Hubert Horan and Izabella Kaminska: Can Uber Ever Deliver? Part Thirty: The “Uber Files” Are Not the Uber Exposé You Are Looking For

Yves here. Welcome back to Hubert Horan, and now Izabella Kaminska, another friend of the site, with their latest sightings of the ongoing Uber soap opera. Below they review the Uber Files expose, describing in detail how it fell short by ignoring Uber’s inherently uncompetitive economics and how those provided the impetus for its lawbreaking and other aggressive behavior.

By Hubert Horan and Izabella Kaminska and cross-posted from Kaminska’s site The Blind Spot. Neither author have any financial links with any urban car service industry competitors, investors or regulators, or any firms that work on behalf of industry participants

What the gilet jaunes protests in France could not achieve, a recently published exposé about ride-hailing unicorn Uber [1] is apparently on the verge of doing: getting French President Emmanuel Macron to resign.

According to French media opposition leaders [2] incensed by revelations that Macron had backed and facilitated the rollout of the Silicon Valley darling in its heyday period from 2014 to 2016, are now calling for the president’s resignation.

And yet, the big mystery at the heart of the whole story is why should “revelations” that have been known for years reemerge in such dramatic form today? Even more inexplicable is how an investigation of this scale could miss the actual story at the heart of the Uber phenomenon: the fact that Uber’s business model was patently suspect from the very beginning and should never have received the massive support from capital markets and the political and media establishment that it did.

Let’s take a closer look at the details of the story but also at the media framing of the whole thing.

On Monday, July 11, The Guardian published a series of articles based on “The Uber Files”, [3] a trove of over 100,000 emails, memos, and other internal Uber documents from between 2013 and 2017 that had been provided to the Guardian by Mark MacGann, one of Uber’s top European lobbyists.

The lead headline framed the story thusly: “Uber broke laws, duped police and secretly lobbied governments, leak reveals”. The story aimed to demonstrate that Uber knew it was breaking laws.

Soon after, another story on the same day introduced the leaker: “The Uber whistleblower: I’m exposing a system that sold people a lie.” [4] In this story, MacGann admits that the claims he fed to politicians about benefits for drivers and cities had never been true and says he came forward to ‘right some fundamental wrongs’.

Subsequent stories provided additional background on the Uber PR/lobbying programme MacGann had supported, including the crucial role played by David Plouffe, Barack Obama’s former chief of staff [5] . Also, how Uber had paid prestigious academics to produce findings that would support their PR narratives [6] and how Uber PRs misled drivers about their potential earnings and worked to disrupt driver protests. [7]

The Missing Links

In some regards, The Guardian series represents a noteworthy breakthrough. Despite the significant media attention that Uber has courted throughout the years, this is the first time any mainstream media outlet has bothered to step back and attempt a “big picture” review of the gig economy giant.

Everything in the Guardian series is factually accurate and offers readers – especially those not following the saga closely – a good overview of Uber history.

But readers looking for a “big picture” evaluation of Uber will quickly realise that The Guardian series has failed to address a number of critical questions. These include:

  • Can some of Uber’s bad behaviour be partially justified by the positive contributions it made to the productivity of the urban car service industry and overall economic welfare?
  • Were the hyper-aggressive approaches described in the series widespread within Uber or limited to a few out-of-control individuals? If there was bad behaviour that went far beyond what was legal, appropriate, or necessary, why was it never reined in?
  • Was this bad behaviour critical to driving Uber’s rapid traffic and valuation growth, or was it largely incidental?
  • How do the false claims about the benefits Uber would create compare to what large companies routinely do to create positive public impressions and to increase political/media support? Why did these “lies” remain largely unchallenged?
  • While the “Uber Files” ended in 2017, did false PR claims and other problematic behaviour stop after Dara Khosrowshani replaced Travis Kalanick? How did these post-Kalanick changes affect Uber’s marketplace and financial performance?

Uber’s Economic Reality

A point often overlooked in Uber media coverage is that in 12 years of operation the ride-hailing app is yet to produce a dollar of positive cash flow. As of the end of 2021, Uber’s ongoing car and delivery services had produced GAAP net losses of $31bn. [8]

The other too frequently untold truth is that rather than being a beacon of transportation progress, Uber is actually a substantially less efficient, higher-cost producer of urban car services than the traditional taxi operators it has driven out of business. Uber’s business model has never had any ability to profitably produce very large-scale operations at prices the market is willing to pay.

Uber’s rapid growth and ability to drive competitors out of the marketplace have never had anything to do with superior productivity driven by technological breakthroughs. They were driven entirely by tens of billions in unsustainable and predatory subsidies provided by investors who had hoped that some combination of network and scale economies would allow Uber to achieve global dominance of the car service industry. [9]

The major problem with The Guardian’s “Uber Files” series is that it totally ignores the economics of Uber’s business model. Uber’s massive losses are never mentioned. Nor does the series mention the staggering and totally unprecedented $20bn in investor funding, 2300 times the pre-IPO funding Amazon required.  It makes no attempt to explain how Uber’s investors thought they might eventually generate sustainable profits, much less returns on that level of investment.

