
Uber CEO Wants to Shift More Engineering Jobs to India, Sparking Internal Debate - tim_sw
https://www.theinformation.com/articles/uber-ceo-wants-to-shift-more-engineering-jobs-to-india-sparking-internal-debate
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Ozzie_osman
This is kind of about whether Uber views itself as a FAANG type software
company (software as core competency, strong recruiting brand for tech-hub
engineers) or a more operational business (software as a cost center).

Most companies end up having to choose one. If you're the latter, you
absolutely don't try competing with FAANG for the same talent.

(I do think Amazon is a rare example of a company that both developed software
as a core competency but also real world operations)

That said, I'm always happy to see companies diversifying their geographic
footprint. Smart, conscientious people exist everywhere, not just in Western
tech-hubs. And I hope in the future the choice isn't viewed as "to be one of
the best software companies in the world you have to be in Silicon Valley, but
if you want low costs, go to India, etc"

~~~
tarsinge
The real question for me is why would Uber investors put the kind of
management that view software as a cost center? In this context that's a
pessimistic signal for their future, at least for their current valuation, if
not the sign of a death spiral.

~~~
Jommi
Because they are competing against competitors with equal level of product but
with majority od developers in low labor cost countries. Thats a recipe for
sure loss.

~~~
kerbs
In the US the only real competition is Lyft, who is definitely not treating
software as a cost center.

~~~
Jommi
Well, im not sure about that. You should look at their hiring page right now
and see that they are heavily increasing their presence in european tech
centers.

Additionally, Uber is focusing on being a global superapp company, not just
the US (its just their cash cow).

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game_the0ry
I don't think moving tech labor form US workers to Indian workers will have
the desired effect that corporate decision makers are hoping for.

For one, good tech workers are hard to find anywhere. A candidate needs a
range of attributes to be effective at this type of work. That type of talent
is hard enough to find in the western world, it will likely be just as hard to
find in the east.

Two, Indian tech labor isn't that cheap, a conclusion I draw from my own
anecdotal experience. My first job was working for what you may call a "body
shop" that was US based with US only employees. The owner started the business
after doing sales for an off-shore, India-based "body shop," and he did it bc
cost of labor was approaching the cost of labor of US workers, and the US
workers would tend to produce higher quality (less defective) work (his words,
not mine). No idea what the details were, but he has a thriving business.

Finally, there might be a lot going on right now, but why haven't companies
outsourced sooner when there was nothing stopping them (even visas were easier
to come by before Trump)? I believe they have contemplated it, and changed
their minds for good reason.

~~~
softwaredoug
Maybe Indian tech labor isn't that cheap. But Silicon Valley tech labor is
very expensive (perhaps overpriced!). Maybe the latter is the key factor...

~~~
game_the0ry
I would argue there is no such thing as overpriced labor when its the market
that sets the price. You will never get a Mercedes for the price of a Honda.

So be skeptical when a politician or mega corp manager utters the words "labor
shortage" \- there is no such thing.

~~~
blocked_again
There is definitely a shortage of good quality Engineers in SF. That's the key
reason why the engineering salary is so high. Also the weird housing laws.

The same engineer who is making 30k in India makes 5 or 6 times the salary
when moved to the SF office. Similarly the Engineer who makes 200k+ in SF gets
4 or 5 times less when moved back to India.

Comparing Mercedes to Honda is not the right comparison. There are good and
bad engineers in both the US and India. So why pay 150k+ for a Honda in US
when you can get the same Honda in India for 30k.

~~~
gruez
>There is definitely a shortage of good quality Engineers in SF. That's the
key reason why the engineering salary is so high.

Do we say there's a caviar shortage because it's expensive? Or say there's a
CEO shortage because CEO compensation is high?

~~~
blocked_again
Good CEOs in good companies makes much more than the average CEOs in average
companies.

Every company in the USA wants a good CEO. But there are only very limited
number of CEOs in the USA that has a good track record of running a successful
company. So companies are willing to pay more and more for the top CEOs.

It's the same reason why drivers are paid very low. If there were only 100
drivers in SF who were capable of taking you from point A to point B with a
reasonable amount of certainty they would be also be paid in millions.

Everything is supply and demand.

In case of SanFrancisco, the supply of good engineers that are available to be
hired used to be limited compared to the demand.

Once you remove the restriction of being able to be physically present in SF,
the supply increases much more than the demand. Which results in the reduction
of salaries.

