Uber Destroys More Value: Demolishes Bikes from Failed Rental Businesses Rather Than Donate Them

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Not that it’s needed, but if you are hankering for yet more evidence that Uber is run by a libertarian narcissists who actively resist doing the right thing because disruption, today’s object lesson comes from Uber’s certain-to-fail e-scooter and bike rental businesses. Uber capitulated to their predictabe mounting losses and shuttered those ventures. But rather than give the surplus bikes away, it had them “recycled,” which is weasel-speak for crushed.

Now of course, Uber defenders might contend this move was economically rational. After all, people who ride bikes might opt for an Uber trip instead.

Even if this were true, it is only in the most penny-pinching way. With level of distress is so high that it seems doubtful that Uber would lose anything other than minute amounts of income, since non-car-owners who obtained bikes through the generosity of Uber would still not use them in really bad weather, or when they had more to carry than they could lug on their wheels.

With Uber’s history of profligacy, it looks like the corporate equivalent of pulling out couch cushions to try to find loose change to see the “destroy the bikes” move as a revenue initiative.

First, to the Uber rationale for bikes, to the extent it had any beyond “keep increasing revenues and hope no one asks about the bottom line. From the Wall Street Journal in late 2018:

Uber has turned its attention to providing customers with a host of transportation options in addition to its core ride-hailing service. Mr. Khosrowshahi said he is particularly hopeful about electric-scooters and bicycle rentals, which he has said can be a low-cost replacement for short car trips in urban centers.

“What we’re going after is essentially to debundle car ownership,” Mr. Khosrowshahi said in an interview at The Wall Street Journal’s WSJ Tech D.Live conference Tuesday. “A world in which the people who cannot afford to buy a car have access to consistent mobility wherever they are, that’s a better world.”

But as Hubert Horan pointed out a few months later, in February 2019:

But Uber didn’t provide any data that would allow one to identify the separate impacts of taxi service, food delivery or scooter rentals other businesses on their total results.

Uber was not more forthcoming about the economics of its scooter business in its S-1. As Hubert observed in April 2019:

There are various unsubstantiated claims about “synergies” between scooters and taxis, but absolutely no explanation of the current economics of scooters or how they might someday become a profitable business.

Hubert added in September that:

All of the new businesses Uber has expanded into (food delivery, scooters) appear to have even worse profit margins than car service, and their sole purpose appears to be to boost revenue growth rates, and mislead naïve investors that Uber has Amazon-like potential for profitable long-term growth and can become the “Amazon of Transportation.”

Why belabor the lack of any bona fide business logic behind the Uber scooter venture? Because the financial press faithfully parroted Uber’s ludicrous claims.

But Uber hasn’t stopped believing its own PR. Uber vowed to increase its investment in e-scooters and bikes. It invested $170 million into e-scooter company Lime, the bete noir of San Francisco pedestrians and is conveying Jump, a company it bought for $200 million in 2018, to Lime as part of that transaction.

BBC, CNBC, and others reported on Uber’s “recycling,” as in destruction, of now surplus bikes after selling its electric bicycle and scooter business to Lime. The local transportation company claimed it was oh too hard and risky to donate the vehicles. Representatives from charities in that space disagreed. From CNBC:

Uber is scrapping thousands of electric bikes and scooters worth millions of dollars after selling its Jump unit to mobility start-up Lime earlier this mont…

Uber was keen to point out that while many bikes and scooters are being scrapped, “tens of thousands” of newer models are in the process of being transferred to Lime….

“We explored donating the remaining, older-model bikes, but given many significant issues — including maintenance, liability, safety concerns, and a lack of consumer-grade charging equipment — we decided the best approach was to responsibly recycle them.”