In the grand scheme of things, Uber has contributed absolutely nothing to overall economic welfare. Thus there was never any tradeoff of bad behaviour versus benefits produced to consider. The short-term consumer gains it claimed to deliver (lower prices/increased service) were always unsustainable. In reality, the model did not improve the overall productivity of urban taxi services, which means its stock price never had anything to do with future profit potential. Uber’s efforts to suppress driver compensation and steamroll local officials trying to enforce longstanding regulations were purely destructive. So too was its effect of driving more efficient competitors out of business, increasing congestion and diverting traffic that weakened local transit systems.

Ignoring economics and focusing on the actions of aggressive lobbyists and local managers in isolation makes it difficult forThe Guardian’s readers to understand what was motivating this behaviour or whether it was limited to a handful of irrational, out-of-control individuals.

The toxic behaviour makes much more sense, however, if one understands that Uber was always misselling its longer-term profit potential and its ability to provide the market with vastly more service at much lower prices. Uber isn’t then just a company with poor-work culture. It’s a company engaged in a confidence trick on society.

Consider all the elements of the Guardian’s stories in that framing, and you begin to see a highly integrated and rational strategy deployed from the outset:

  • Deliberately disobeying longstanding laws and regulations.
  • Using an unprecedented level of lobbying expenditures to convince politicians that those laws should not be enforced.
  • Conducting massive propaganda-based PR campaigns based on manufactured narratives about how letting Uber do whatever it wanted would produce massive benefits for consumers, drivers, and the cities it served.
  • Aggressively publicising how the combination of the monomaniacal culture Kalanick had created and the billions in investor cash Uber had raised could be used to obliterate the competition in order to convince politicians and the media that its eventual success was inevitable and any resistance would be futile.

Uber’s investors were pursuing the stratospheric valuation growth that other unicorns had achieved. The foundation of companies like Amazon and Facebook were major productivity and product breakthroughs. Powerful network and scale economies allowed them to achieve dominant industry positions, and once dominant, they could readily exploit anti-competitive market power.

But Uber’s business model lacked any material efficiency or productivity advantages from the beginning. It didn’t have the huge scale or network economies that allowed other unicorns to “grow into profitability.” Its corporate development strategy was to skip the difficult “build a foundation based on major productivity and product breakthroughs” phase of the development journey and move directly to impregnable industry dominance and the ability to exploit artificial anti-competitive market power.

It is absurd to argue that the toxic behaviours reported by the Guardian were due to aberrant behaviour by a few bad actors. Uber’s investors wanted managers to pursue the company’s meteoric growth at any cost and knew that this ruthless, hyper-aggressive behaviour was the only way to deliver it. [10] Uber’s investors never uttered a word of complaintabout the terrible publicity this bad behaviour was generating until it threatened the huge returns the 2019 IPO was supposed to produce.[11]

As Uber’s huge losses and cash drains demonstrate, its rational strategy to use predatory subsidies, PR, lobbying and its hyper-aggressive culture couldn’t totally overcome economic reality. Perhaps due to drinking some of the PR Kool-Aid they were serving the public, Uber’s investors seemed to think that anything that could be described as an “app-based network” would generate significant value, at least large enough to eventually produce positive cash flow. What’s more, the presumption that Uber could use artificial market power to drive profitable growth was also incorrect; Didi had achieved a 95+% share of the Chinese car service market but has never generated meaningful profits.

A Political Coup, Not a Business Proposition

Uber’s explicit political objective was to seize control of a portion of urban transport infrastructure from the voters and taxpayers that had long controlled it and totally destroy the public’s ability to exercise any oversight over these services (including safety and insurance rules). Urban car services would only exist if capital accumulators could earn outsized investment returns.

No city government anywhere, following deliberative processes open to the public, voted to either suspend all pre-existing taxi regulations or to transfer control of local taxi service to private investors who could not be held accountable if promised levels of service, prices and jobs failed to materialise. But that’s what Uber’s massive lobbying and PR efforts accomplished.

Uber’s investors seemed to believe that simply claiming to be a “tech company” that had produced an “app” eliminated the need to actually understand the industry they were trying to “disrupt.”

They did not understand that the economics of quasi-public goods like urban transport were radically different to the discretionary consumer industries other tech companies had tried to disrupt. Uber’s business model had not solved any of the longstanding problems that had made taxi service unpopular and economically marginal. Uber could never explain why even though taxis and all other forms of urban transport had required public ownership or tight regulation for over a hundred years, they would suddenly become an economic powerhouse worthy of nine-digit stock market valuations if converted to a pure laissez-faire private investor structure.

Uber is not the only company to make claims about the benefits it creates that ultimately do not withstand scrutiny. But Uber’s hyper-aggressive lobbying and PR activities went way beyond what other Silicon Valley-financed startups were doing at that time.

The issue was not the specific claims about job creation and happy drivers that MacGann feels remorseful about. The bigger, much more serious PR/lobbyist “lies” were that Uber was a legitimate company that could eventually produce sustainable profits and broader economic benefits. Also, that Uber should be granted full laissez-faire freedoms, without any evidence that this could produce substantially more efficient taxi services than had existed previously. And that it should be free to operate without any accountability for actually producing the sustainable benefits for consumers and cities it promised, and without any protections for the companies and jobs destroyed by its highly predatory behaviour.

