@GiniaNYT: Uber and the False Hopes of the Sharing Economy

The passage of extensive legislation by New York’s City Council on Wednesday, curtailing the previously unchecked powers of Uber and other ride-hailing services, suggests the extent to which the false promises of the sharing economy are becoming better understood and, how much more aggressively they still could be counteracted.

From the beginning, Uber appealed to drivers on the premise that partnering with the company would allow them to do what they really wanted to do, which was not ferrying 24-year-olds to beer halls or actuaries to the airport as a means of full-time employment.

A series of Uber ads that ran in conjunction with the Grammy Awards this year showed some of the artists nominated, in cars, with drivers who were singers and producers themselves. Other ads introduced us to drivers who were nursing students or aspiring businessmen — Uber could fund your creative and professional ambitions, or make it easier to go to Disney World or buy new appliances.

The reality though appears quite different.

Read the post on the New York Times

@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

@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.

@johntory: What About Über Don’t You Understand?

Uber Yardsigns

Aside from what Google investment company Über did to the people of Austin–Toronto Mayor John Toryseems to have gotten that message loud and clear.  This is the real purpose of Silicon Valley bullying and a good example of the “sharing economy”.

After months of protests and turmoil, Torontonians have a legal, regulated UberX travel option for getting around the city.

New rules approved by city council in a marathon Tuesday meeting will further revolutionize Toronto travel by allowing taxis to start using Uber-style “surge” peak-time pricing on fares booked via a Smartphone app.

Some councillors are warning, however, that the road to legalizing ride-hailing services, which use smartphone apps to connect passengers to non-professional drivers using their own vehicles, has made roadkill out of cabbies’ livelihoods and passenger safety.

Mayor John Tory convinced council to vote 27-15 in favour of the new rules.

Read more at the Toronto Star.

It’s hard to believe that Mayor Tory got the memo about Über’s true goals of replacing those sharing economy jobs–especially ÜberX–with robots.  That sounds incredible, and you probably dismiss it, but take a minute and consider the evidence.

According to the Wall Street Journal page 1, General Motors and Lyft plan on having driverless taxis on the road pronto:

General Motors Co. and Lyft Inc. within a year will begin testing a fleet of self-driving Chevrolet Bolt electric taxis on public roads, a move central to the companies’ joint efforts to challenge Silicon Valley giants in the battle to reshape the auto industry.

Über CEO Travis Kalanick lets us in on the Über strategy, as reported by the Verge:

Über will eventually replace the people who drive its cars with cars that drive themselves, CEO Travis Kalanick said today at the Code Conference. A day after Google unveiled the prototype for its own driverless vehicle, Kalanick was visibly excited at the prospect of developing a fleet of driverless vehicles, which he said would make car ownership rare. [And which Uber would presumably buy from Google or a vendor like Ford or Volvo using Google’s technology.]

“The reason Über could be expensive is because you’re not just paying for the car — you’re paying for the other dude in the car [meaning the driver],” Kalanick said. “When there’s no other dude in the car, the cost of taking an Über anywhere becomes cheaper than owning a vehicle. So the magic there is, you basically bring the cost below the cost of ownership for everybody, and then car ownership goes away.”

Not only are Uber and Lyft planning on laying off all their drivers, according to Reuters, Google, Ford, Volvo, Über, Lyft formed an alliance to lobby for federalization of driverless car regulations.  The alliance hired an Obama Administration revolving door lobbyist, one David L. Strickland, to lead the federalization of their driverless car effort.  (Volvo is owned by owned by China’s Zhejiang Geely Holding Group Co.)

Strickland joins the coalition from the high roller Washington, DC lobby shop Venable where he’s worked since 2014 after leaving the post of –where else–Administrator of the National Highway Traffic Safety Administration (NHTSA) in the Obama Administration.

We don’t know the exact rules in Canada about employees versus independent contractors, but here’s an important article from Inc. that explains the connection between Über’s refusal to conduct proper background checks and their desire to keep drivers in the easily fireable category (…”the other dude in the car”…):

The San Francisco and Los Angeles district attorneys have accused Uber of failing to uncover serious crimes on the records of some drivers allowed to operate in the two cities. The attorneys said they discovered 25 drivers in the two cities whose criminal records had gone undetected, and at least some records included felonies. Notably, one of the drivers whose criminal record went undetected was a convicted murderer who spent 26 years behind bars.

The discovery would appear to put pressure on Uber to adopt a more thorough background check process in order to stay in consumers’ good graces. But there’s more at stake here: If the company does adopt more rigorous background checks, which could include fingerprinting, drivers seeking classification as employees could try to use the move as evidence they are indeed employees and not private contractors, says one labor attorney.

And don’t forget–some Über drivers will tell you that Uber lies about what they pay their drivers (read an Über driver’s analysis on Medium):

Be careful when you hear Uber state that drivers are making $40/hr.. or even $20/hr. The way that they tally that number is misleading.

[I]n reality, the driver is making $28.80/hour after Uber’s cut and $7.20/hour after operating costs. (60 minutes divided by 15 (12 min trip + 3 min dead time) multiplied by $1.80 net pay per trip after costs = $7.20/hour) [especially during surge pricing]

And here is a great Facebook comment from an Austinite about Über’s robot taxi plans:

Why does iRobot pop in my head whenever I see “driverless car?” Don’t forgot to thank all the Uber/lyft drivers for giving them more data for their automated cars too. They can all pat themselves on the back when they get fired. How much are they going to charge for this driverless car? I’d pay 50¢, but knowing Uber they’d surge price at 2am anyway, charge $50 to your credit card. Oh, and who’s going to clean up the vomit?

F Uber

Ask your music business about what it’s like to deal with Silicon Valley companies and their rampage against working people.  They know all about it.  Or you could ask Leslie Church, the former Google executive who is now chief of staff at, of all places, Canada’s Heritage Ministry.

So there go your sharing economy jobs–fire the drivers, attack automobile workers and Canada’s energy industry.  Good thinking, Mayor Tory.  Share your Über future.