My problem with Uber all along has been that it’s optimized for a really specific utility, but at…

Summary

The author critiques Uber for its narrow focus on providing rides at the expense of broader societal and economic contributions, while also discussing the negative impacts of its pursuit of a platform monopoly and the exploitation of its drivers.

Abstract

The author expresses a fundamental issue with Uber's business model, which prioritizes a specific utility—providing low-cost rides—over the multifaceted roles of local taxi services. This is likened to the detrimental effects of digital businesses that, while efficient in their programmed tasks, inadvertently eliminate ancillary benefits and knowledge. The author draws a parallel with Clear Channel's homogenization of the FM dial, where local expertise was lost to centralized, profit-driven programming. Uber's strategy is seen as a race to establish a monopoly, necessary to justify its high valuation and to expand into other markets such as logistics and autonomous vehicles. The author points out the irony that Uber drivers, through their labor and investment in vehicles, are unwittingly contributing to the development of a driverless future that may render their jobs obsolete, without any stake in the company's success. The critique extends to the broader digital economy, which the author argues undervalues labor and land, focusing disproportionately on capital. The author advocates for a model where those providing labor and territory for Uber's operations have a say in the company's governance and share in its profits.

Opinions

Uber's optimization for specific utility comes at the cost of broader societal functions.
The digital nature of Uber's business results in the loss of everything not explicitly programmed for.
Uber's business strategy is compared to Clear Channel's takeover of the FM dial, which led to a loss of local stations and expertise.
Uber's goal is not merely to provide rides but to eliminate competition and create a platform monopoly.
The author suggests that Uber drivers are inadvertently facilitating their own future unemployment by helping to develop Uber's autonomous vehicle technology.
There is a critique of the digital economy's focus on capital over labor and land, which the author sees as a flawed approach.
The author believes that Uber's drivers and the communities it operates in should have a voice in the company's operations and a share in its revenues.

My problem with Uber all along has been that it’s optimized for a really specific utility, but at the expense of others. It’s a bit like online universities, which offer courses isolated from the fabric of education or a learning community. That’s the nature of any digital business: you get what you program for, but lose everything else — and sometimes it doesn’t come back.

Remember what Clearchannel did to the FM dial? They bought it all up, and replaced local stations and deep music knowledge with long-distance, computer-generated play lists. It was all excused as free market capitalism; thanks to VC they had more money, so they were entitled to purchase the landscape. Eventually, the non-local Clearchannel FM stations proved they weren’t profitable enough to sustain the company’s valuation, so Clearchannel began selling them. But the institutional knowledge enjoyed by those original FM stations was gone.

Uber may be of great utility in the limited frame of providing low-cost rides for people with iPhones. But it does not serve any of the other functions that a local taxi service does. Meanwhile, its programmed not just to provide rides, but to take out competition. It is a platform monopoly in the making. This is because it cannot support it’s multi-billion-dollar valuation by being a ride broker.

Uber needs to create a platform monopoly so that it can leverage into other verticals, from logistics to self-driving cars. If anything, Uber’s drivers are the R&D for Uber’s driverless future. They are spending their labor and capital investments (cars) on their own future unemployment. And even that would be okay, if they were shareholders in Uber capable of participating in those future profits — but it’s not a worker-owned cooperative at all.

As every economist since Adam Smith and before has known, the factors of production are land, labor, and capital — and sometimes entrepreneurial effort. But the current digital economy rewards only capital, and acts as if acknowledging the contributions of land and labor were a communist, regulatory plot.

The people providing the labor and the communities providing the territory for Uber’s operations deserve an equal say in the way the company works, and revenues the company earns.