The narratives Uber was manufacturing were designed to conceal Uber’s actual economics and to mislead investors and the cities whose taxi services had been decimated by Uber’s pursuit of unicorn-like valuations.

These narratives created the widespread perception that Uber was a highly innovative and successful company that had revolutionised urban transport, and which could achieve the long-term growth and profit potential to justify its massive (currently $42bn) valuation. [12]

These perceptions remain powerful despite overwhelming financial evidence to the contrary and despite the fact that all of the narrative claims that created this perception are demonstrably false.

Empowering Uber’s Counter-Narratives

By ignoring Uber’s economics, The Guardian has allowed Uber PRs to undermine the series by claiming that all of the bad behaviour reported is down to a small number of aberrant people who no longer work there. Uber has further claimed the behaviour was inconsistent with board-level objectives and strategies, and that all of the problems from that era were solved when Dara Khosrowshani replaced Kalanick.

Uber does appear to have shaved off some of its rougher practices. For example, the use of Greyball technology to obstruct law enforcement has been eliminated.

But there’s little evidence that the change in CEOs did anything to solve Uber’s core problems. After four years, Khosrowshani has done nothing to solve the problem that Uber’s business model is incapable of generating sustainable profits. And Uber is still manufacturing narratives designed to conceal Uber’s actual economics and to mislead investors about its growth and profit potential. It continues aggressively lobbying to prevent any meaningful public oversight just as it did when MacGann worked there.

Ignoring economics also allowed Emmanuel Macron to undermine the series by arguing that he was only helping Uber to support innovation and job creation as any smart politician would. The more substantive criticism of Macron (and other openly pro-Uber politicians) is that he was aggressively working to help Uber drive existing French taxi operators out of business without any evidence this would actually produce meaningful benefits for French consumers, workers or cities.

He was not trying to ensure that a new competitor would have the “level-playing-field” opportunity to compete so that the “marketplace” could determine the outcome. He was working to rig the marketplace so a company with $20bn in financing (but no actual competitive advantages) could destroy operators who were willing to obey existing laws but had much less financing. Pro-Uber politicians like Macron cannot be judged independent of evidence about the economics of Uber and the urban transport business.

Uber PRs still claims it has vastly improved urban car services, even though the highly subsidised service and fares that fueled its initial popularity are distant memories, and anyone who has recently tried to take an Uber knows it is now charging much higher fares and providing much less service in most cities than traditional taxis used to.

But since The Guardian series has completely ignored the $31bn in losses and all other financial evidence, it has no way to respond to the false PR claims Uber has used to confuse its readers.

Other Minor Problems

Despite suggesting that the files MacGann gave The Guardian included new, shocking stop-the-presses Snowden/Manning-type revelations, almost all of the bad behaviour presented was publicly known when MacGann was still employed by Uber. [13]

Everyone in Silicon Valley knew that “Uber broke laws, duped police and secretly lobbied governments” in 2017.  When Susan Fowler published her exposé of systematic sexual harassment at Uber in 2017, it was immediately accepted that Uber could be guilty of behaviour this bad. And while it was useful for The Guardian to remind its readers about some of the nasty behaviour that fueled its growth, it failed to supplement what was in MacGann’s files with readily available evidence about the full scope of the bad behaviour that resulted from Uber’s “meteoric-growth-at-any-cost” strategy.

The 2017 Transportation Law Journal article on Uber referenced earlier cites 88 different news reports directly critical of Uber’s behaviour in the time period covered by “The Uber Files”. These included numerous issues The Guardian did not mention including:

  • Arbitrary cuts to driver compensation.
  • Willfully false claims about driver earnings (that subsequently led to a $20mn FTC fine).
  • Scheduling algorithms that sharply limited the flexibility it had promised drivers.
  • Reneging on promises to share operating data with city governments concerned about congestion.
  • Attempts to sabotage Lyft financing efforts.
  • Spamming competitors with false orders.
  • Harassment of critical journalists and legal foes.
  • Lawsuits claiming Uber had stolen Waymo intellectual property.
  • The systematic sexual harassment of female Uber staff.
  • The theft of police reports about a customer who had been raped in an Uber vehicle.

What’s more, while The Guardian series appropriately notes David Plouffe’s role in developing Uber’s huge lobbying programme, it has understated his importance. Contemporaneous news reports had not only noted how useful Plouffe’s Democratic Party contacts were to Uber in the Democratic cities that were Uber’s biggest markets, but also explained how Plouffe’s work at Uber was a major departure from traditional tech industry lobbying practices.

