The same as every other Silicon Valley company’s plan. Prop up an untenable business model with VC funding and law breaking, with the only goal being expanding market share. Once they become a monopoly, it doesn’t matter anymore. They envision a world in which every car is an Uber. In the short term they use an algorithm to make themselves the most money. They give drivers as little as possible. They charge riders as much as possible, but less than the competition in order to get the most customers. In the long term they eliminate the driver and just charge riders as much as they can get away with.
Amazon does the same thing. They hardly profit on selling stuff. They just want to control all online sales. They get as many customers as they can with low prices. The third party sellers are the ones who get fucked over. Eventually Amazon has an even bigger monopoly and takes a cut of all online commerce. Then they just win.
VCs back things that can be sold to other people later. VCs don’t want a cut of revenue. They want a multiple of their investment all at once, and then they walk away.
True, but that assumes that they can convince some other sucker to buy whatever company they invested in, whether it’s a bigger company, other VCs, or the public via an IPO.
Now, I usually assume no one will want to buy a company (in whole, stock, or otherwise) unless they can make money off of it somehow. If Uber is losing money hand over fist and they somehow can’t swindle someone that in the future they will be making money, I don’t think they’d be very desirable for purchase. But that’s just me talking. I’m not a VC.
The logic of whether stock will be valuable later on can be very circuitous I’m sure. I gotta think that companies that are loosing money look mighty attractive to a buyer if they think it’s cheap as a result, and also think it’s going to turn at some future point. And that will continue on and on regardless of many factors. They’re likely thinking “who’s going to bet their dollars against Uber now? It’s come so far! It’s used so much now, just think of when they can really automate! It’s not going anywhere anytime soon!”
Whether it will or not, who knows. But the built-in inertia and customer reception have these companies on a long ballistic trajectory and it’ll keep on its trajectory until it completely self-destructs, hits a wall, or gets shot down. And it’ll take more than a constant stream of useless bad press to shoot it down. It’ll take a powerful and perfectly aimed intercept.
You say that, but there’s a lot of people who got rich in the valley by pumping in just enough money to start the wheels turning, getting twice their investment back and immediately ditching it, and then watching the company spiral into the abyss. Well, assuming they give enough of a shit to watch, since they already got what they wanted out of it.
On that note, can we update the thread title to Uber/Lyft Controversies? I feel like the subject is too narrow, especially since its main competitor has gone down the same dark side.
Separate, but valid, issue. I pointed those guys out in that while yes, they were white guys, they generally weren’t asshole techbro white guys. They were probably about as good as could be expected of white guys, especially given the era in which they did their work. In fact, if everyone, white guys, women, POC, etc. in the valley more or less followed their examples, it would be a better place.
I’d certainly prefer to have someone like Steve Wozniak in charge, despite being a white guy, than someone like Elizabeth Holmes of Theranos fame.