Are Uber’s troubles a sign of things to come?


Two Uber executives were taken into custody by French police today for running an illegal taxi operation. This arrest comes on the heals of a French taxi-driver revolt where most of the cars participating in France’s version of UberX (called UberPop there) were damaged or destroyed by protesters.

You could argue that Uber had it coming; that their business practices were predatory and aggressive. Uber has received s quite a bit of bad press in the last year, accused of being extremely unfair in the way they do business. But, is our criticism just? Or, ironically, are we unfairly judging Uber?

There is no debate, Uber’s business is extremely disruptive. They have flipped a century-old business on its head in less than 2 years, and they have doubled or tripled the revenue expectations of the entire transportation-for-hire industry, all on their own.

Is this kind of disruption good or bad?

The fundamental question for us is: “Do the needs of the many outweigh the needs of the few or the one?” (if you got that reference, a hat tip to you). To take it further, we are not talking about basic human needs, but ways to make our lives just slightly better, mildly easier. Uber offers a ‘convenience’ for many while destroying jobs and businesses for a small few.

As a society, should we encourage those kinds of disruptions? Well, we already have.

Refrigeration disrupted the salted-meat industry.

The automobile disrupted the horse carriage industry.

The Mac disrupted the typesetting industry.

The CD disrupted the vinyl record industry.

If my examples appear to be trivial, than your dad probably was not a typesetter. Mine was. And the truth is, he survived and prospered once he embraced the inevitable change brought on by technology. He did not join a large group of typesetters to protest Apple for unfairly eliminating his profession.

There is no progress without conflict and true progress always comes at someone else’s expense. I always get a little worried when the small minority gets mass sympathy because they vigorously protest their own self-interested point of view. The reason why Uber is popular is because the Taxi industry did not compete, they did not innovate on their own, leaving an opportunity for their business to be disrupted.

Are you a little concerned that Uber has been vilified? If Uber is successfully squashed or minimized, than other thoughtful and necessarily aggressive startups may not pursue this same kind of progress. Off the top of my head I can think of ten industries that need to be aggressively dismantled and reconstructed just like Uber did to the Taxi industry, and all of those industries have way more impact on my life than the difference between waiting 5 or 20 minutes for a ride

  1. I think framing the issues with Uber primarily as a story about technological disruption in a consumer experience is misleading. To me, I think the more interesting story is about how technology companies are ‘innovating’ by using technology to exploit loopholes (or at best, gray area) in legal distinctions between employees and contractors.

    I’m highly suspicious of large companies racing to cut consumer costs by ruthlessly driving down payroll costs or shirking legal, liability, and regulatory burdens, and you don’t have to look very far (Amazon’s exploitation of temp workers, Walmart’s issues with retail workers, Superfund sites) to find other examples where ‘innovation’ and ‘competitiveness’ in a business is really just the clever off-loading of corporate responsibility and liability to the public.

    I’m not anti-innovation by any stretch (I prefer the Uber experience to taxis as well, and I’m for automated cars for all the reasons touted of safety and efficiency and so on), but I’m really concerned about the future of work balanced against the downward pressure on wages, lifestyle, and security of the ‘gig’ economy, and the reduced employment needs due to additional automation. It’s not like we’ve found jobs in the last 50 years for people who used to work in manufacturing or construction, you know? So what makes us think we’re going to find something for truck drivers and service workers and everyone else who forms most of the ‘service’ layer in a service economy?

  2. It’s interesting you bring up truck drivers – there was an excellent article written by Scott Santens( @2noame ) on the impact self-driving trucks will have on our economy:

    I do see your side to this Justin, I just think these types of disruptive innovations are inevitably going to kill jobs, and I’m not convinced that there are any ‘solutions’ for employees. The truth is, as a society, we have always opted for less expensive and more convenient over saving soon-to-be antiquated jobs.

    Further, I think your framing of the problem simplistically as ‘tech companies are exploiting loopholes’ is not at all reasonable. I do not necessarily think moving people from employees to contractors is categorically a bad thing.

    Contractors can set their own schedules, move around industries more easily, flex their incomes by working longer or get more family time by working less. I have good work because my next job was directly contingent on the quality of my last job.

    If the corporate, non-monopolistic and anti-collusion regulations are actually practiced by our government, than I think the economics of labor supply and demand will keep the system fair enough

  3. Another influencer weighing in on the ‘troubles’ Uber is causing:

    My comment on his article:
    I agree with your analysis but I’m not sure I agree with the tone – I’m not sure painting disruptive technologies as “bad” is appropriate or helpful.

    I honestly believe that the market will have to be allowed to take care of itself. Uber, Amazon – are neither decent nor evil – Fundamentally, lowering the costs for most consumers on commodity services will raise the overall expendable income for those same consumers, essentially rising everyone’s income, right? And, if ‘big software companies’ are profiting too much, than they are leaving room for competitive new-comers to swoop in and offer lower prices or provide better service by paying their contractors more.

    I would be very interested in hearing how you would propose fixing the ‘problem’ – do we regulate the companies more? does unionization see a resurgence? do we redefine how companies can engage help?

  4. Yes there will be jobs lost due to Uber invading/disrupting the taxi business globally. However as regard’s numbers of people losing their jobs, yes they will, and it will be tough for these people. Eventually however the market will correct and these people will mostly find employment else where. Back one hundred years and the overwhelming majority of people (around the 80% mark) worked in food production. Now that figure is at about 4% globally. Also the difference between the richest and the poorest on this planet is decreasing generally and not increasing. Global standards of living are generally improving, obviously for some more than others, but still the trend is there.

    When we just think of Uber, if we forget self driving cars for a second, there is little to no job losses, other than the taxi central radio operator, we still need drivers.

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