Instead of just reacting to legal/regulatory challenges, Plouffe structured Uber’s lobbying as a proactive political campaign. Tech companies had avoided avoiding major lobbying expenditures until they had achieved a sustainable market position, but Plouffe made lobbying one of Uber’s top priorities while still extremely immature. Uber employed more lobbyists in Nevada than the entire casino industry and more lobbyists in California than Walmart, Bank of America or Wells Fargo.[14]

The “Uber Files” noted the importance of the contacts Plouffe had developed as Barack Obama’s Chief of Staff. Although, oddly (especially for a UK newspaper), The Guardian did not mention similarly close ties between MacGann’s direct superior, Rachael Whetstone, and Conservative Party leadership, as news reports at the time had. The Guardian mentions that Whetstone had previously lobbied for Google in Brussels but failed to note that she was the granddaughter of one of the key drivers of the UK libertarian movement who had funded the think tanks that had laid the groundwork for Margaret Thatcher’s election, personally managed a major “rebranding” of the Conservative party, and was the godmother of one of Prime Minister David Cameron’s children. [15]

The “lies” about benefits for drivers and job creation that MacGann acknowledges merely scratch the surface of what The Guardian could have told its readers about Uber’s false PR narrative claims.

Subsidising Your Way to Self-Driving Fleet Fantasies

Uber’s growth was not based on customers freely choosing its superior service in competitive markets as it claimed. It was driven by billions in subsidies that totally distorted customer choices and were explicitly designed to eliminate competition.

Uber’s competitive success, meanwhile, was not based on the powerful cutting-edge technology it said would allow it to overwhelm incumbents in any market anywhere – it was based on those same predatory subsidies. This is why its efforts to enter markets like China and Russia were such disasters.

Other questionable Uber narrative claims included the following:

  • That it should be free to ignore existing car services because laws applying to car services ordered by telephone could not possibly apply to car services ordered by smartphones.
  • That it should be free to ignore existing labour laws governing car service drivers because it wasn’t actually a transportation company but was merely a software company.
  • That it deserved a unicorn valuation because its enormous scale and network economies would drive the costs of Ubers so low that they would massively displace car ownership and transit system usage.
  • That it would introduce driverless taxis by 2018 and become a more powerful provider of autonomous vehicles than Tesla, Waymo, Mercedes, or Toyota.
  • That these driverless taxis would massively improve its profitability even though the much higher cost and capital burden of these unproven vehicles dwarfed Uber driver compensation.
  • That huge synergies between taxi services, food delivery, and scooter rentals would allow them to become the “Amazon of Transportation”.
  • That “flying taxis” would become a major contributor to future profits.

All that said, it’s not fair to be too harsh. The Guardian has attempted a “big-picture” review of Uber that is still incredibly meaningful. They have correctly focused on bad behaviour and Uber’s major investments in lobbying and PR. What they have reported is entirely accurate. It is the broader media’s continuing reluctance to shine a light on the fundamental bad economics of the business that continues to exasperate us.

There is ample published evidence to support Uber’s economic failure. The Guardian’s failure to place the analysis in the context of Uber’s competitive economics and financial performance – despite ample published evidence – has significantly limited the value of the exercise.


[1] Harry Davies, Simon Goodley, Felicity Lawrence, Paul Lewis and Lisa O’Carroll, Uber broke laws, duped police and secretly lobbied governments, leak reveals, The Guardian 10 July 2022.

[2] Uber : une enquête dévoile les méthodes brutales, voire illégales, de la plateforme, Le Point 10 July 2022,

[3] What are the Uber files? A guide to cab-hailing firm’s ruthless expansion tactics, The Guardian, 10 July 2022 The files were also shared with other news organizations including the Washington Post the BBC and theInternational Consortium of Investigative Journalists (ICIJ).

[4] Paul Lewis, Harry Davies, Lisa O’Carroll, Simon Goodley and Felicity Lawrence, The Uber whistleblower: I’m exposing a system that sold people a lie, The Guardian 11 July 2022

[5] Stephanie Kirchgaessner, Felicity Lawrence and Johana Bhuiyan, The Uber campaign: how ex-Obama aides helped sell firm to world, The Guardian 10 Jul 2022

[6] Felicity Lawrence, Uber paid academics six-figure sums for research to feed to the media, The Guardian 12 July 2022 This understandaably focuses on European academics who have supported pro-Uber narratives, but links to a detailed story on Uber PR’s use of academics in the US.  Hubert Horan, Uber’s “Academic Research” Program: How to Use Famous Economists to Spread Corporate Narratives, ProMarket, 5 December 2019,

[7] Felicity Lawrence,  They were taking us for a ride’: how Uber used investor cash to seduce drivers, The Guardian 12 July 2022

[8] Uber’s historical financial results, and some of Uber’s highly problematic reporting practices are summarized in Hubert Horan, Can Uber Ever Deliver? Part Twenty-Nine: Despite Massive Price Increases Uber Losses Top $31 Billion, Naked Capitalism, 11 Feb 2011

[9] I had initially laid out Uber’s hopelessly uncompetitive economics in 2017 Hubert Horan, Will the Growth of Uber Increase Economic Welfare? 44 Transp. L.J., 33-105 (2017) and updated this analysis in Hubert Horan, Uber’s Path of Destruction, American Affairs, vol.3 no. 2, Summer 2019, pp.108-133

[10]  Uber’s strategy never assumed that it had Amazon/Facebook growth economics but (incorrectly) presumed sufficient network/scale economies to generate positive cash flow. The presumption that it could use artificial market power to drive profitable growth was also incorrect; Didi achieved a 95+% share of the Chinese car service market but has never generated meaningful profits. Hubert Horan, Can Uber Ever Deliver? Part Twenty-Five: Didi’s IPO Illustrates Why Uber’s Business Model Was Always Hopeless, 2 August 2021

[11] Travis Kalanick was not sacked because of the torrent of bad publicity about bad behavior. He was sacked because his Board had become impatient with his refusal to pursue the IPO the shareholders needed to convert paper gains to real money. Hubert Horan, Can Uber Ever Deliver? Part Ten: The Uber Death Watch Begins, Naked Capitalism, 15 June 2017 and See Can Uber Ever Deliver? Part Seventeen: Uber’s 2018 Results Still Show Huge Losses and Slowing Growth as IPO Approaches, 16 February 2019.