~~~
ryandrake
> In case of SanFrancisco, the supply of good engineers that are available to
> be hired used to be limited compared to the demand.

If this were the case, salaries would rise until the supply equaled demand.

People have been calling this "shortage of engineers" for decades. A shortage
means that demand exceeds supply at a given price (salary). If the market were
free to adjust there can't be a long-term shortage. Salaries would quickly
rise to the point where supply and demand were equal. If there is really a
persistent shortage, why hasn't this happened?

When you talk about goods, long-term shortages can happen when either the
supply is artificially constrained or there are some kind of price controls in
effect. Which one is causing this shortage? There is no labor cartel in
software. Nothing like the AMA keeping the supply of doctors limited. Anyone
can learn from online sources and become proficient, and universities graduate
truckloads of developers. So there's no artificial labor constraint. There is
also no externally-mandated maximum salary for developers. So how can there be
a long-term shortage?

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atonse
It's hard to ignore the siren song as a business person of comparing your 300k
a year engineers to a senior engineer that costs $80k in India (regardless of
the potential hidden costs of cultural and time zone differences).

This gap should probably narrow as more remote work becomes normal, and more
people move out of the Valley and can actually live decently on 150k, rather
than 300k.

~~~
Avalaxy
I think the cost of an engineer is way less than 80K in India. Here in the
Netherlands a senior SE would be $80K. I see no reason to go to India instead
of western Europe then.

~~~
hawk_
I don't think the kind of engineers that command 300k in valley are to be had
in Amsterdam for 80k. In India that's possible.

~~~
illuminati1911
Indians who are on that level are not going to be in India, but they are
already in SV or Europe.

~~~
bluGill
Many have returned back home, or got to that level locally and don't want to
leave.

The Indians I've worked with who returned say they did it because life was
easier. Sure they make less money on India, but in India servants come every
day to cook and clean (for about 60 cents a day). As one guy said "I know how
to cook, but I didn't realize I'd be cooking every meal"

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simonkafan
I recently visited Uber's engineering blog
([https://eng.uber.com/](https://eng.uber.com/)) and I can't help but it seems
they have engineers goofing around with new technology completely useless for
their core business ("Look, we now also use meta learning like all the hip
kids!")

A company that is swamped with ad revenue money may can afford this but for
the rest (especially when they are VC backed) there will come the time when
they have to ask themselves if they really need 4000 engineers to maintain the
service that brings in the money (= a few apps and a cloud based backend)

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DrBazza
I worked at "mega bank" in London. They did this.

For two years.

And moved all the jobs back again.

The time-zones didn't work and communication was poor. Ultimately it cost more
money than, say, off-shoring to an East European country (which they did
instead).

~~~
langitbiru
East European country => Poland, Ukraine or which country?

~~~
DrBazza
Hungary.

The whole outsourcing to India was a disaster. Made additionally worse by Java
developers trying to write C++ (pre-11 too), so memory leaks everywhere. Fun
times :(

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villgax
How is anyone surprised, Uber the taxi app is an international service whether
its Vietnam or India is only maintenance/top-up work since the actual core
product is up & running since the past decade.

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perseusprime11
20 cents on the dollar is what they have on their minds. But when you add in
the right layer of management, factor in productivity gaps due to time zone
differences and lack of business context, etc. You are actually paying 80
cents on a dollar. Tech executives know this but they are unable to persuade
their business counterparts.

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luspr
My feeling is that best Indian software engineers are in the US (or even
Europe) already. I have great Indian and Pakistani colleagues at my company,
but we had very mixed results with outsourcing.

~~~
ixvvqktiwl
Like others have mentioned, the current political atmosphere is one that seems
to have embraced xenophobia, thus making it harder for talent to emigrate. If
you can't move the talent to the work, you can move the work to the talent. In
that sense the internet is a great equalizer.

