Wednesday, February 1, 2017

Uber's Master Plan, The Short Version

Readers who have followed the FT's Izabella Kaminska, and to a lesser extent ourselves, on Uber  over the last four years know the evolution of Uber's pitch. However, among all opiners, this comment at Brad DeLong's Grasping Reality with Both Hands blog is as succinct as it gets. I am envious.
(in our and Ms. Kaminska's defense, we were doing it in real time but still...)

HT up front to Izabella's confrère Matthew Klein who's link set up the chain to naked capitalism and then DeLong's commenter, Mr. Slee.

Beginning at naked capitalism:
...Uber’s narrative was designed to evoke these emotive/tribal loyalties, by portraying itself as the heroic defender of progress, innovation and disruption, engaged in mortal battle with the “evil taxi cartel” and the corrupt government regulators fighting to prevent the entrepreneurs who were using advanced technology to provide the world with better taxi service at lower prices. Despite hard evidence ($3 billion losses in year seven, massive failure of Uber China, no efficiency or scale driven margin improvements) many find it difficult to abandon the framing they bought into years ago.
Tom Slee (I would highly recommend his book “What’s Yours is Mine: Against The Sharing Economy”) has been following Thompson’s arguments and the overall Uber discussion over the years. When Brad DeLong posted links to the Naked Capitalism series, to Izabella Kaminska’s Financial Times article and to Thompson’s Stratechery piece at his website,[7] Slee posted the following comment, which captures the ongoing refusal to reconsider the Uber narrative in light of growing economic evidence nicely:
[and now Slee at Grasping Reality]
It sounds like Ben Thompson is falling for the Uber bait and switch. Stages of which:
Uber has a nice business as a status product (Uber Black Car ~ 2010)
Uber Black may not be profitable, but Uber will displace taxis and be hugely profitable because of technology-driven efficiencies (UberX: 2014-2015)
UberX may not be profitable, but UberPool will lead to new efficiencies in mass transit (2015-2016)
UberX may not be profitable, but Uber is a logistics company and will rewrite the rules of delivery (UberEats, various speculative stories, 2013-2015)
UberPool may not be profitable, but when Uber displaces car ownership the scale of the market will make it profitable (2016)
Uber with drivers may not be profitable, but driverless cars will make Uber profitable (2014-)
Driverless cars may not be profitable, but Uber is looking into flying vehicles (2016)
The Uber makes losses while maintaining credibility for bringing “the future” in some form or other.
And just so you know, we were on top of the flying vehicles:

Uber to Challenge Airbus in the Autonomous Electric Flying Taxi Business
As the only analysts covering the nascent as-yet-theoretical autonomous electric flying taxi market we intend to be the the go-to source for all things autonomous electric flying taxi and/or theoretical....