Uber trashing bikes good enough for customers elicited lots of criticism. From Endgadget:

Lime partners with a number of organizations that have a vested interest in promoting bike-friendly streets and micromobility access, like the Los Angeles County Bicycle Coalition, Denver Streets Partnership and Seattle Neighborhood Greenways. Bike Durham, a North Carolina biking advocacy group, said on Twitter that they would be happy to take on these Jump bikes: “Our local bike co-op @DurhamBikeCoOp has been able to re-purpose many old @ridespin bikes that were donated. Contact us @Uber! Let’s make better use of these bikes.” It’s hard to imagine any of these organizations couldn’t find a better use for thousands of e-bikes, even if they weren’t in perfect shape.

If I understand this correctly, liability to Uber was largely if not entirely about the condition of the batteries. Removing them solved that problem….and also meant the excuses for not giving them away were bogus.

Slashdot adds:

The decision to destroy these bikes comes amid a national bike shortage. “We have never seen anything like this in a very long time,” said Dave Nghiem at College Park Bicycles in College Park, MD. “We have never locked down half the planet like this so they can’t do their jobs to build bikes. So, no one has been building bikes for three months. If no one is building bikes, there’s no bikes on the continent,” said Dave.

Uber’s excuse for not ‘splaining its bike and scooter business performance was that they weren’t material, which of course begged the question of why they were worth mentioning. Apparently being “not material” means it’s OK to toss assets away that would be very valuable in other hand, and not hard to pass to them.

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49 comments

  1. fajensen

    If I understand this correctly, liability to Uber was largely if not entirely about the condition of the batteries. Removing them solved that problem….and also meant the excuses for not giving them away were bogus.

    If they had just auctioned them off, like all normal people would, their “liability” ends at the closure of the sale, even if they went at 1 cent per lot!

    They are afraid that someone would somehow make a success from their failure.

    Reply
    1. Yves Smith Post author

      Not necessarily. There are tons of cases in the US where you would think the seller/property owner could not be deemed to be a fault, yet the buyer/customer won a big court judgment. If someone has hidden information, even an “as is” sale agreement can be challenged as being entered into under deception. And juries tend not to like deep pockets, plus Uber has a huge rap sheet which would also impress a jury (correctly) that they were a serial bad actor.

      So I don’t think auctioning would be wise, but I see no reason not to have given them to charities.

      Reply
      1. PlutoniumKun

        I’m surprised at this – don’t (for example) car hire companies bulk sell off used vehicles all the time without having a liability issue? Similarly with car/van leasing companies. I don’t see how bikes could be all that different, although I could see how there could be an issue with batteries.

        Reply
        1. Bugs Bunny

          If a US rental car company sold you, for example, a Tesla, and its battery exploded and burned your garage down, you would likely have a cause of action against them unless local law specifically excluded it or has a specific provision (“lemon laws”). Otherwise this is covered by the Uniform Commercial Code. If a bike exploded, Yves is right – Uber would be seen as a deep pockets defendant and some law firm(s) would get a giant class action up and running quickly.

          They should have given them to local charities – there are plenty of community colleges that take car donations for mechanic training. They’d probably have been happy to kit these out and get them to poor communities.

          Reply
        2. HotFlash

          In the US and Canada, at least (don’t know about elsewhere), rental agencies lease the cars. They are returned to the leasing agency, usu a sub of the mfr, at the end of the lease. Under terms of the lease, the warranty maintenance is all done on time so the cars are in pretty good shape. They will turn up on the used car lots, usu of the mfr’s dealers, but sometimes are wholesaled to independents. Seems as if Uber owns the bikes outright, which is a different situation.

          Uber’s task in the ‘sharing’ economy is as shock troops to break down the power of people to control their municipalities thru laws and regulations, as it it Amazon’s as a siege engine to starve cities and states by end-running sales and local property taxes, and drive to local businesses, which have to pay these costs, into bankruptcy. Billionaire investors will keep shoveling $$$ at them so long as these goals are met, and don’t care if either ever makes a dime.