~~~
eldavido
This reminds me of a quote from my international econ class in college: "You
can take our tomatoes, or our workers. It's up to you to pick which you want"
\- Mexico to US

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_jal
Firm with a business plan premised on devaluing and trying to eliminate labor
continues to devalue labor, film at 11.

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bronzeage
Only problem is that the whole software / tech company facade is what held the
whole bubble going. You can't keep insane valuations when you're just a taxi
company hiring cheap engineers to develop an app.

There has been a growing bubble of using software and apps and pretending to
"disrupt" traditional real world markets that has been there for years. I
suspect a big part of that bubble was dunning-kroger effect of software
engineer's arrogance, investors extravagance, and willingness to burn cash
fueled by prior experience with actual software companies which spilled over
to optimism about being able to do the same in traditional markets.

AirBnB, Uber, Lyft, Grubhub, other food delivery apps, WeWork, Tesla. They are
all examples of what happens when you judge a traditional business from the
rose tinted glasses of software companies, almost ignoring the efficient
market hypothesis about these traditional businesses long before these
"disruptors" came along, while exaggerating the value the software part really
provides.

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paulgb
The story doesn't mention it, but I wonder if this has been accelerated by the
increasing hostility the administration has towards H-1B visas. To the extent
that companies can no longer access the labor pool of the other ~96% of the
world's population, it makes sense that they would set up production where
they have access to that labor.

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eldavido
Everybody's talking about the cost side of this and not the benefit: customer
intimacy. India is a huge market for many tech companies, and having more on-
the-ground presence means they'll innovate in ways more appropriate to the
Indian market.

~~~
Jommi
And compete with the homegrown Ola? Severly doubt it.

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ilikerashers
John Lewis (large UK retailer) just announced the same yesterday:
[https://www.johnlewispartnership.co.uk/media/press/y2020/jlp...](https://www.johnlewispartnership.co.uk/media/press/y2020/jlp-
announces-partnership-with-wipro.html)

I wonder are we going through a similar phase that happened mid-2000s when
outsourcing became very much the preferred delivery model. Then user-centered
design and agile pulled it back onshore.

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hkai
As a programmer and not a finance guy, I can't understand the cost savings.

I'm earning roughly 4k USD per month and our developers in India earn 1k USD
per month.

The output of the entire 12-people team there including managers etc is the
same as output of 1-2 people with a 4k USD salary here, but with a much lower
quality and maintainability.

And that's not counting the hours spent negotiating fixes or giving detailed
instructions.

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designium
I think it's not a dichotomy if it's good or bad, when you think from which
stakeholder perspective you are using, the answer is diametrically opposite:

"Outsourcing devs to India" \- this may be an oversimplification

\- Shareholders: Saving money, more money to Shareholders pocket hopefully

\- Management: Decreasing costs, better path to achieve xyz goals; therefore
easier to meet bonus targets

\- Dev team: Increasing uncertainty about job security, quality of product
losing control

\- PM, UI/UX, designers, related fields: Increasing uncertainty about job
security, more overhead to develop products and features; potentially slower
feature release

\- Other teams in the company: increasing more work to deal with teams in
different parts of the world (but that's already happening with Uber with
teams across the world)

\- India's devs: more high quality and better paying jobs

\- India's devs market: slight increase in competition of quality devs

\- Consumers and User: minimal disruption, they don't care

I think the Outsourcing can be done because not all dev work is weighted
equally across the board. Are you going to use a $300K dev to correct a
spelling mistake in an app or use that dev to further the AI development of
autonomous driving system? I cannot answer why this is not a good approach but
it sounds reasonable.

Now, there are a lot of other consequences of outsourcing the work if you
proceed to second order thinking. Having Uber to vouch and invest in India
will increase its prestige in software development market further; however,
for the US side, that only adds more pain to the idea that big corporations
are self interested only and undermines the US labor market.

