19 October 2015 – I have mixed views on Uber. I am writing a piece for Medium and I have been awash in material looking at Uber from every angle.
Note: I became intrigued last May, one of Uber’s darkest days, when the computer system used by its business-operations employees ground to a halt, for the whole day. The cause: a bug in one of Uber’s databases, which set off a chain reaction that took down other systems and was made worse by human errors in response to the cascading problems, according to internal emails that surfaced on the Dark Web. It may not be obvious to the outside world, but Uber’s technical infrastructure has been hanging by a thread for years. They have spent a lot to fix it these last few months.
My initial reaction was that the Uber business model can be a universal job killer, much like predictive coding in e-discovery. And I tend to use a wide-angle lens with these things. Today, as the super-rich have amassed ever greater shares of wealth, the connection between working for a living and being able to earn a decent living from work has disintegrated. Perhaps nowhere is this disparity more evident than in the growing “on-demand” economy. Companies like Uber, Lyft, Crowdflower, Homejoy, and others in transportation, delivery, hospitality, home improvement, domestic service, technology and elsewhere have adopted business models that pass the costs of doing business onto workers themselves and move the wealth their service provides upwards. The on-demand economy has already created its share of billionaires – Uber’s co-founders are worth around $5 billion each, while those who drive for Uber receive meager pay.
Over the weekend a good friend, Susan Crawford,published at Medium a critique of Uber and similar ride-coordinating services, in the form of a kind of paean to the American taxicab. Though she didn’t start out with negative feelings for Uber, Crawford writes, her sentiment has swung away from objections to taxis (such as that they seek unfair protection from competition) to an extravagant defense, though it comes with a long list of “shoulds”: “[Cities] should be focusing on making their taxi services better,” she writes:
“Taxis should be more accessible to everyone. Taxi fares should be low, predictable, and uniform. Taxi geographies should be wide. Taxis should be clean, fuel-efficient, driven by trustworthy, well-trained drivers, and available for frictionless electronic hailing.” Even with the flaws that list implies, Crawford’s description of how well taxis work now is more positive than I’ve found to be true: “Their rates are regulated and set; their pricing is transparent and can be double-checked (just look at the meter, which is itself regularly tested); they look like a uniform fleet; they are subject to very strict licensing and safety requirements. With rare exceptions, they don’t employ surge/congestion pricing schemes.”
Tim O’Reilly … I know, an acquired taste but one of the sharpest observers of tech trends, who popularized the terms “open source” and “Web 2.0” … .has written a response, calling Crawford’s arguments “puzzling and unconvincing.” O’Reilly dissects some of the math behind the business of driving others for money, as it applies to both conventional taxi drivers and “gig economy” drivers, as well as some of the qualitative effects of ride-dispatch services.
Ok, some readers will take issue with his figures and examples, but they provide a plausible case for doubting Crawford’s rosy picture of taxis and dark view of modern app-dispatched rides. But the money line:
“Regulation is not a good in itself. It is a means of achieving public goods. And so far, it is pretty clear that Uber and Lyft (and in particular, the competition between them) are improving the transportation options in American cities. Regulators should be using the opportunity to revisit the old way of doing things rather than trying to make the new conform to outdated rules that no longer serve their purpose.”
More in a subsequent post.