, and Lyft has claimed major market-share gains in a few big cities where it has concentrated its efforts recently.

Lyft has been able to do that in large part thanks to $1 billion in new cash it got this year from General Motors and other investors. It has also been part of a nascent global anti-Uber alliance with Didi, which invested $100 million in Lyft last year. With Uber and Didi’s CEOs sitting on each other’s boards, as Monday’s deal calls for, it’s hard to see Didi staying involved with that effort. Also, Uber’s stake in Didi will make it an indirect part owner of Lyft, at least for a while. It’s all very incestuous.

It also seems to bespeak a less directly competitive future.

Read the post on Bloomberg

@erikwemple: Arianna Huffington is an Uber board member: Huh?

Editors in chief of news organizations are well advised to steer clear of corporate entanglements. They generally avoid doing paid speeches for special interests, stay off of the boards and councils of companies and groups that their reporters cover. The goal is to lead coverage of all newsmakers without fear of polluting the product….

[Ariana] Huffington and [Uber CEO Travis] Kalanick co-authored a “story” on Huffington Post titled “A Wake-Up Call to End Drowsy Driving,” which outlines a collaboration of sorts among Huffington Post, Uber and Toyota. Here is a key paragraph: “Over the next month, Arianna will be carrying that message to college campuses in Denver, Las Vegas, Nashville, Chicago, the Bay Area and throughout the country. If you’re interested in a sleep tutorial, order a ride with Uber and you could win a chance to have Arianna ride along with you.”

Huffington Post journalists: Isn’t that precisely what you want your editor in chief doing?

And we’re so sure that Ariana and Trav jotted down that “story” together?  Anyone betting against a HuffPo staffer ghosting it?

Read the whole sordid story on Washington Post.

@thatswattsup: Student Perspective On Uber’s Prop 1 Loss

Insightful perspective on Uber and Lyft’s Prop 1 failure by University of Texas business student Andrew Watts:

Given that Uber and Lyft are such recognizable as companies, have loyal users, and spent so much money on campaigning, how could they possibly have lost by almost 12% in this election?

You can break it down into two major points:

They spent too much money on advertising & their campaign was inauthentic and Their target demographic of voters simply do not vote

We would add:  The election was held during finals week at UT.  It’s called an academic calendar, look it up sometime.

Read the post on Medium.