[12] The origins and lasting power of these powerful narratives are described at Hubert Horan, The Uber Bubble: Why Is a Company That Lost $20 Billion Claimed to Be Successful? ProMarket, 20 Nov 2019

[13] Mike Issac, Inside Uber’s Aggressive, Unrestrained Workplace Culture, New York Times, 22 Feb 2017

[14] Kara Swisher, Uber Hires Top Obama Adviser David Plouffe as New “Campaign Manager,” Recode, Aug. 19, 2014 David Figler, Viva Disruption! How Uber Outspent the Casinos to Buy Vegas, Pando, June 22, 2015, Chris Kirkham & Tracey Lien, Facing Regulatory Roadblocks, Uber Ramps up its Lobbying in California, L.A. Times, July 26, 2015

[15] Kara Swisher, Google Comms and Policy Head Rachel Whetstone Takes Over That Job at Uber, Recode, May 13, 2015, Paul Bradley Carr, Bright Young Flacks: “Cameron’s Cronies” Now Drive Silicon Valley’s Most Sinister Propaganda Machine, Pando, May 17, 2015

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  1. Colonel Smithers

    Thank you, Yves.

    From my dealings with the peers and even former colleagues of Izabella Kaminska in the past dozen plus years, I reckon a mixture of not knowing or any real interest in what they write about, an increasing tendency to be a generalist, not a specialist and sticking to your knitting, connections and, knowing that the legacy media is not as profitable as yesteryear, a longer term aim to get into public relations / affairs are responsible for the sad, if not dangerous, state of affairs. Izabella will know the drill in the UK.

    The ownership of the Grauniad part explains the reluctance to delve deeper.

    It takes a lot of effort and time to analyse such things. Readers based in the UK may recall the recent documentary series on the Maxwell family and note that the FT journalist, Bronwen Maddox, who exposed the house of cards was a former City analyst. There are few hacks with that sort of experience, patience and determination.

    Readers will note the name of Rachel Whetstone, now at Netflix, in the footnotes. Her husband, Steve (I wear flip flops, t shirt and shorts to work at No 10 and aren’t I cool / amazing / trendy / etc.) Hilton, and her and the FT’s Camilla Cavendish (author of the sugar tax and her bankster husband Huw van Steenis, both responsible for the “help to buy” housing bubble) were part of the City, media and PR gang that enabled Cameron to get an easy ride from the media and even the City and, ahem, “facilitated” access to Westminster and Whitehall, access us peasants don’t have and don’t even know that we don’t have. Brexit took them by surprise. One can’t think why.

    1. Ignacio

      I was thinking that the main conclusion of the article was precisely the soft coverage from the Guardian doing only the minimal work and avoiding the right questions in their reporting. IMO, Your comment points exactly on the right direction on how these legacy media work. It is all about ‘networking’ as a nice qualifier for phony capitalism and there is little more. But then we have the case of Macron. He is not a private company but a democratically appointed public servant but clearly working on behalf of the part of the economy he favours. This is a prime example of the political malaise of the democratic West and particularly the conservative parties clearly more prone to this kind of behaviour. Here the news is not Uber. It is Macron, Cameron, Plouffe and the like. This is the most enraging part of the story in my view. I don’t give a damn on The Guardian but come on, Macron merits the guillotine!

  2. IECG

    Question for forumers: if uber doesn’t make a profit, does that mean it’s a bubble like cryptocurrencies?

    1. Ignacio

      It is an app, just an app. More or less same value as the app to pay parking tickets. You can regard Uber valuation as a bubble indeed. The whole series from H. Horan on Uber is worth a whole evening having a laugh on Uber here at NC.

      1. NotTimothyGeithner

        It’s more than an app. An app would have been fine, great even. Charging a subscription to cab companies for a quality product would be a great operation. A couple of guys could have made a serious living running it. Uber seems largely designed to wreck transit options for the poor, elderly, and disabled who rely on local cab companies, maybe not for daily travel but the kind of stuff you have to go to monthly. The long term plan was to drive out cab companies and raise prices, feeding off the carcass of society.

        Even when I’m not down on limited forms of capitalism, Uber is a nakedly evil company.

        1. jrkrideau

          Uber seems largely designed to wreck transit options for the poor, elderly, and disabled who rely on local cab companies, maybe not for daily travel but the kind of stuff you have to go to monthly.

          I know of/have heard of cases where seriously ill people, think for example of dialysis patients, rely on taxis as part of their lifeline. I do not know about Uber but in my small city of 150 thousand, these people rely on taxi drivers who know their customers and how to deal with mobility problems. And in many cases this can mean daily taxis use.