          Reply
      2. Yellow-Lyft

        This is a huge waste of resources as well as serviceable vehicles that could have been put to good use by any number of organizations. WASTE , pure and simple. It was done by an organization that said to the World, “I can’t have them and neither can you”. As far as the legal issues, during my many years on this planet, I’ve learned that there are attorneys hiding behind bushes that are willing to sue anybody, at any time, for any thing, anywhere. I guess they’re just proud to have passed the bar but that’s just a guess. If you chose a bike at an auction, and during the completion of the sale, signed a release form, promising NOT to hold UBER liable for anything related to this bicycle, you would get 98 percent compliance. For the other 2 percent, see above paragraph starting with “As far as”…….

        Reply
      3. Patrick L Kitts

        Does anybody know the business details of Uber’s Jump sale to Lime? Maybe it included the understanding that Uber’s existing stock of E bikes would be destroyed. From a certain, but very selfish perspective that could be seen as advantageous to Lime. The less number of E bikes in circulation, etc. From an even more selfish perspective, the less ways there are of getting around altogether, the greater the chances of taking an Uber? Considering everything I know about Uber, the second perspective seems more likely. Next targets for Uber’s transportation market dominance; canes, walkers, crutches and wheelchairs.

        Reply
  2. Noel Nospamington

    If the tech giants paid their fair share of corporate taxes, then Uber would have been strongly incentivized to donate these bikes (with their batteries) to government or charity, in order to obtain tax deductions. The receiving entities can then absolve Uber for any liablies regarding the donates bikes and their batteries.

    Seeing the destruction of so many bikes is a crime against the environment, especially when you consider all of the energy and non-recoverable materials that go into making each one.

    Reply
  3. PlutoniumKun

    This is appalling. I don’t know the situation in the US but in must of Europe the lockdown has created an enormous cycling boom (helped, it should be said, by amazing May weather in Britain and Ireland). A colleague told me yesterday that she was told by her local bike shop that she’s have to wait 3-4 months for delivery of an electric bike she has ordered for commuting. Bike shops here simply can’t get in enough stock to fulfil demand for any type of bike. Uber could have sold those bikes to a distributor in an instant if they really tried.

    It may, however, be economically rational for them to destroy them. A few years back the Dublin city bike scheme did some research on users which they quickly suppressed. The rumours were that they were expecting to find that the bike scheme reduced car commuter use, but instead found that by far the greatest number of ‘replacement’ trips were from taxis – they were afraid that the research would provoke a negative response from the taxi industry when they realised (if they don’t already) that bike/scooter schemes mainly take trips from them. Personally, I haven’t taken a taxi in about a year, mostly because I can pick up a city bike at my door, I’ve not found yet a trip I couldn’t take better by bike or bus/train than taxi.

    Based on this, I would not be in the slightest bit surprised if Uber had not decided to be wreckers rather than creators when it comes to bike/scooter schemes. Yet another reason why public bike/scooter provision should be a public infrastructure service, not something dependent on private industry.

    Reply
    1. Yves Smith Post author

      That does not surprise me in normal times but these are not normal times. Many people have lost income or afraid they will soon. And there is coronavirus risk in using a cab. A study in NYC found that cars were a big transmission vector, even bigger than the subways. Perhaps people take more care with masking up, gloves, goggles, and hand sanitizers in an obviously risky subway than they do in a seemingly safe car.

      Reply
      1. Bob Hertz

        Cars were a transmission vector?

        That seems unlikely to me. My unscientific but extensive reading on the virus seems to discount surface transmission as a vehicle for the virus in any significant way.

        Thus the closing of libraries enrages me. No one is getting the virus from a book.

        Reply
        1. Whiteylockmandoubled

          Libraries aren’t your private bookshelf. They’re public gathering spaces. It’s not about the books. It’s about the public health impact of managing the flow of hundreds of people through a public area on a daily basis, many of them in high risk categories (elderly, homeless).

          And they didn’t close. They went full digital for the duration.

