Wednesday, December 03, 2014

Uber Duber

Is it just my imagination, or is Uber turning itself into the hipsters’ very own WalMart: Destroyer of innocent businesses! Exploiter of workers! Outrageous profiteers! Rapacious surge pricer! Paranoid despisers of the fifth estate!

And – other than for that rapacious surge pricing (Uber, not Walmart) – cheaper than anything else out there. Bonus points to Uber for being cool. (Do hipsters snap their fingers beatnik style to signal approval? Snap, snap, snap…)

Sure, Walmart’s getting its traditional, seasonal bad press the last week or so: striking workers, Black Friday riots, the Ohio “associate” doing a can drive to support a sick (i.e., no pay/no benefits) fellow “associate.”

But Uber’s press of late has been just incredible.

I’m going mostly from memory here, but from that memory I seem to be able to dredge up a handful of sexual and physical assaults by drivers; a set to or two with blind passengers and their service dogs; uber duberly jacked up Halloween fares (free market: snap, snap, snap); tweeted out threats about going after journalists in general; and some exec using an internal tracking tool to track the whereabouts of one journalist in particular.

None of this is getting in the way of sucking in investment – over a billion – and enjoying a whopper of a valuation – nearly $20 billion. (Not that Uber appears to be in any big hurry to go public and cash in. More, better beatnik applause.)

But my favorite story of late is Uber’s participation in what some fear is the looming debt crisis: the likely collapse of the subprime auto lending market.

Tech blog ValleyWag had the scoop:

The subprime lending market that plunged America into the Great Recession is back and as unscrupulous as ever. Instead of mortgages, this time a bubble has formed around auto loans, and reliably ruthless Uber is in the thick of it. Two "partners" in Uber's vehicle financing program are under federal investigation, but Uber hasn't slowed its aggressive marketing campaign to get drivers with bad credit to sign up for loans. (Source: ValleyWag)

Unlike cab companies, which screw drivers while letting them use cars in their fleet, Uber screws drivers while letting them use their own cars, while simultaneously convincing them that they are in the millennial vanguard of cool operators – their very own self-entrepreneurs with full control over their hours, their bodies, their selves. (Snap, snap, snap.)

Here's how Uber fits into all of this. The company's financing program connects drivers with poor credit to auto lenders and dealers, promising better rates. Uber does not finance the loans itself. Rather, Uber introduces drivers to partners like General Motors, Toyota, "and several unnamed financial institutions." Why? The startup wants drivers with nicer cars, but it badly needs more drivers overall to meet demand and feed its growth spurt. Human drivers aren't as easy to scale as servers, causing competition between rivals like Lyft and Sidecar. Uber dubbed its recruitment efforts "Operation Slog." 

(By the way, Uber drivers are often referred to as the company’s “business partners,” which is even better than Walmart dubbing its workers “associates.”)

Meanwhile, Uber – which, when it’s not snap-applauding, crosses those fingers to claim that drivers, errr, business partners can easily gross $100K a year – has started, at least in some cities, lowering its prices to undercut the competition, while at the same time increasing the commission it charges its drivers, errr, business partners.

Not to mention that ugly little fine print that if someone who has gotten sucked into no-credit borrowing through Uber has pretty much become an ‘indentured servant” of the company. (Those are the words an Uber driver, errr,  business partner used to describe the lending system.)

I’ve never used Uber, and feel very little need to.

I walk. I take public transpo. I Zipcar. I borrow from a sib. I rent. And, on occasion, I grab a cab.

Maybe it I were a hipster out clubbing at 2 a.m. I’d Uber. But I’m not. So I don’t.

I remain a tad bit skeptical about the “sharing economy.”

I may be completely wrong – maybe this is just the wave of the future, and everyone will grow to accept (if not fully embrace) it. But I suspect that one day, all these fine young millennials, who, in their twenties, are happy enough being part time, no benefit, freelancers, are going to wake up one day and feel conned. They’re going to want to start a family, buy a home, save for old age. And they’re going to feel conned by the entire apparatus that got them where they are by convincing them they’re captains of their own destiny. When, in reality they’re, at best, buck privates of their own destinies. Sure, they may have managed to avoid working for “the man”,but instead they got suckered into being “business partners” for the early 21st century version of the man. And that man will have become a kabillionaire while the average Uber driver, errr, business partner is still paying down his or her crappy car loan.

Sounds more unter than uber to me.


Frederick Wright said...

There is quite a bit of misinformation being circulated by the press regarding the Uber payment/scheduling platform, which has NOTHING to do with the 'sharing economy' and everything to do with resource optimization and transparency. I'm not a hipster and I'm not out clubbing, but I'm awfully tired of being screamed at by psycho taxi drivers, being told that their credit card readers "don't work", being taken on wild excursions to Siberia rather than direct routes. Use Uber Black Car service once, just once, and no sane person will ever want to be degraded by a taxi psycho again. Please note, that Uber Black Car is quite distinct from UberX.

Maureen Rogers said...

Frederick - Thanks for your comment, and for pointing out that the world of taxi cabbing is not a golden alternative to Uber. (Been there with the cab drivers who don't want to take us home from the airport because it's too short a hop...)

I still think that the company - if only from a brand and reputation point of view - might want to back away from sketchy lending practices.

Rick T. said...

This sounds familiar, a big operation suckering people into taking on enormous amounts of debt because doing so will allegedly help them make a better living.

Uber? Oh wait, I thought we were talking about every college and university in the country, leaving their graduating students with at least five cars worth of debt in return for a degree with which they can get the same waitstaff/barista job that they could have gotten without the degree.

Yes, some do get better jobs by getting more schooling, but it is far from a sure thing that it was some decades ago when college degrees were more rare. And let's not forget those universities churning out thousands of law school graduates when it is clear that demand for graduates from any but the most elite schools has plummeted.

At least Uber borrowers presumably start off with a bit of caveat emptor attitude when examining that proposition. Would-be students should do the same.

Maureen Rogers said...

And think of the worst of all possible worlds: graduating with $100K in debt, finding out the only way to make a living was driving for Uber, and larding on another $20 or $30K for the privilege.

John said...

I've used Uber twice. Both experiences have been smooth and pleasant. I read about the company and want to hate it but the fact is, it works really well. And in a town like Houston, which is incredibly car oriented and where the taxis are horrible - the few times I've take then I've felt like I was in a rolling death trap - Uber is just a smart alternative. My second trip was this afternoon, going from my office to a car dealer to retrieve my car from the service department. I requested the trip, the car pulled up 4 minutes later, and 15 minutes and ten bucks later I was at my destination.

It's cheap enough that if I didn't drive anywhere but work it would cost me only slightly more than car maintenance, payments, and insurance to just take it to work every day. That's pretty a,along.

But this is Houston so I drive a lot of other places...