          Of course, there was the local taxis driver who said, ” Do you really want to send ~30% of your fare to some <@#$%^@ in California or would you prefer the money to stay in the local economy here in Canada?

      2. Joe Well

        The problem with Uber is that it is more than an app. Mere app platforms do not rise to the level of quasi-employers of their providers.

        Ebay, Amazon and even airbnb do not come close to the level of control over the nature and manner of work performed by their providers as Uber does over its drivers. That’s why some judges have ruled that Uber drivers are employees, not contractors.

        As Hubert has demonstrated in 30 installments, with this model, there is no way to eke out even a tiny profit without raising prices, reducing the quality of service, and squeezing drivers to the point of making them indentured servants–and they have gone far down that road and are still unprofitable.

    2. Michael Fiorillo

      Uber is a kind of loss leader for Capital, sustaining losses while its actual business model does its sinister work of undermining mass transit, labor laws and the regulatory state in general. Uber investors’ losses are Capital’s overall gain in wealth and control.

      1. HotFlash

        Yes, Michael F, exactly this. Economic shock troops for hire. That explains why there are ‘investors’ who will prop up Uber as long as it is breaking the things they want broken.

  3. paul

    Steve hilton, the only person alive to be willingly photographed in a ‘Big Society’ t shirt and living proof that personality disorders are no barrier to advancement in this world of theirs.

    Colonel, what do you think of the choices presented to the crumblies of the conservative membership?
    My suspicion is that they will sway towards the dimwit rather the ‘dusky’ (though the votes may be corrected by the presiding officers).

    Britannia may well be unchained from its shiftless lumpen.

    1. Colonel Smithers

      Thank you, Paul.

      I didn’t / don’t know whether to laugh or cry, including at the fact that Labour is little better than this shower, and suspect that Truss will win.

      As the child of immigrants, my parents and I marvelled at the children of immigrants who benefitted from the post war social democracy wanting to dismantle what’s left of that settlement just to ingratiate themselves with the Tory membership and parodies of Thatcher.

      I came across Badenoch’s husband at Deutsche, former home of Javid. All I can say is God help / have mercy on Britannia.

      1. paul

        As a fellow child of immigrants (100’s of years irish each side,700 on the side I know about, more on the one I don’t), who fled for work and survival, it foxes me as well.

        Rishi’s story about clawing his way up from winchester to PPE, liz’s tale of dreadful seconday education to PPE and Kkemi’s (purely transient) descent from public school to mcdonald’s tell a terrible tale about our modern and ancient education process.

        ..and the rascals that are selected to run us.

        1. Colonel Smithers

          Thank you, Paul.

          I don’t get how the dodgy life stories are allowed to go unchallenged.

          1. paul

            Perhaps we do not have a lively and inquisitive 4th estate?

            That is just me reaching in the dark

          2. paul

            I grew up with three channels on the television.

            There has been no private sector replacement for world in action

            I was listening to michael mann promoting the other day, he said the producers of that programme (while he was juduciously avoiding the vietnames bombardment) were better and more aggressive than anything he ever saw or heard on NPR.

    2. HotFlash

      Dunno about your Tories, but our Tories selected a (very white) female to captain the ship when it was obvious that the ship was sinking. None of the old boys wanted *that* jobI refer to Kim Campbell.

      1. paul

        This seems to be ruling class MO.

        Poor old thereasa may was selected as the punchbag for the dog days of the post brexit vote.

        Her descendancy was lightly contested by the lazy pig only for his chances to be conveniently scuppered by his future minister and best bud,gove.

        Unfortunately, despite choosing his moment to the best of his disabilities,the blonde phoenix was uniquely unable to to rise from the ashes, even with his new best bud and minister for levelling up,gove.

        I think dishy rishi will be happy to hand the shitshow keys to the dimwit and her successor, Sir Blair starmer, and assume the reigns of the travelling circus later.

        He is still young,rich and handsome after all

          1. paul

            Baffles me.

            No one I know, comfortable or not, seems to know.

            Cognitive capture is almost complete.

            The only thing that seems to trickle down is decadence.

            All management is now oriented towards decay.

            We will have to love the idea that less is less.*

            *I will have credit our betters with this idea

      2. paul

        Ursula van Leyden replacing the cautious uber hausfrau Merkel as western europe’s moral scold is the latest entry.

        She comes across as a self confident liz truss.

        Sleep well, steven king,I can’t imagine writing anything as scary again.

  4. Greg

    The timing is suspicious, as mentioned in the post. Pro-russian social media are claiming UK spy action to course-correct a Macron that was failing to toe the line on Ukraine. The Guardian has certainly served as an outlet for that sort of thing previously, since they gave up “independence” over Assange.

    If it’s a drop from intelligence agencies, then it makes sense it doesn’t engage with the real problems of the Uber business model that this series has exhaustively covered.

    1. Mikel

      That’s where my thoughts are leaning to. So much left out about the nature of the gangster organization called Uber.
      And the leak came out just after these comments from Macron:
      “…French President Emmanuel Macron said it is vital that Russia is not humiliated so that when the fighting stops in Ukraine a diplomatic solution can be found, adding that he believed Paris would play a mediating role to end the conflict.

