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https://doctorow.medium.com/the-big-lie-that-keeps-the-uber-bezzle-alive-8d6e8c0ccde7>
"Uber is (still) a bezzle (“the magic interval when a confidence trickster
knows he has the money he has appropriated but the victim does not yet
understand that he has lost it”). And every bezzle —
every bezzle — ends.
Uber entered the market with an absurd proposition, which they papered over
with an
idiotic narrative…which the world ate up with a spoon.
The absurd proposition: Uber could use apps to reinvent taxis, and turn a
low-margin business into a high-margin business by sprinkling it with high-tech
pixie dust.
The idiotic narrative: Uber could establish itself in the market by pouring
billions down the drain, losing 41 cents on every dollar it brought in,
subsidizing unprofitable rides at unsustainable rates…but someday, it would
make it up in volume.
Here’s how that proposition worked: Uber loses a lot of money on every ride.
But someday, it will corner the market on transit (not just taxi journeys, but
all transit), and it will be able to raise prices and cut wages and recover all
those loses and turn a profit.
Obviously, this is stupid. Even if Uber manages to blow through its investors’
billions in habituating us to rideshares over cabs and buses, even if they
manage to bribe or bully cities into allowing takeovers by unlicensed cabs,
even if they manage to rewrite labor laws so they can treat their employees as
contractors…
Even if
all of that, then what? Then you have a market that is structured for
dominance by unlicensed taxis driven by misclassified employees — that
anyone
can enter. The (mythical) day Uber attains dominance and profitability, someone
else can start a competitor that provides
exactly the same services, with
exactly the same drivers and
exactly the same passengers. The only
difference? That new service won’t be $31 billion in the hole, unlike Uber.
In reality Uber was, is, and always will be a bezzle. The company used billions
from the Saudi royal family to build up a giant, money-losing business (albeit
one that maimed or killed taxi and transit services around the world through
predatory pricing). All the while, they told a series of stories — produced
narratives — that insisted that the red ink was transitional, that enduring
profit was coming soon.
Those stories were many and varied, but they all added up to the same thing: a
pile of shit this big
must have a pony under it. That is, if there are lots
of people who like riding in taxis where the 41% of the fare is paid by the
Saudi royal family, and lots of people who will drive those taxis, then the
taxis must be here to stay."
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
