Uber’s Pyrrhic Victory

When driver and rider matching service Uber arrived in London, there was so much talk of “disruptive technology”, as well as rather too much grovelling before the company’s deeply unpleasant CEO Travis Kalanick, and a ridiculous amount of attention given to the suggestion that it would mean lower private hire fares forever. Meanwhile, no-one gave any thought to the economics, despite the colossal losses Uber was racking up.

The economics are still not getting the attention they should be: as Sky News told yesterday, “Uber can continue operating in London after it won an appeal over a decision to take away its licence due to safety concerns. A judge ruled that the company is ‘fit and proper’ to hold a licence despite ‘historical failings’”. And those failings were?

“Transport for London (TfL) had in November rejected Uber's application to continue trading, pointing to ‘breaches that placed passengers and their safety at risk’ … The firm was allowed to continue operating while it appealed against the decision”. Uber’s failings have been covered by Zelo Street many times (see HERE for example).

The politician who courted the taxi trade ...

What we also know is that alleged Prime Minister Alexander Boris de Pfeffel Johnson, when he was London’s very occasional Mayor, suggested that Uber and its drivers should be held to the same standards as other Private Hire drivers and then backed down very soon afterwards - most likely after being leaned on by his pals in Downing Street.

But now, assurances have been given, and the Uber genie has once more been released from its bottle, to the renewed joy of all those out there on the right who for some reason despise the Black Cab trade for reasons that they never manage to pony up consistently. That trade has taken a hammering in the meantime. But so has Uber.

As the Guardian reported in February, “Uber announced a loss of $1.1bn for the last three months of 2019, less than analysts had expected, but still bringing losses for the full year to $8.5bn. Revenues climbed 37% to $4bn”. Losing $1.1 billion on revenue of $4 billion. And that’s a good quarter. One quarter later, it was a lot worse.

The Verge told readers in May “Uber lost $2.9 billion in the first quarter of 2020, its biggest loss in three quarters. The company also reported $3.54 billion in revenue”. Any worse and losses are going to be close to equalling revenue. The reality is that the Uber model hasn’t worked, isn’t working, and is highly unlikely to work any time soon.

... and then sold them down the river

Using driverless cars was supposed to reduce costs further, but they don’t work, and are unlikely to work unless cars and other vehicles with drivers are removed from the roads. As one Tweeter put it, “By the time Uber is reduced to a food delivery company it's quite possible they will have burned 30 billion dollars. The pyramid scheme industry was ripe for disruption and Travis Kalanick really did it”. But it is no laughing matter.

As the biddable politicians stroll off into well-paid sinecures and Uber’s right-wing cheerleaders sneer as they hail the news in London yesterday, the Black Cab trade - the people who really know the capital - have been badly let down. They, like all the little people, won’t get any recompense, far less an explanation or apology.

Disruptive technology means a few get rich - while the majority get screwed over.

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