      Macron has sought to maintain a dialogue with Russian President Vladimir Putin since Moscow’s invasion of Ukraine in February. His stance has been repeatedly criticised by some eastern and Baltic partners in Europe, as they see it as undermining efforts to pressure Putin to the negotiating table….”

      Criticism was swift:

      Then the Uber files.

    2. Hickory

      Interesting. Where did you see this speculation? I wasn’t aware Macron was close to breaking from the pack on Ukraine.

  5. David

    The Uber story has rapidly fallen out of the headlines in France, in favour of stories about the cost of living and, of course, the heatwave. It wasn’t a surprise: it just confirmed what everyone already knew, that Macron was a fanatical proponent of Anglo-Saxon “start-up” precarity and insecurity, and actually thinks the US is the source of most of the world’s best economic ideas. Those who support him think he was right, those who were disgusted will just be disgusted further. Not many minds will have been changed.

    It’s almost impossible to bring down a sitting President by parliamentary means, and anyway, the last thing anyone wants now is another election. Macron may well not survive until 2027, but it won’t be Uber that topples him.

  6. Louis Fyne

    Uber is a case study in the failure of Democratic Party power politics. (not saying Republicans are better)

    If the state, local, federal Democrats can’t protect taxi drivers/the medallion system, how are the Democrats going to protect you from the next issue?

    Democratic voters are expendable to the Democratic Party if the price is right

  7. SocalJimObjects

    The question is … when is Uber going bankrupt? Or will their CEO one day take a symbolic Uber ride to DC to ask for a bailout?

    1. Jesper

      I believe the situation is that investors (representative of investors more likely) are reluctant to stop putting money into Uber. The investors (the representatives) who stops the funding will be the ones present when losses are recognised so it might be a case of keeping funding it until “I’ll be gone, you’ll be gone” has come into effect.
      Maybe it is hopium that keeps Uber alive, I believe it is more likely that so much money has been sunk into Uber that nobody wants to be the representative telling the ones they manage the money on behalf of – “The money is gone”. So my guess is that they’ll keep pouring money into Uber until they either find a ‘greater fool’ to buy the investment or they’ve managed to find another job.

    2. lyman alpha blob

      When Saudi Arabia runs out of oil. The Saudis have financed Uber with a lot of stupid money.

  8. Matthew G. Saroff

    I would note that Uber’s strategy is very similar to that of PayPal, which structured itself as “not a bank” because Internet.

    They also used their VC funding to run the business as a loss-leader to gain market share.

    In so doing they reduced costs, and were free to abuse its users, in ways that banks could only dream of, giving them a massive advantage to the incumbent banks.

    The same is true of Amazon, where sales tax avoidance and VC money subsidized their growth.

    It seems to me that much of the Silicon Valley success (Yes, I know, Amazon is not in Silly Valley) is due to regulatory arbitrage and subsidies.

  9. Joe Well

    I am curious as to Hubert’s, or the commentariat’s, opinion on the Showtime series about Uber, “Super Pumped.”

    I only saw the first episode and wasn’t impressed. It commits the original sin of not questioning the underlying business model of Uber.

    1. Hubert Horan

      I haven’t seen the Showtime movie, but as we reported here in 2019 your criticism is spot-on.

      Issac’s NY Times coverage and book, like the Guardian series discussed here were factually accurate and provided some value (Issac broke the Greyball story and told readers about Uber’s “cultural” problems; Guardian provided a valuable summary of Uber’s pattern of bad behavior).

      But by ignoring Uber’s business model and profit performance Issac’s readers had no way to understand the importance of the “cultural” issues he was reporting. Real story was a company engaged in bad behavior at the behest of investors who couldn’t produce returns based on competitive economics, and infighting becoming lethal because Kalanick couldn’t deliver the IPO that would have made investors rich. If you ignore investors’ motivations and inability to produce profits and a sure path to a big hotel, the story no longer makes any sense.

      1. paul

        /blockquote>Since 2018, Kalanick has served on an advisory board for Neom, Saudi Arabia’s plan to build a futuristic “mega city” in the desert.


        xtra bullshit:

        March 7, 2018, Kalanick announced via his Twitter account that he would start a venture fund, 10100 (pronounced ‘ten-one-hundred’), focused on job growth in emerging markets like China and India

        Shortly after the announcement of his venture fund, Kalanick announced that his fund had invested $150 million in City Storage Systems (CSS), a company focused on the redevelopment of distressed real estate assets

        he also announced that he would serve as its CEO.
        CSS subsidiary CloudKitchens, a ghost kitchen managing company, took a controlling interest in U.K.-based startup FoodStars in June 2018.
        Kalanick personally invested $300 million in the startup, and in November 2019, the Wall Street Journal reported that Saudi Arabia’s sovereign wealth fund completed an agreement with CloudKitchens in January 2019 to invest $400 million in the company.

        In January 2022, Business Insider reported that the company had raised new funding valued at $15 billion.

        Apparently there are no plans to support erstwhile billionaress; lizzy holmes ,in prison.