          I love libraries. I love physical books. Looking forward to the day I’m back in front of the stacks. My wife is a librarian with a chronic illness. So be as enraged as you like. I’m glad she’s alive.

          Reply
          1. juno mas

            Yes. My local community college has gone full digital. Students can access just about any book on the planet that is in e-book format for free. I like reading a real book, better than an e-book. But I also like being virus free even better. (Being at the Circulation desk of a library is asking for contagion.)

            My local Central Library has been full no-contact
            book check-out for years. They, too, have gone full digital. It is simply too costly to have patrons in the library. New normal?

            Reply
          2. Bob Hertz

            The libraries that I visit are all pretty suburban here in MN. No homeless people go into them. I realize that downtown libraries have a homeless issue.

            I never see anyone within 10 feet of another patron except at the checkout desk. That could be controlled easily enough.

            I am of the minority opinion that if you control super-spreader events like Mardi Gras or soccer matches or concerts, you are 90% of the way toward restraining the virus.

            Even if a library user did get infected, their chance of getting seriously ill is very small.

            By the way I have chronic leukemia. I would not hesitate to go into a suburban library and keep my distance. If the library passed out a mask to every patron, all the better.

            Reply
        2. Sacred Ground

          “no one is getting the virus from a book”

          True. They are, however, getting it from spending long stretches of time in an enclosed space with dozens of other people, any of whom could have it and be spreading it by breathing.

          Still enraged? Yeah, probably. Rage isn’t rational.

          Reply
    2. Michael Fiorillo

      Can someone in the NC commentariat provide a semi-valid argument for why electric bikes are not straight-up evil?

      They remove a human-powered vehicle from the streets, and replace it with one whose potential energy – embedded in the battery – will take years, if ever, to become a net positive. Then there is the issue of safely (ha!) disposing of them.

      I won’t even begin to talk about the recklessness with which they’re too-often ridden, and the dangers they pose to pedestrians.

      Happy to be corrected by someone with more knowledge of the technology but, Uber’s predictable psychopathology aside, electric bikes may be fun and convenient, but are an environmental fraud and shandah (shameful act).

      Reply
      1. Dwight

        I hate when electric bikes silently pass me at high speed on flat bike trails. Electric bikes on bike trails should be ridden at bike speed. If people don’t want to sweat in their work clothes, fine, use the motor, but not to get to work faster. I ride fairly fast and it is hard to judge safe passing of a pedestrian when these people come flying up.

        Reply
      2. Appleseed

        I have several friends with e-bikes and their arguments in favor can be summarized as follows:
        • The e-bike is still human-powered. The battery provides an assist which is helpful in stiff headwinds and climbing steep grades. So the rider still realizes the health benefits of exercise – a net plus for obese Americans.
        • My friends are in their 70s (and not obese) but maintain the e-bike has extended their bicycling years by a decade thanks to the battery assist. It’s important for all people (esp. older folks) to get exercise, fresh air, and visual stimulation.
        • These folks use the e-bike in lieu of a car for trips which is also a net positive. Thanks to battery assist they can load up their racks and panniers at the grocery store or dog food store.
        • Thanks to the battery, the onboard lighting system is superb and helps encourage them to ride at night because they feel like they can see the road ahead and be seen by others.

        These anecdotes are for personal bikes. I’ve seen electric cargo bikes in commercial use around town and they strike me as an alternative to a diesel box truck or gasoline powered cargo van.

        Naturally, these anecdotes in no way invalidate your relevant observations about battery disposal and reckless users. I am hopeful that battery recycling improves as the market for such components grows and I still hold out hope that widespread education will improve relations between bicyclists, pedestrians, and motorists.

        Reply
        1. Michael Fiorillo

          Appleseed,

          While granting that NYC, where I live, is an outlier in many respects, I have never once seen an e-bike ridden by an elderly person; they are almost invariably ridden by exploited workers delivering food, their exploitation goading them to ride recklessly and endanger themselves and pedestrians. I also ride my bike on rail trails and local roads/streets in the Hudson Valley, where I have never once seen an older person riding one for exercise or transportation.

