OK, so I exaggerate. (Or as Homer Simpson famously told Marge about change: “It only leads to failure.”) Sure, I get that the tech world is all about disruption, and the basic capitalist tenet that whoever builds a better mousetrap (or app) -- wins. And gets a taxi path beaten to their door?
I refer to the news last week that Uber, the app-based taxi and car-sharing service, has hired David Plouffe, the former Barack Obama campaign operative and world-class microtargeter, to bring his campaign manager skills to the start-up. It’s war, baby.
Of course, by human standards, Uber just turned four and should be wearing overalls and going to preschool. But we’re talking about Silicon Valley.
Well-organized and exceedingly well-funded, Uber in its four years has already eaten up most of the globe, having expanded into 170 cities in 37 countries, And the company says it is doubling its revenue every six months. TechCrunch reported Uber’s revenue last year was $213 million on more than $1 billion of bookings; Uber takes a 20% cut of all drivers’ receipts.
The start-up now has a valuation of more than $18 billion -- that's with a “b.” So it's worth more than Hertz, Avis Budget and even a number of younger and more progressive companies that have been around longer than Uber, like Whole Foods and Chipotle.
This amazing growth is all based on the firm having its own killer, taxi-dispatching software, and drivers providing their own cars.
“Uber” translates to “above” as in the German national anthem, “Deutschland uber alles”: “Germany above all,” which still sends chills in some camps. But by the late 1980s in America, “uber” had become hipster code for “beyond,” as in the ultimate, a superlative adjective with an umlaut that could energize any noun.
I was living in San Francisco in 2010, which is where and when Uber started. And I will say that in a city of endless attractions, limited public transportation and about 11 working taxis, Uber was a godsend. And I guess it brought much-needed service, similarly, to many cities across the country and around the world.
But New York is different, a serious taxi town, going back more than 100 years. (Follow that cab!) And to me, it feels like Uber is indeed occupying Paris or invading Poland with its presence -- and it needs the ministrations of a former Obama staffer in order to continue the blitzkrieg.
When I moved back to New York City in 2012, I returned to my former yellow cab habit, and found that on the whole, service had improved. The cars were actually greener, cleaner, quieter and less smelly. And being able to pay by credit card made the process speedier and a lot more convenient.
I also knew that the drivers represented the vast immigrant population of the city; for generations, driving a cab has given these people an entry into middle-class life. In New York, medallion cabs are far more regulated than Uber cars. So I was not a fan of Uber’s attempt to break the taxi union here.
But I polled my Uber-using friends on Facebook for their feelings, and the reaction was overwhelmingly -- even rabidly -- positive. The game-changer is the Uber app, which provides a map for users to “follow that cab”: to see exactly where the car is and how quickly it’s making its way to your location. The app also enables riders to rate drivers, which weeds out duds. Drivers, in turn, can rate users, which cuts the probability of getting into a car that smells vaguely of vomit.
Others pointed out that Uber is a blessing for people with disabilities who can’t stand in the street to hail a cab, and also helps people of color -- who, sadly, are still discriminated against by some drivers. All my friends agreed that Uber is essential during bad weather, and a life-changer for customers who need to get anywhere during the witching hours between 4 p.m. and 5 p.m., when cab drivers change shifts. Desperate New Yorkers have been known to run into traffic then, trying to negotiate a rate with an off-duty cab for way over the meter price.
This brings us to Uber's “surge-pricing”: during rush hour or downpours, the cost of the fare can double or even triple. It’s a contentious issue that has already brought Uber a lot of bad P.R. The fear is that once the company monopolizes the business, there will be no recourse to surge-pricing.
Still, I’ve got to say I do see some benefits in Uber's invasion of, er, presence in, New York. It has forced some corporate car companies to improve. Indeed, several have already introduced similar apps with GPS maps. And medallion owners should feel the pinch and have to up their consumer service game, as well.
But just as I started really warming to the service, I saw a new report from the Verge showing the rapaciousness that has allowed for such stunning growth. Writer Casey Newton says Uber hires people to request rides from competitors, then cancel the orders -- all while using pre-paid cellphones and credit cards that are intentionally hard to trace. Earlier this month, competitor Lyft accused Uber of ordering and canceling over 5,000 Lyft rides. Uber responded by accusing Lyft of playing dirty pool, too. Then there’s the issue of stealing, I mean recruiting, drivers from other companies -- because Uber can’t find them fast enough.
Competitors are encroaching on Uber -- but maybe the whole taxi-limousine thing is just an off-ramp on the company’s road to bigger things. (After all, we won’t even need drivers in the future when we all are in our autonomous Google cars -- being driven, after a software override, into the ocean or a locked facility.) Uber has already launched a messenger service in New York -- just the beginning of using its software platform to create a worldwide shipping and logistics grid.
Eventually, like many other Silicon Valley empire-building companies using a winner-take-all, ask-permission-later strategy, Uber will go public, and make billionaires of fewer than 200 people, while flattening everyone else. There will be backlash, no doubt, and David Plouffe will have his work cut out for him.
But imagine if we could figure out how to create world peace with the same speed, using a variation on the software with which Uber has so successfully matched people and cars.
Instead, the focus, as has happened to other tech giants, will probably be on corporate spying and consumer behavior modification. One nation, Uber-Google-Amazon, over-apped, and above all, having many more taxi drivers madly competing on the streets, perhaps in Thunderdome style.
Happy Labor Day!