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Businesses Government The Courts Transportation

Two More Executives Are Leaving Uber, Drivers May Unionize (nytimes.com) 200

First the resignations. "The beliefs and approach to leadership that have guided my career are inconsistent with what I saw and experienced at Uber," the company's former president told Recode on Sunday, announcing his resignation. "The departures add to the executive exodus from Uber this year," writes The New York Times. An anonymous reader quotes their report. Brian McClendon, vice president of maps and business platform at Uber, also plans to leave at the end of the month... Raffi Krikorian, a well-regarded director in Uber's self-driving division, left the company last week, while Gary Marcus, who joined Uber in December after Uber acquired his company, left this month. Uber also asked for the resignation of Amit Singhal, a top engineer who failed to disclose a sexual harassment claim against him at his previous employer, Google, before joining Uber. And Ed Baker, another senior executive, left this month as well.
Jones left Uber after less than six months, though McClendon's departure is said to be more amicable. "Mr. McClendon, in a statement, said he was returning to his hometown, Lawrence, Kansas, after 30 years away. 'This fall's election and the current fiscal crisis in Kansas is driving me to more fully participate in our democracy -- and I want to do that in the place I call home."

In other news, the Teamsters labor union plans to start organizing Uber's drivers into a union, after a Washington judge rejected Uber's attempt to overturn a right-to-unionize ordinance passed by the city of Seattle.

Two More Executives Are Leaving Uber, Drivers May Unionize

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  • by geekpowa ( 916089 ) on Monday March 20, 2017 @01:08AM (#54071529)
    I for one am glad to see the wheels starting fall off this libertarian corporate experiment. It's heartening to see signs of failure in an institution whose core principals are deeply entrenched in base human behaviours such as bullying, hypocrisy and total indifference to adverse impacts to others (including it's own people).
    • by Anonymous Coward on Monday March 20, 2017 @01:24AM (#54071573)

      I for one am glad to see the wheels starting fall off this libertarian corporate experiment. It's heartening to see signs of failure in an institution whose core principals are deeply entrenched in base human behaviours such as bullying, hypocrisy and total indifference to adverse impacts to others (including it's own people).

      And/or you just hoped for someone to pull a Tyler Durden and "destroy something beautiful".

      Some people just cannot recognize or accept progress...

      I worked as I traveling consultant for 10 years, 80 to 100 flight segments per year, in major cities across the US, with the accompanying cab/uber rides to go with them, and I can unequivocally say that taxi/limo service before Uber was terrible. It was caused by cities artificially limiting supply/bullshit regulation/catering to special interests, all of which Uber/Lyft/etc need to continue to kill, for the good of all.

      • by Zaelath ( 2588189 ) on Monday March 20, 2017 @01:30AM (#54071587)

        Would you still make that argument if you had to pay the real cost of the Ubers you took? Probably around 3x what they charged you for every ride.

        • Probably around 3x what they charged you for every ride.

          Last year Uber had revenue of $5.5B and spent $8.5B, for a $3B loss. So there is no way they are subsidizing rides by 200% as you claim. Much of the losses were a result of their rivalry with Didi Chuxing, which is now resolved, and their harebrained project to develop their own SDCs, rather than just licensing the tech from Google or Tesla. They are likely subsidizing rides (to gain market share) by no more than 20-30% over market rates.

          • by silentcoder ( 1241496 ) on Monday March 20, 2017 @04:41AM (#54071937)

            You're ignoring the massive subsidation being done by the hoodwinked drivers. In South Africa the average Uber driver makes about R1400 per week. It is physically impossible in South Africa for the amount of driving you have to do to make that - to fuel and maintain a vehicle for less than R2000 per week. That's assuming the car was bought for cash.

            Their workers are actually operating at a loss. And the company is getting away with it because badly educated (often barely literate) drivers don't realize the maintenance costs - especially since those tend to come in the form of lump sum expenses months down the line.

            I don't have numbers for other countries but the odds of it being different elsewhere are somewhere between zero and fuckall.

      • by dgatwood ( 11270 ) on Monday March 20, 2017 @01:43AM (#54071615) Homepage Journal

        I worked as I traveling consultant for 10 years, 80 to 100 flight segments per year, in major cities across the US, with the accompanying cab/uber rides to go with them, and I can unequivocally say that taxi/limo service before Uber was terrible. It was caused by cities artificially limiting supply/bullshit regulation/catering to special interests, all of which Uber/Lyft/etc need to continue to kill, for the good of all.