  10. lincoln

    Another important goal of gig companies is to remove their workers labor protections, in ways specifically designed to make these workers pay much of their employers overhead.

    Gig companies classify most of their workers as ‘contractors’ instead of ’employees’, which is a cost-saving maneuver that is designed to transfer legal protections from labor to management. This is because a ‘contractor’ has virtually no employee protections that prevent them from being exploited, while management has breach of contract protections which are enforceable against this contractor workforce. It is a contradiction in worker classification that allows them to sidestep over a century of laws enacted to stabilize and to protect our society. Since these ‘contractors’ are usually prohibited from billing the gig companies for expenses, as other types of contractors do, this means these workers are responsible for paying much of the gig companies overhead. In this way specific business costs are transferred to gig workers, in order to lower a gig companies overall costs as well as insulate them from related cost increases.

    Thankfully companies like Uber have demonstrated, quite unmistakably, that this idea is very unprofitable.

  11. Watt4Bob

    Has anyone considered the possibility that the ‘investors’ who put up all those billions are happy to at least be putting the boot to labor?

    But always – do not forget this, Winston – always there will be the intoxication of power, constantly increasing and constantly growing subtler. Always, at every moment, there will be the thrill of victory, the sensation of trampling on an enemy who is helpless. If you want a picture of the future, imagine a boot stamping on a human face – for ever.

    They (investors) haven’t made any money, but they have destroyed an industry whose public face is the lowly driver.

    The same anonymous forces have made truck-driving increasingly miserable, then complained they didn’t have enough drivers…

    The same anonymous forces have made being an airline pilot increasingly miserable, then complained they didn’t have enough pilots…

    The same anonymous forces have made being a nurse increasingly miserable, then complained they didn’t have enough nurses…

    Making money would be nice, but we must not ignore the kick they get from kicking the little guy.

    1. Mikel

      I’ve maintained all along (in some of H.H.’s previous posts) that that was what the big boys were really investing in: deregulation and sticking it to labor.
      The real prize was setting precedents for the same behaviour on a larger scale.

  12. Tien

    Not sure if Uber hasn’t added any value. Being able to easily call cabs with your smartphone and having a review system that helps to increase customer’s trust has some value.

    1. Yves Smith Post author

      Uber has added no value. You can call cabs with a smartphone too. As Hubert has explained ad nauseam, Uber is an inherent high cost provider. The only reason it appears not to be is Silicon Valley is subsidizing your ride. When that stops, Uber’s prices will increase to well above those of cabs, both to cover cost and recoup past losses.

      And if you trust Uber, you are woefully uninformed. I would never never never trust an Uber. Most drivers do not get commercial insurance, which is a legal requirement for cabs. If you get hurt in an Uber and the driver does not have commercial insurance, you get squat. You are seriously willing to risk your safety and wallet that way?

      And I would never subject myself to uncertain pricing. I have heard NYC cab drivers tell me that they get many riders who tried Uber and quit. Three main reasons: initial rides gave cheap prices to JFK and LGA, then after that, they went systematically to 2-5x above cab prices. Second is drivers arriving late or not even filling requests to go to airports at early AM hours. Third is drivers getting so hopelessly lost in Brooklyn. Apps plots routes w/o regard to which streets are one way.

      1. Tien

        It has definitely improved the taxi situation in developing countries. You couldn’t be assured of any of the things you talked about like commercial insurance. And no you couldn’t call cabs with smartphones and have them actively tracked as commonly as now.

        1. Yves Smith Post author

          Uber is making money only in a tiny handful of cities in advanced economies. It sold its operations in China, presumably its most promising non US-EU market, because it was so cash flow negative. Don’t expect Uber to be around all that long outside major advanced economies.

  13. Savita

    Driving for Uber is most memorably summed up best in the pithy words of either Yves or a commentor on this site from some years ago .

    If you work for Uber you are ‘eating your car’.

    The other angle that comes to mind, from some years ago here on NC, which is of course not news to the famed NC commentariat.

    Ubers primary model, baked in from a grass roots level, is breaking the law.
    Nothing to do with cars or apps.
    The model is, how much they can get away with. And thus testing the waters for others to follow.

    1. Alena Shahadat

      Another sum up on a job-seeking forum I saw: “you will work for unpleasant employers and deal with unpleasant customers for a small salary.” It is close to the truth. I have worked only three months in 2019 and then I stopped because I am allergic to peanuts.

      After Uber have lost its appeal to Swiss federal court this year (second appeal) against Geneva state ruling to either sign up all employees with real contracts or stop their operation, they used two companies (screens) that then “lend” them the drivers. So in Geneva Uber has exactly zero independent contractors, because the uber eats boys have bern classified as employees two years ago. One driver told me the number of drivers has shrunken from 1400 to about 400. In comparison ther is a limit of 1300 licensed taxis in the Geneva canton

  14. Colonel Smithers

    Thank you, Yves.

    Yesterday evening, I had to catch a black cab in north London and mentioned this blog and particular post to the cabbie. He planned to share with colleagues. None of what Hubert reports is a surprise, new to them. He and others I have chatted with, but what is a surprise is how the MSM and even alternatives, this blog being an honourable exception, neither understand nor bother.

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