Tuesday, May 30, 2017

Uber’s Terrible, Horrible, No Good, Very Bad Three Months – With More to Follow?

On March 3rd, USA Today published a Jessica Guynn piece titled “Uber’s terrible, horrible, no good, very bad week.”  It related how the company, already based as I have written on unsustainable success, in seven days or less, (1) was the subject of an “explosive blog post alleging sexual harassment and discrimination,” (2) was publicly accused, also by employees, of having a “toxic culture,” (3) was sued by a major competitor, Waymo, for technology theft, (4) ditched its senior vice president of engineering for being investigated for a previous case of sexual harassment, (5) had its CEO featured in America’s Funniest Home Videos (well, actually only on what a car dashcam picked up) haranguing one of their drivers, (6) became known to the world for using software, Grayball, to identify and avoid legal authorities in places where their service had been banned, and (7) in the wake of all that, lost its vice president of product and growth.

But Uber’s flaming descent didn’t stop there.

The Greyball story was described in a 6-page New York Times article (How Uber Deceives the Authorities Worldwide”) released that same day, in which author Mike Isaac documented the electronic effort to which Uber went to unmask the enforcement agents, which included such Big Brother techniques as combing social media profiles for those calling themselves police officers and checking personal credit cards for connections with police credit unions, and wrote that using such software might even be a federal crime.  Five days later a company representative said they had made a change, “expressly prohibiting (Grayball’s) use to target action by local regulators,” but added that it would “take some time.”

After that, the hits just kept on coming.  (8) Uber’s competitor Lyft announced the week after the bad-week story that it would move into 100 new markets later this year.  (9) Another New York Times piece, this one on March 18th (“As Uber Woos More Drivers, Taxis Hit Back,” Winnie Hu) showed how Uber drivers are making more money per hour driving Yellow Cabs instead.  (10) Eight days after a progress report on Uber’s self-driving cars was leaked, showing that their test fleet of 43 put in over 20,000 miles in a mid-March week but required manual driver intervention more often on average than every mile, the program was suspended for two days when one driverless vehicle was in an Arizona accident – not their car’s fault, but which resulted in the vehicle flipping on its side.

The carnage seemed to stop in April, but earlier this month, (11) Uber’s primary competitors Lyft and Waymo officially joined forces, per Isaac in the New York Times again on May 14th, “to work together to bring autonomous vehicle technology into the mainstream through pilot projects and product development efforts.”

In combination with the ten previous disasters, that joint venture, if it works, could finish Uber off.  In the May 7th Wall Street Journal, Christopher Mims (“How Self-Driving Cars Could End Uber”) showed how such technology could not only fail to help that firm but could eliminate it entirely, if it is not on the right side of “transportation-as-a-service” offerings likely to come from Ford Motor Company within the next five years, and which would remove Uber’s advantage of not needing to own vehicles themselves.      

One set of people, though, still profit reasonably from Uber.  That is the customers.  They will not be able to keep doing business with that company, though, if it is forced out through its original and continuing problems – or if it has many more streaks like this March.  Although driverless technology speeds on, Uber’s business model will not.  Without cleaned up management along with a major consortium partner, the question is only how many feet of water in which the company will drown.


  1. Tony Sheppard Uber and Lyft are bullshit share-the-crumbs gig economic models there to enrich the 1%. Nothing more.
    You can dress it up all you want it's still just another way to pay workers a starvation wage and keep them in debt
    peonage. These rideshare companies are just a few servers with an algorithm using GPS and data analytics/aggregation, almost no overhead, yet they rip off the people actually doing the work who have to foot all their own expenses. A big fat 28% fee on the driver's fare. Nauseating. But it's just what the Harvard and other business schools teach their fawning greedhead one percenters to be. Labor is to be undervalued at all costs in the worship of capital. And whatever you do don't share the prosperity those workers bring to your company with the workers themselves. Remain the greedy bastards you are and keep it all ! That's the American way !

    1. Thank you for your comment! See my other posts on the gig and sharing economies, and you will see that, to some extent, I agree with you.