        Taxi services are terrible because it is hopelessly expensive to drive a vehicle point-to-point and the amount of money that the government allows them to charge is not enough to actually pay for repairs and improvements to the vehicles. Uber only "works" because:

        • They've externalized the vehicle costs by forcing the drivers to pay them without allowing the drivers to actually charge fees high enough to cover those costs.
        • There are plenty of people who haven't figured out how much money they're going to end up spending on vehicle maintenance as a result of all that extra driving.
        • They're taking advantage of huge subsidies and burning through their cash reserves to dump their services on the market even further below cost.

        The unionization threats are happening because a large enough percentage of the drivers are recognizing Uber for the complete scam that it is. By many estimates, the minimum price at which Uber will be profitable while providing the current level of service is about 4x their current prices. That makes taxis look downright cheap. Increased competition can't ever reduce the cost below a floor set by certain unavoidable costs for things like gasoline, brakes, etc. Well, I guess technically you could have a taxi service with no brakes, but I wouldn't recommend it.

        • Re: (Score:2, Informative)

          by ShakaUVM ( 157947 )

          >There are plenty of people who haven't figured out how much money they're going to end up spending on vehicle maintenance as a result of all that extra driving.

          The IRS mileage rate is supposed to be an average cost for operating a vehicle. It is 53.5 cents per mile. Uber pays about twice that per mile in San Francisco. So if you can go at 60 MPH you'll be making about 30 bucks an hour, which is not bad for unskilled labor.

          • by mrvan ( 973822 ) on Monday March 20, 2017 @05:38AM (#54072049)

            >There are plenty of people who haven't figured out how much money they're going to end up spending on vehicle maintenance as a result of all that extra driving.

            The IRS mileage rate is supposed to be an average cost for operating a vehicle. It is 53.5 cents per mile. Uber pays about twice that per mile in San Francisco. So if you can go at 60 MPH you'll be making about 30 bucks an hour, which is not bad for unskilled labor.

            (1) You're assuming all miles and hours are 'billable', while in reality you would be driving empty towards a pickup and waiting for the next pickup.
            (2) 60MPH in San Francisco is going to get you some pretty bad fines most of the time :). But even if you drive only on highways that allow those speeds, your average speed is going to be much lower, probably closer to 30MPH for realistic cases.

            So, let's assume you spend every hour waiting for 10 minutes, driving 30MPH to the pickup for 10 minutes, and driving a customer at 30MPH for 40 minutes, your average hourly gross income is 20$ (40/60*30*1$) and your expenses are $13.375 (50/60*30*.535), giving you a real income of under 7$ per hour. Good luck finding a house and food for that in SF area...

            • Even then you're being very generous with your average speed. Internet says 18mph is the average driving speed in San Francisco, so you can half that again...

        • Perhaps parent wasn't talking about cost, just talking about the general usability. Many normal cab companies are coming out with their own apps, most of them never would have done it without Uber. The old model of standing on the street waving was far out of date, but they would never have changed due to their protected market position.
          • by dgatwood ( 11270 )

            Although true, I would argue that what's really needed are standard, third-party cab hailing apps that know about all the cab companies in an area and find you a cab, rather than having to have an app for each cab company in each locality where you might need a cab. It isn't really reasonable to expect each cab company to solve the problem themselves, and it can be tricky for competitors to work together.

            • It would be interesting if Uber ended up as a platform which would work in this way. After all, why deal with the hassle of managing your own drivers when you can outsource to other companies? Sort of the Expedia of cab hailing.
      • Would you want to pay less for a flight if it meant you had a 10% greater chance of being in a plane crash? I wouldn't. Totally fine with regulations.
    • by TWX ( 665546 ) on Monday March 20, 2017 @01:33AM (#54071589)

      Having witnessed the rise and now beginning of the fall of the company it's really amazing how at so many points they've done the bad or nefarious thing.

      They basically lied about what the purpose of the app was, calling it a ride-sharing service when it's a taxi service.

      They lied about the profitability of working for them, and doubled-down by getting people into paying for cars that they had no business buying and arguably couldn't afford because their incomes did not match the advertisements.