          Also, my (very limited) understanding of the technology is that the batteries cannot be charged by braking or peddling the bikes themselves, creating an incentive to use them exclusively as motorized transportation. Given the batteries relatively short lives, they will likely never be a net energy saver.

          Sorry, but I see no way of looking at these things as anything other than fraudulent (from an environmental perspective, though I’m sure they’re fun to ride) energy sinks and near-future toxic waste. Add the involvement of companies like Uber, and the dishonesty and wastefulness becomes even more apparent.

          Reply
          1. juno mas

            I share your dismay over the irresponsible and sometimes dangerous us of e-bikes. The battery recycling issue is real.

            In my coastal tourist town e-bikes are increasing. Often the users rarely pedal and rely solely on the battery. Many have passed me traveling at the California limited e-bike speed of 18MPH. (That is well above the travel speed of most pedal bike users and a dangerous impact speed for pedestrians unaware of their approach.) Many families have the extended length transport bikes (for kids and groceries) and do replace auto use.

            A bike is the most efficient form of human-powered transportation. Unless the pathway is over 5% grade, or windy, the muscle-power needed to move is minimal. Unless, of course, you are overweight. Then, a non-electric bike is the perfect transport vehicle: low-impact, large-muscle effort (legs) activity likely to induce calorie consumption and physical fitness. Many Seniors would also gain needed leg strength necessary to help prevent falling in daily activity. (Many ride tricycles on my local beach way (bike/pedestrian path).

            As for lighting, that’s bogus, Appleseed. I have a battery powered LED lights that are rechargeable and flash with the intensity of any light on an e-bike. I do not recommend riding on a roadway at night for ANY reason, in the US. Inattentive (mildly intoxicated) drivers abound!

            And lastly, bicycle technology has improved to the point that many weigh under 30 lbs.
            Most e-bikes I’ve examined weight in the 70 lbs. range. They are difficult for inexperienced user to handle when making emergency maneuvers: like avoiding the random lateral moves of pedestrians (especially children).

            Reply
          2. rusti

            I have never once seen an e-bike ridden by an elderly person; they are almost invariably ridden by exploited workers delivering food

            It’s pretty common here in Scandinavia. I bike over a big bridge as part of my commute and I’m always competing with old ladies on e-bikes on the long uphill.

            Given the batteries relatively short lives, they will likely never be a net energy saver.

            Why does this need to be the case? 250W for max assist (higher than that and it’s classified as a moped) isn’t a huge power discharge and usually it’s much less than that, so they can be deep cycled quite a number of times whether they’re Lithium-Ion or Gel. It’s a pretty energy efficient mode of transportation to have mild electric assist on a bike.

            Like Appleseed I don’t think your criticisms are invalid, but it really seems to me like it’s a mode of transit that could conceivably replace cars for a lot of journeys if the right infrastructure and incentives were in place.

            Reply
            1. Michael Fiorillo

              Rusti,

              We appear to be seeing e-bikes used very differently.

              In NYC, I’d venture to say they have done nothing but replace human-powered bikes, and replace car trips in less-than-miniscule numbers. They may well have some benign supplementary uses when used responsibly (which is far from the norm, based on my anecdotal observations) but are energy and resource-intensive, and the batteries still have to disposed of carefully when exhausted… a net carbon energy sink, contrary to their green marketing.

              Not to over-dramatize, but from where I sit, they’re yet another plague, in a plague-ridden land.

              Reply
              1. juno mas

                I just returned from a day at the local harbor. On my drive home I came upon an electric bike user. According to my accurate auto speedometer he was travelling at 25MPH up a slight (5%) grade and was not pedaling. He was in LeMond mode: slipstream crouch.

                That, my friends, is a motorcycle!