~~~
IntelMiner
I'd be wary about the Consumers and Users "not caring". Depending on the size
of the company, there's definitely a lot of negative sentiment to seeing
"jobs" sent overseas, regardless of where the positions actually are

When things do go wrong, there's a bit of an attitude of "of course it broke,
they sent all the jobs overseas!"

~~~
naruvimama
India is also a huge market, also one with huge growth potential.

People living in advanced economies growing at 2% do not seem to realise that
the growth that they need for their survival actually come from developing
countries growing at 6-7% actually adding assets, or store of value.

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ixvvqktiwl
I used to think this was a bad thing, but these days I'm not so sure. Assuming
you can get the same (or similar) talent in India instead of the US, doesn't
it make sense to do your development in a place where your money goes farther?

The capitalist in me sees this as a win: more value for shareholders, and a
big life improvement for Indians.

Can someone explain to me why it's a bad thing? I understand it might be bad
for current and future US-based Uber employees, but aside from that, what's
the downside? The way I see it, this helps more people overall (and I don't
really care about which national flag you identify with).

~~~
bberenberg
"Assuming you can get the same (or similar) talent in India instead of the US"

I am not aware of anyone who has succeeded at this in practice. Do you know
anyone?

~~~
clavalle
I've had mixed results.

Romania has been great.

Pakistan was /terrible/...

India has been a mixed bag. Firms tend to be terrible. Individuals tend to be
good to great. The great devs tend to move here as soon as they're able.

~~~
addicted44
Yeah, that's why the idea that H1Bs need to be restricted will help with US
employment is remarkably stupid.

There are a few companies that abuse (abused?) the H1B program but that was
always a small but visible percentage, but more importantly, actions taken
under the Obama administration had drastically reduced the abuse.

The much greater percentage are employees who studied in the US, or worked
with companies in India and then had them transfer to the US. Eliminating the
H1B visa simply means that they will now do the same work from India or Canada
instead, further reducing the number of jobs in the US.

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faika_account
I am an Indian new grad currently working in Bangalore. Almost all my
classmates have a 15-20 lakh(20-25k dollars) job. And that's a lot of money
for most of us straight out of university. I don't see why companies shouldn't
move a part of their operations to India since they can save a hell lot of
money by hiring here. The sentiment that India is just good for outsourcing
trivial jobs is changing quite dramatically I would say. There are 3 factors
which can be a problem: language barrier,reduced talent pool and cultural
differences.

Regarding language, most of my peers have decent English skills given we have
spent like all of school life learning the language(more years are spent
learning English than the native language). Most of us also spent a lot of
time watching American/British shows in English given the lackluster scene of
Indian TV. Yes we can't converse like natives, but I bet Indians can speak
English better than most other nations whose second/third language is English.

As far as talent pool is considered, yes we aren't anywhere close to Silicon
Valley but I think the gap will reduce in the coming years given the
proliferation of the internet. And the explosion of cheap Internet has been a
relatively recent event, thanks to "Jio" \- a Telecom conglomerate. There is
no reason someone who understands English and is persistent enough can't learn
basic principles of software engineering from the Internet. Hell just
leetcoding is enough to get a job in America(from what I have seen on
r/cscareerquestions) Also given India has 4-5 times more students than
America, there is a larger pool to sieve from. India already has a more
rigorous mathematics education programme(thanks to the russians) and Indians
are increasingly getting good at competitive coding competitions. I feel the
quality of developers in India is only going to get better with time and
software giants can surely set up more and more offices here.

Lastly, cultural differences obviously exist and will continue to exist. But I
don't think they are much of an impediment to the work culture. Like most my
friends are religiously apathetic and believe in democratic, liberal values
unlike say the Chinese. Indians have been working in America for decades and
they have done quite well I would say. Cultural differences are reducing with
time thanks to multiculturalism and the internet.

India might very well be on the verge of a software boom, thanks to newfound
awareness in the youth thanks to cheap Internet and an overall better
education than previously. Hell china could do all of this without much help
from the west. Now they have their own Tencent, Baidu, Alibaba. India has a
lot of handholding from the west and Indian expats, surely we can develop
quality software in the coming future as well.