      They lied and operated their unlicensed taxi service in places where this is illegal.

      They've made efforts to avoid investigators into their illegal passenger livery practices.

      They've attempted to call their drivers contractors while forcing them into working models that demonstrate that they're employees.

      They've essentially stolen technology developed by others in an attempt to jumpstart their self-driving car business.

      I get that in many cases existing taxi services aren't so great. On the other hand many of the laws governing taxis and sedan services are reactionary to some bad thing that happened and demonstrated a need to regulate for passenger safety. Perhaps some of what Uber and its ilk have come up with may end up as part of future regulations; the idea of determining the fare based on computer mapping is not a bad one and could be added to existing services if there was a strong enough interest.

      • They basically lied about what the purpose of the app was, calling it a ride-sharing service when it's a taxi service.

        Everyone else also lied about the purpose of the app, which allows independent drivers and passengers to find each other, in a bid to declare Uber drivers are employees--yet nobody has declared Amazon Mechanical Turk users "employees".

        We're not really equipped to understand the gig economy.

    • I for one am glad to see the wheels starting fall off this libertarian corporate experiment. It's heartening to see signs of failure in an institution whose core principals are deeply entrenched in base human behaviours such as bullying, hypocrisy and total indifference to adverse impacts to others (including it's own people).

      Own a company or be in a position of power and your opinion WILL radically change. Guarantee it

      • by geekpowa ( 916089 ) on Monday March 20, 2017 @02:54AM (#54071743)
        I do own a company. It is a small operation but I have a couple of fulltime staff and all the trimmings. In prior roles I led teams of dozens of engineers. It is possible to operate ethically and profitably. One perk is fierce client and staff loyalty.
      • by dunkelfalke ( 91624 ) on Monday March 20, 2017 @04:01AM (#54071879)

        I used to work for a smallish German company where the CEO always said that if anyone is to join a union he would close the shop and reopen in Switzerland. He also ignored many laws and regulations and the wages sucked. 5 years after I was fired half of the employees was new. Now I am working at a company of the same size, automatically belong to a professional association, earn almost twice as much even though there are no bonuses, the CEO follows all laws and regulations and even does charity work. Many of my colleagues have been at the company for 20 years. Guess where I like it better?

        • by houghi ( 78078 )

          In Belgium when there are more than 50 employees, you need to have employees be a union representative. When the company has less than 50, this is not an obligation. Some will try to keep their numbers at 49.
          That said, you can join a union, the moment you are 18, regardless if you work or not. I am almost sure that you can lie about being in a union. It is none of their business anyway

          Non of the companies I have done job interviews have ever asked it. And thise who hired me also never asked, because it neve

      • I for one am glad to see the wheels starting fall off this libertarian corporate experiment. It's heartening to see signs of failure in an institution whose core principals are deeply entrenched in base human behaviours such as bullying, hypocrisy and total indifference to adverse impacts to others (including it's own people).

        Own a company or be in a position of power and your opinion WILL radically change. Guarantee it

        So? So what? Most people don't own companies, neither can they. If you're saying that exploiting workers is OK because... others do it in the same position... well that the exact reason that unions were invented. If you're in a position of power, you don't *have* to be a dick.

    • Once Uber is gone, we can go back to having no centralized system to distribute ride hails and ride offers. Independent ride-sharers can struggle to find passengers; passengers can pay inflated prices and have longer wait times trying to find a driver, while drivers can spend more time driving around without passengers and make less money per hour despite charging passengers more for the time spent actually transporting them.

    • Libertarian corporate experiments are amazingly GOOD for society, and unfortunately, government regulation and taxation usually keeps them from popping up nearly as often as they should.

      Uber actually raised the bar for traditional taxi cabs and their cartel they had going.... Whether Uber dies now for other reasons is irrelevant. Thanks to Uber, most city cabs I've run across will now accept major credit cards, and a growing number have apps to hail rides (no more 19th. century flailing of arms and whistli

  • the CEO is an a-hole.
  • by Chas ( 5144 ) on Monday March 20, 2017 @02:25AM (#54071683) Homepage Journal

    They're getting out now, before the unionization kills Uber dead.

    A union can demand all the money it wants for its workers.

    But if the company goes broke or simply can't generate the business required to support those figure.

    Poof. Dead business.