                While he was travelling in a bike lane, in California e-bikes are supposedly limited by the manufacturer to 18MPH and 350 watt power drive, and not allowed on designated bike paths.

                Reply
      3. doug

        Personal ebikes replace cars in many instances. Watt/hour per mile is minuscule compared to any automobile.
        Any bike can be ridden irresponsibly.
        Not sure what country you are in, but maybe check out some european countries where there are millions of ebikes on the road.

        Reply
        1. juno mas

          Personal e-bikes do not replace cars , in many instances. In the US less than 2% of the population ride a bike to work; in college towns overall bike use max’s at ~5% of total population.

          Comparing e-bike power use to an electric car is to dissemble. The comparison is to a human powered bicycle. Pedal-assisted e-bikes have become throttle-assisted bikes that are ridden like the motorcycles that they are. (Except there is no training required.)

          Yes, any bike can be ridden irresponsibly; and they are. The fact that many are NOT ridden on the roadway and at max motor speed (18MPH in CA) by people who are inexperienced among slower moving traffic, makes them a dangerous addition to two-wheeled travel. (This ignores their impact as off-road vehicles in hilly terrain.)

          They do have utility–as cargo transporters (including kids). But many use them for play, without the physical exertion. Yes, the market for e-bikes is large in Europe. Many of them are used to satisfy lazy/overweight Americans in their “trek” along canals.

          Reply
      4. WhichDoctor

        Dude… No we can’t, anymore than settle the nuclear debate or explain how the MAD doctrine can lead to fair arms or if the greatest trick the devil ever pulled was teaching us about angels and pins..i will say, calling someone ‘an Uber’ is the best insult (bar Amaz** shopper who wilfully disregard so, so much) because what do they do for the (necessary) essentials of life. Pollute and wait around to the detriment of the legacy industry, blur self and employment, take orders from a phone for an entry level position I believe the entry requirements used to be quite high and strict for, for money all of which I have done too but what I can’t forgive, they eat the depreciation and running costs for middlemen, with a smile like homeworkers will have to fight against. Yesh sir, you’se an Uber (not you, just trying for size:)

        Should probably credit Drake for pointing
        out you don’t ‘call’ an Uber but he’s enuff props!

        Reply
    3. Knifecatcher

      Anecdotally bikes are thin on the ground in Denver as well. I’ve been looking for a pair of standard, non-electric bikes for my wife and son. Places like Dick’s Sporting Goods are completely picked clean and the independent bike shops will tell you they don’t know what inventory they’re getting or when. And if a halfway decent deal pops up on Craigslist it will be gone in an instant.

      You can still find plenty of high-end $1000+ bikes at the bike shops but decent quality low to mid level bikes are very scarce.

      Reply
  4. Ignacio

    E-bike or e-scooter sharing can only work IMO as a public service managed by the municipalities. It is another example of activity that benefits the most when there is a single public sharing net, a natural monopoly. The Fed could should grant municipalities the neccesary resources to invest on it and make it rational. In Madrid the public e-bike service functions or functioned rather well. So well that the neolibs in power decided long ago to stop investing on it and instead, let it sink. Privately owned initiatives have shown to be a mess because they do not invest in the necessary infrastructure nor they have the power to decide where the bike/scooter parking lots have to be buildt and a real sharing activity is not about big fat bonuses for business owners. You can have one of both, but not both.

    Reply
    1. PlutoniumKun

      Yes – although some of the share schemes in Ireland have been a huge success, at least one small city had a disaster with one operator.

      It shows how deeply neoliberal thinking has set in that public ownership is rarely, if ever considered. I once had a casual conversation with a local Council official here who had been involved in the Dublin system. When I mentioned that it would have been better if the Council simply bought and provided the bikes and software themselves, it was clear from the response that this option had, quite literally, never actually occurred to them. Even public employees have been quite literally brainwashed into thinking that only private operators can run these things. And these are in organisations that are rightly proud of having in the past delivered huge water and sewerage projects, entirely self financed, constructed, owned, and managed.

