Uber, Lyft, and “legacy” business models 

Years ago, the Tumblr of someone named Justin Singer expressed some of the most sophisticated criticism to date of ride-sharing in general and of Uber in particular. He deconstructed the short-lived Uber talking point about UberX drivers making $90,000 per years and contextualized the service’s rise as part of the growing commodification of the taxi industry:

“The story of the for-hire vehicle industry has been one long march toward commoditization, with drivers always getting the short end of an increasingly smaller stick.”

One question to ask is why the “stick” here is getting “shorter” to begin with, despite the enormous pool of money filling up in Silicon Valley. Uber is an incredibly well-capitalized firm, having raised an astonishing $15 billion in equity and debt since 2009. That money is not trickling down to drivers, though, and Uber itself, even with all of that cash, is essentially a middle man between ride-seekers and independent contractors. Many of its drivers may be making minimum wage or, worse, running at a loss. Uber is a confidence game in which drivers collectively overlook the costs that they must shoulder to partcipate.

Anyway, that $15 billion is even more astonishing when considering the recent relative size of tech funding as a whole. From 2012 to 2015, total private funding in tech was $138 billion. Meanwhile, Apple paid out over $160 billion in dividends and buyback over that same time. Uber is both a huge chunk of all tech-related funding and, like Apple, an extremely efficient re-distributor of wealth upward (i.e., for its investors) – a model of shareholderism.

So in the midst of so much jargon about”entrepreneurs” and “innovators,” vast sums of money are going toward 1) extracting money from the existing taxi and limousine infrastructure and 2) paying shareholders (explicitly in Apple’s case, preempitvely in Uber’s).

But the banality of the ridesharing economy is perhaps best seen in the fact that it is trying to reengineer public transit to be less efficient (tons of private cars instead of buses) and more expensive (as a public goodturned into a private rent, it will inevitably become this). “Innovation” is apparently mostly about privatizing BART, or as Anil Dash has put it, “converting publicly-planned metropolitan transportation networks into privately-controlled automated dispatch systems.”

The reason I often put these buzzwords in quotes is that they now seem emptied of any clear #content. John Pat Leary’s seminal series Keywords for the Age of Austerity has examined why, for instance, “enterpreneur” has become ubiquitious to the point of meaninglessness in business jargon. Similarly, the scraping-by wages of the gig economy actually represent “flexibility” and “autonomy,” while across the board, whether Uber or Theranos, aggressive privatization and neoliberalism is instead just “technology” simply working out inevitable change that, as it happens, exacerbates inequality along predictable lines (college education vs. none, coastal cities vs. “flyover” country,” etc.).

A major beneficiary of the Silicon Valley lingo, though, is the cottage industry of satirists that have taken it to heart. Good satire requires a predictable target, because A) the pattern of behavior provides a clear target for ridicule and B) such predictability means that future events are likely to only strengthen the long-term resonance of the satire. This is why ironic internet accounts such as Carl Diggler (a fictional character who writes columns at cafe.com and has his own podcast) and @ProfJeffJarviss work so well.

Diggler, for example, set out to make fun of the “centrist” Both Sides Do It “beltway insiders” who think the fundamental goals of American politics are to cut Social Security and demonize Russia. His brand of satire has succeeded as political pundits have driven themselves crazy looking for ties between the Trump campaign and Vladimir Putin; consider this old piece he wrote about being a captive in Russia with this Josh Barro tweet about the country.

Meanwhile, @ProfJeffJarviss has spent years lampooning Silicon Valley VCs and CEOs with a variety of impressive rhetorical frameworks and tools, ranging from “Remember [name of a tech service that probably just launched yesterday],” as if to signal his ennui at even brand new services that, to him the ultimate tech snob, have already become passé; “Naive [a quoted tweet from someone making a common sense point],” to play inside baseball against even rational arguments against “innovation”; and “Very innovative of [company name] to do [trivial thing that is framed as a game-changer],” to elevate the prosaic to the plateau of “tech.”

But his real genius unfolds itself in the normal, everyday actions of his targets, most notably “journalism professor” Jeff Jarvis, who is seemingly predestined to have Twitter meltdowns about how why Hillary Clinton is “smart” to avoid press conferences or to take a quote out of context and proclaim Sarah Silverman’s DNC speech as the “best political speech ever” (instead of “the best political speech ever given by a celebrity ,” which is how it was described – quite a difference, yeah?). He makes a fool out of himself even without even needing the @ProfJeffJarviss foil, and so the parody only reads better and better over time.

In any case, ProfJeffJarviss showed how satire is serious business recently when he tweeted the following about Uber and Lyft:


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There is a lot to unpack here. In the “legacy pricing” tweet, he uses that epithet to refer to Uber’s current model of pricing rides according to an algorithm is deft since it frames something so often touted as uber cutting-edge – opaque “algorithms” – as laughably outdated in the face of just giving away something for free, which is often what Lyft and Uber do anyway when they run aggressive promos and “first ride free” deals. It’s possible that the enormous price cuts that both services provide, as a result of their massive capitalizations, is more important to their success than any “algorithm” cooked up by a programmer-genius.

The “freemium” tweet is more complex. The “rudeness” of asking for money  that he alludes to is something central to the modern economy, in which it is considered impolite to frame your search for a job as about getting the money that you so obviously need in order to survive in a capitalist society. Instead, “passion” and “dedication” have to be at least feigned, if not converted to as a sort of secular religion of individualism. Tips are nice under this ideology, but what really matters is “#creating” “#value,” the hashtags both markers of the empty jargon of so much social media terminology that prioritizes vague concepts – “engagement,” “thought leadership” – instead of the concrete notions of money etc. that are supposed to be so central to the economy!

Given how little most Uber and Lyft drivers earn, @ProfJeffJarviss isn’t wrong to say that what they are really doing is just performing an elaborate routine to awkwardly signal their inclusion in the nebulous “tech” world. They’re not earning $90k a year, but they are #engaging passengers and challenging “legacy” industries such as taxis, apparently. Still, there is something extremely old-fashioned and “legacy” about even these ridesharing startups, which subsist mostly on the laissez-faire brand of capitalism and sheer force of investment capital that were so instrumental to the business monopolies of the early 20th century. “Legacy pricing” – that’s what we get with each $5 Uber ride, underwritten by the old school investment power of Google, Goldman Sachs, et al.

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