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thiago_fm
Well, there's definitely challenges in moving them to India. But given how
technology is commoditised and honestly there are just amazing developers
everywhere in the world, I don't see why they would stick paying $500k total
comp for an engineer in silicon valley to change font size in a mobile app.

For example, I moved from a third world country to a first one to work as a
developer and people here aren't any better, just a bit more lazy, than my
former country and worker laws are more strict(better for workers). They could
just offshore the work, but instead they want to employ people here for a
bigger cost, and I'm here because I get paid magnitudes more than on my home
country.

~~~
centimeter
The people clearing over half a million are probably (hopefully) not working
on implementing UI tweaks.

The cost of hiring low quality labor to do your “soft” dev work (UI, web front
end, etc.) is that you’ll probably end up with a badly done and frustrating-
to-use interface with tons of bugs. See like 75% of websites.

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A4ET8a8uTh0
I will add something that has recently popped up as a result of the pandemic
and apparently was not seen even during 2008 crash. Apparently, companies are
considering cutting pay. From that perspective, it is not a surprise that a
subset of tech companies will attempt to save money on employee cost. I don't
even want to get started since I know management will get bonuses for right-
sizing the business.

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askjdlkasdjsd
I want to know how many of the total 3600 engineers are just maintaining the
main uber app and how many are off in other ventures (self driving etc.)

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itsmefaz
Though Uber requires great engineering backbone, the future doesn't seem to be
bright on the engineering front.

This seems like the best decision Dara could take at the time being and if
Uber is able to recover from this mess all well and good.

A good point taken below is the shift from product-oriented to operations-
oriented company. I guess this transition is long-overdue and expected to make
sustainable profits.

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naruvimama
People seem to forget that India itself is a huge market, and doing well in
India could help innovate for the rest of the world.

This not an American bank outsourcing legacy systems for maintenance, so the
usual experience is irrelevant.

Let us remember that uber has engineering teams in countries, where they are
not allowed to run a car pooling businesses.

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softwaredoug
I feel like this happens because engineering teams get too big and unfocused.
This size creates communication overhead (ala mythical man month) and little
fiefdoms. The easiest solution is to outsource the jobs. The harder solution
would be to streamline the business and the focus.

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sqldba
Bwahaha. Yeah let’s see how that works out. Looking forward to a dead company
in 3... 2... 1...

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bamboozled
Why does it matter where they're from? If they're good, hire them before
someone else does.

What does "India" have to do with it? Where I work we have Indians, Taiwanese,
Americans, Australians, Austrians, Canadians. It's really no factor, I don't
get it?

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adrr
Uber is done. The only way they survive is if they come up with autonomous
driving and the only way to do that is dumping money into hiring the best
engineers. Waymo will have taxi service in a couple years and that will be the
nail in the coffin for Uber.

~~~
rimliu
Nobody will have self-driving taxi service in a couple of years, maybe not
even in 20.

~~~
adrr
Waymo is running driverless taxis in Arizona and has approval from California
to go full driverless(L4). They inked a deal for 20,000 cars and a leased a
factory in Detroit to install the sensor equipment. Why would they spend that
amount of capital if it wasn’t a few years away?

[https://www.theverge.com/2018/3/27/17165992/waymo-jaguar-
i-p...](https://www.theverge.com/2018/3/27/17165992/waymo-jaguar-i-pace-self-
driving-ny-auto-show-2018)

~~~
rimliu
Hype.

------
bitL
It's one of a few plays Uber still has before going bankrupt. It typically a
sign of a final phase of any SV company. All current Uber engineers should try
to move on while they still can.

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xwdv
Why would you hire an $80k Indian when you could easily hire an $80k American
from somewhere with lower costs of living than Silicon Valley.

~~~
rorykoehler
I would wager an $80k Indian will be the far better engineer.

~~~
HeroOfAges
I'd take that bet

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s3r3nity
how/why did this fall off the first page after barely an hour?

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jacksonpollock
I still like Lyft