      Reply
      1. rusti

        at least one small city had a disaster with one operator

        What operator was this? My city in Sweden is in the process of rolling out a new, expanded system from nextbike after having used one from JCDecaux the past few years.

        It’s a really nice subscription model here with cheap, subsidized annual subscriptions that offer unlimited free rentals for 30 minutes at a time (enough time to get from one station to another). An account can be associated with an RFID tag for quick two-step authentication check-out as well, so I use my public transit card and a PIN. In Lund, where I visit frequently, it’s only 8 Euro for an annual subscription.

        Reply
        1. PlutoniumKun

          I can’t recall the details, it was something that was much discussed on social media a year or so ago, but the city is Limerick, with the main contractor a company called Telfourth, via a local company associated with a small local bike touring company. Much of the controversy was around the winning contractor being something of a shell company with (so its claimed, I don’t know the details) a very opaque ownership structure.

          They have completely failed to maintain the bike system according to what I’ve heard, although there are a lot of arguments going on between the Irish national transport agency, the local council, the company, and various local interests.

          Reply
          1. rusti

            Interesting. I can see how an unmotivated owner/operator (especially a foreign one) could let the system fall into disrepair if they were only concerned with short-term profits. It seems wasteful for a bunch of cities to build out their own wholly independent hardware, payment and IT systems for the terminals unless they’re mega-cities with those kinds of resources. Maybe a better model would be to have terminal vendors and bike vendors and municipalities could keep operational responsibility in-house.

            Reply
  5. The Rev Kev

    Could Uber have donated these bicycles? Sure they could have. But instead, they destroyed them. Why? Based on an anecdote that I read a long time ago, I believe that the operative principle on display here is this-

    Never do anything for anyone unless it is of direct benefit to yourself.

    It all makes more sense when you keep this in mind.

    Reply
  6. Hayek's Heelbiter

    Re a smashingly successful implementation of bicycle scheme.

    Last night, around 11 p..m., I went on my first bike ride since my college days four decades ago, using a rental scheme nicknamed “Boris Bikes.”

    I was astonished how easy was. A friend and I checked out bikes near Old Street on our bank cards, then cycled around the deserted City of London – it was an amazing experience, like being on the set of 28 Days After [from Wikipedia].

    The plot depicts the breakdown of society following the accidental release of a highly contagious virus.

    Fortunately, sans violence, but this was real!

    Eventually, we rode the bikes back to Whitechapel and checked them in. One of the smoothest transactions in recent memory.

    https://en.wikipedia.org/wiki/Santander_Cycles#History

    Santander Cycles (formerly Barclays Cycle Hire) is a public bicycle hire scheme in London, Swansea, Milton Keynes and Brunel University in the United Kingdom. The scheme’s bicycles are popularly known as Boris Bikes, after then-Mayor of London, Boris Johnson, who introduced them during his tenure.

    The operation of the scheme is contracted by Transport for London to Serco.[2] Bikes and docking stations are provided by 8D Technologies. The scheme is sponsored, with Santander UK being the main sponsor from April 2015.[3]

    Reply
    1. Tom Doak

      That would work just great if Uber was profitable, but you can’t write off a loss against other losses!

      Reply
      1. Anarcissie

        Also, Uber may have obtained the bikes and scooters under an arrangement that prohibited selling or giving them away. Back in the ’90s I was working at a certain monster brokerage house where everyone had an IBM PC on their desk. For some reason they decided that everyone had to have a more advanced PC, and they put the old ones in dumpsters. I asked a middle-upper manager of my acquaintance why they weren’t being sold or given away and he said that the terms under which they had been bought prohibited both resale and donation. However, he did offer to ‘lend’ them to any employee or contractor who wanted one or two for ‘work’ at home — where they would then be forgotten — as long as they did not sell them or visibly give them away. I could have taken half a dozen but I didn’t have room for them. But hundreds and hundreds were destroyed. There was nothing wrong with them and they would have been of great use to many people who could not otherwise afford them.