    • Well let's see the look on these drivers faces in 2 years when they are fired from computers automated their job with self driving cars.

      This will be a big push. Hey it is the market value of what your labor is worth whether they want more money or used to make more is irrelevent. Taxis and limo drivers tried this and left the free market to create Lyft and Uber. Robots don't complain and their cost will go down as more companies implement to replace people.

      • by silentcoder ( 1241496 ) on Monday March 20, 2017 @04:56AM (#54071971)

        And that's why libertarianism is a crime against humanity and the market CANNOT be allowed to set wages unregulated - because wages are NOT just another consumable in a market. They are parts of people's LIVES. Human BEINGS.

        You know what the key thing about human beings is ? THeir the PURPOSE. Their why we have economies. The economy exists to serve the people NOT the other way around. And never EVER denigrate workers for being greedy - because you know what ELSE workers are ? Consumers.

        Good fucking luck selling ANYTHING in a market full of underpaid workers - because underpaid workers = consumers without money = no demand = no customers = bankrupt business.

        Labour, like everything else in the economy - must be sold at a profit to be sustainable - and if the market won't pay a profitable price for it - then it cannot be sustained. But UNLIKE everything else in the economy - if the labour market collapses because the demand is too low -then EVERY OTHER BUSINESS COLLAPSES WITH IT.
        Because labour is not JUST a commoddity - it's also the business that provides all the buying power to consumers, the business that pays nearly all the taxes and funds all the government services and infrastructure - including roads and the military and the police and the judges. It's the fundamental business upon which all other economic activity relies.
        Make it unprofitable - and there is no economy, because you cannot have an economy without customers.

        • by Billly Gates ( 198444 ) on Monday March 20, 2017 @05:33AM (#54072035) Journal

          Mathematically you are incorrect.

          Milton Friedman published a proof on this with price settings [youtube.com] theory. Capitalism benefits everyone. It is a 2 way street a buyer and seller.

          Economies serve those who want to make money and those who want to buy products and services. Labor it is those who want to earn money and those who need a service provided.

          If you do not like this then go to North Korea or Cuba and see how they live compared to your country. As the money moves through the market faster the higher the wages of those who want to work and those who sell things both benefit. Everybody is greedy man. Of course businesses want to maximize their value. Of course YOU want to maximize your value and work less. Consumers want cheaper products and more of them. The balance is achieved based on scarcity.

          • by serviscope_minor ( 664417 ) on Monday March 20, 2017 @06:30AM (#54072135) Journal

            Mathematically you are incorrect.

            LOL nope.

            You can prove whatever you want if you choose the axioms. If your assumptions about human behaviour are not modelled correctly then your proofs may be mathematically consistent but they won't have any bearing on the real world.

            • His noble peace prize was based off his 1976 dissertation on price settings and behavior. That video is for the average Joes what his work revolves on. Price is a direct indicator of supply and demand. Human behavior most certainly is related for demand

              • No, that's the claim. It only works for fungible commodities and with "rational" consumers, defined as ones who always operate in their best financial interest (which is ironically a rather irrational thing to do). All sorts of strange human behaviors actually influence prices.

              • What year would that Nobel Peace Prize have been awarded? I can't seem to find him anywhere on this list [wikipedia.org] nor on this list [telegraph.co.uk] (in case Wikipedia has been vandalized).
          • Capitalism is a system which can generate flaws due to outside meddling. Businesses are part of the capitalist system, but can do things to manipulate it--hence why we have things like anti-trust laws to keep illegal cartels from price-fixing everything and breaking capitalism.

            There's a point to minimum wage, and a lot of artifacts caused by it--the drift of minimum wage by inflation creates an excess of wage-depressed jobs (inflation lowers the wage), and then adjusting the wage reduces the number of av

        • Is this what happened before there was a minimum wage?
          • Actually - yes, quite often.

            Without minimum wage, in fact, what you tend to end up with is islands - areas with well to do people who are consumers and workers who live in poverty and gain no benefit whatsoever because the 'reduced prices' never quite reduce enough to allow them to become customers.

            In the last few decades we've basically seen that switch from a national phenomenon to a global one. With 'worker countries' that consume very little, and 'consumption' countries that do. But that's not sustainab

        • I don't need to sell anything if I already own everything. That's the end goal here of the 1%ers. You'll still do what they say because they decide who eats and who starves.
        • What a twisted, absolutely incorrect way to summarize libertarian ideals!

