Here’s the thing you need to know about Uber: they lie.
They lie like crazy. About everything, but especially about money.
For the first decade of its existence, Uber lost tens of billions of dollars, lighting Saudi investment capital on fire while losing $0.41 on every dollar they brought in. The company had all kinds of stories — that is, lies — about how this would some day net out to a profitable business.
Their most egregious lie was that they would someday produce a fully automated robo-taxi that would let them zero out their wage bill and replace drivers with AI. Uber frittered another USD $2.5 billion on this pipe-dream, ultimately producing a “self-driving car” whose median distance between calamitous accidents was half a mile. In the end, Uber had to pay another company USD $400 million to relieve its embarrassing murderbot division.
Uber’s self-driving taxi lie was critical to another lie: that someday, robo-taxis would self-drive in such tight formation that geometry itself could be defeated, and that somehow you could fill the world’s streets with millions of single-occupancy vehicles and reduce traffic in the process. This lie carried over to the company’s IPO prospectus, where they blithely asserted a path to profitability that required every subway, bus, tram, and private car trip to be replaced with an Uber.
Uber lies about money. Boy, do they lie about money. For years now, Uber has released press releases on both a quarterly and annual basis announcing that they were finally profitable, according to some highly specific and misleading definition of “profitable.” Like that one quarter where they became “profitable” by ascribing eye-watering valuations to the illiquid shares in foreign Uber-like companies that Uber had acquired through stock-swaps when they abandoned unprofitable overseas markets.
The fact that Uber has a whole host of new, esoteric ways of claiming to be “profitable” means that it can capture the news cycle up to five times per year, as the credulous press – even the “business” press — dutifully repeats these claims.
Today, Uber’s lying again: they’re claiming that by paying drivers “120 per cent of the minimum wage” for “engage time,” the time they are actively picking up and dropping off riders, that this will amount to minimum wage. The part they’re not saying is that almost half of a driver’s shift is spent unengaged and unpaid waiting for a call — thanks to the massive glut of Uber drivers clogging Toronto’s streets — and paying 120 per cent of the drive-time wage will produce an average wage of only $2.50 per hour after expenses.
Toronto Mayor Olivia Chow says she’s been speaking to drivers and they say working conditions is the top concern. Many say they are unable to afford rent or feed their families.
Uber doesn’t even meet Ontario’s minimum wage — a measure put in place in 1920 to establish a minimum wage floor — and the company does all they can to keep it that way.
The American economist John Kenneth Galbraith coined the term “bezzle” to refer to “the magic interval when a confidence trickster knows he has the money he has appropriated but the victim does not yet understand that he has lost it.”
Uber’s original investors are betting that enough suckers will pile into the stock to make back the $31 billion they blew maintaining the illusion that Uber could be a profitable company, a good place to work, and good for cities. Every one of Uber’s lies is in service to drawing this bezzle out as long as possible, in hopes that the stock market will turn a profit for its original investors.
But another economist, Herbert Stein, promises us that “anything that can’t go on forever will eventually stop.” Uber is lying to its investors, to its drivers, and to cities around the world.
Eventually, those lies are going to stop working. Toronto is as good a city as any to finally call out Uber’s lies.
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