        Capitalism depends on the production and preservation of scarcity. Along with war and consumerism, waste is a good way to produce lots of it.

        Reply
      2. John Wright

        I’m no accountant, but couldn’t Uber have added the loss to its existing loss total?

        If the losses can be transferred to an eventual Uber acquiring company, some of Uber’s future value may be in the losses it brings to another company looking to save paying corporate taxes.

        Those Uber losses may be worth some real money to a profitable company such as Apple, Microsoft or Google, even if they simply shut Uber down and pay off the creditors (at a steep negotiated haircut)

        Please, someone with more tax law understanding correct me if I’m in error.

        Reply
  7. Samuel Conner

    My interpretation is that they got into the e-scooter “sharing” “business” for the sake of perceptions management — “Look — we’re expanding our markets! Buy our shares!”

    One would think that they would have thought a little about the implications for “public perceptions of Uber” of this move. It can’t even be justified on a Keynesian “keep the glaziers busy” basis since new output is depressed.

    I take it to be a hint of sociopathy at the top.

    Reply
  8. Howard Beale IV

    This type of behavior isn’t new – GM would routinely destroy computers and peripherals after they have been fully depreciated and were taken out of service.

    Reply
    1. rusti

      I was a bit surprised when I got into the automotive industry to realize that there are a zillion pre-production vehicles that get destroyed because they can’t be sold with parts that aren’t made with serial production tools. Usually they get driven a moderate amount for testing and verification, then they sit around in purgatory so useful parts can get stripped if needed and then they get sent to the crusher. To the casual observer there’s no discernible difference between those and the ones at the dealership.

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  9. LowellHighlander

    All of which points to the brilliance of Ms. Annie Leonard’s insightful economic treatise (in video) called “The Story of Stuff”.

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  10. Jeff N

    Here in Chicago, we have a charity called Working Bikes that refurbishes old bicycles and ships containers full of them to third-world countries. This would have cancelled out Uber’s worries that free bicycles could cut into their US driving profits.

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  11. jef

    The concept of renting a bike, which has been widely available forever, as a “Tech Start-up” attracting billions in VC is ludacrous. Nothing ride -sharing about it. The original concept of ride share was an app that you could post, “hey, I’m here and need to go there. Anybody heading that way?” or “hey I’m here and I’m going there. Anyone need a lift? The concept was that this would reduce cars on the road and miles driven with just one person in a car

    Back in the old Peak oil daze a group in our town took in discarded and donated bikes, fixed them up, then gave them to those who needed them, whether for a day or permanently.

    China is way ahead of us. Millions of “ride-share” bikes thrown away.

    https://www.google.com/search?q=huge+piles+of+bikes+in+china&rlz=1C5CHFA_enUS789US789&sxsrf=ALeKk00H6G9Y-EOYhg5y2encnjn2UheMRQ:1590767534104&source=lnms&tbm=isch&sa=X&ved=2ahUKEwjJ_ajuttnpAhVuJzQIHZMSD3wQ_AUoAXoECA0QAw&biw=1440&bih=766

    When I was a boy we would checkout small reptiles, rodents, and some of us who volunteered at this museum got to check out raptors. Great idea for a Tech Start-up, any intere$ted parties?

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  12. Kirk Seidenbecker

    Fascinating pictures of those bicycle graveyards.

    Just one quibble with the main post – “libertarian narcissists” is redundant.

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  13. ChrisPacific

    There was an article a while back here about Jump (Uber at the time) doing this with a lot of e-scooters. They had piled them all up for disposal in a big heap but not deactivated them or removed the batteries yet. Being stacked up had triggered the anti-tampering protocols in many of them so they were all calling for help, which was probably a bit more symbolic than intended.

    Reply

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