          I can't fathom why so many people think the superior way to handle things is living in a society where you've arbitrarily handed pretty much unlimited power to a group of "elites" in a central government -- who you agree to hand over a large percentage of your earnings to via taxation, and then get to "beg, plead and petition" them to spend the money in ways you agree with (which they may or may not do).

          Wages as numbers are arbitrary.

    • I doubt it has anything to do with unionization, which can be managed. But in my experience high level folks don't leave at anything above retirement rate unless there is something seriously wrong.
  • by dcollins ( 135727 ) on Monday March 20, 2017 @03:21AM (#54071793) Homepage

    "It's hard to find much of a precedent for Uber's losses. Webvan and Kozmo.com—two now-defunct phantoms of the original dot-com boom—lost just over $1 billion combined in their short lifetimes. Amazon.com Inc. is famous for losing money while increasing its market value, but its biggest loss ever totaled $1.4 billion in 2000. Uber exceeded that number in 2015 and is on pace to do it again this year [2016]."

    Bloomberg [bloomberg.com]

  • The whole purpose of the Teamsters "union" is to skim workers' paychecks to buy hookers and blow for mobsters and politicians.

    -jcr

  • Does that mean they'll be covalent?

  • Obligatory...

    One more crippling bombshell hit the already beleaguered Uber service when Netcraft confirmed that Uber is dying, now that Uber market share has dropped yet again, now down to less than a fraction of 1 percent of all ride hailing services. Coming on the heels of a recent Netcraft survey which plainly states that Uber has lost more market share, this news serves to reinforce what we've known all along. Uber is collapsing in complete disarray, as fittingly exemplified by failing dead last in the

  • I'm a big proponent of unions simply because I can see what happens when business owners are allowed to do whatever they want to their employees. The number of ethical employers that treat their employees well is a tiny fraction of the workforce, and I wouldn't count Uber in this class.

    People forget that taxi driver is one of those job of last resort for people who don't have the skills to be in the higher levels of the workforce. I live near NYC and some of the recent immigrant cab drivers I've met have crazy stories of coming here, some as refugees, working 14 hour days, 6 days a week while they're learning English and going to school. No one in IT believes me, but this is just a preview of what's coming for a huge swath of white collar workers who will be wiped out in the next automation wave. Those nice safe jobs new grads get shuffling paperwork at some big company are getting squeezed now, but could just disappear entirely very soon since companies seem to be in a massive optimization drive. The white collar workers of today are going to end up as the Uber drivers of tomorrow as no one wants to hire them for their skills anymore. I say we should try to make our Mad Max style future of fighting for scraps as comfortable as possible now while we still can.

    The other thing I could see happening is a drivers' association forming a not for profit that makes their own Uber-style app and charges drivers a reasonable percentage of the fares. It's amazing how much better off everyone is when you take the profit motive out of the equation. Note that I'm not saying "non-profit," because people do need to be paid and it's not a charity -- but a not-for-profit removes the pressure to turn the screws on the employees to the maximum revenue-generating setting. It would be a kind of non-scummy, non-evil Uber and they could even use a similar business model.

    • by King_TJ ( 85913 )

      I.T. people probably don't believe you because your scenario isn't that plausible.

      There's going to be a big shake-up in the labor market thanks to advances in automation -- but that automation is going to be marketed, serviced and programmed/developed by people with I.T. skills.

      A whole lot of automation is going to heavily rely on network connectivity, too. That means your Internet providers and people maintaining the wired or wireless networks are still going to be in high demand.

      People need to be flexible

  • I was under the impression that Uber drivers drove 'when they wanted too' and they were independent contractors?
    Has that changed since the beginning of the company?

    So what is the point of a union?
    What good does striking do to the business model of a company that assumes that on any given day everybody or nobody may decide to work?

  • and run. I'm surprised they waited this long.
  • The concept of Uber is to extract corporate profit off the backs of drivers. No long term business model succeeds by exploiting those who provide the actual goods and services that is the foundation of the company. Their exit plan was automated vehicles and remove the driver from the equation- If it is proven in court that Uber stole the code from Google for self driving cars: https://www.nytimes.com/2017/0... [nytimes.com]
    Uber no longer has a business model at all.

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