
The Uber Dilemma - darwhy
https://stratechery.com/2017/the-uber-dilemma/
======
sunsetMurk
Here is an educational game which describes this in a fun way.
[http://ncase.me/trust/](http://ncase.me/trust/)

I enjoyed going through these scenarios quite a bit. Now with the context of
this Uber Dilemma post, it's reinforced further.

~~~
ATsch
It's worth playing every single game Nick Case has ever made.

Incredibly though provoking and makes you feel very different about the issues
by actually involving you. I think there have been few pieces of media that
emotionally impacted more than Nick's work. This is, what I feel like
realizing the full potential of moderm media looks like.

Some links:

EDIT: I should have probably also mentioned the fact that the Author has made
a site collecting these types of sites:
[http://explorabl.es/](http://explorabl.es/)

WE BECOME WHAT WE BEHOLD – a truly shocking game about mass media:
[https://ncase.itch.io/wbwwb](https://ncase.itch.io/wbwwb)

Coming out Simulator: [https://ncase.itch.io/coming-out-
simulator-2014](https://ncase.itch.io/coming-out-simulator-2014)

The most famous one, Parable of the Polygons:
[http://ncase.me/polygons/](http://ncase.me/polygons/)

behold the beast! the magnificent 2d matrix!:
[http://ncase.me/matrix/](http://ncase.me/matrix/)

NEUROTIC NEURONS: [http://ncase.me/neurons/](http://ncase.me/neurons/)

~~~
gfodor
Wow, is there a genre or something for things like this? Seems like a pretty
novel medium for expressing non-trivial idaes.

~~~
ATsch
Yes, as mentioned these are commonly called explorables.

[https://reddit.com/r/explorables](https://reddit.com/r/explorables)
[http://explorabl.es](http://explorabl.es)
[http://explorables.cmucreatelab.org](http://explorables.cmucreatelab.org)

------
elmar
_“There was no way we were ever going to take money from Sequoia, given what
they’d done to me,” says Parker._

For those who don't know the story.

Mark Zuckerberg's Brutal Prank On Sequoia (2010)

[http://www.businessinsider.com/mark-zuckerbergs-brutal-
prank...](http://www.businessinsider.com/mark-zuckerbergs-brutal-prank-on-
sequoia-2010-5)

~~~
hkmurakami
Does anyone recall which VC firm Jim Clark had beef with after being betrayed
during his time at Silicon Graphics?

~~~
2arrs2ells
KPCB, I believe. ("The New New Thing" by Michael Lewis is a great retelling of
Jim Clark's adventures)

~~~
hkmurakami
Huh interesting (and my first hunch was KPCB as well), since he works with
KPCB in his subsequent ventures, including Netscape (I seem to recall that his
beef was with one particular partner rather than the firm as a whole, so maybe
that is why).

The valley grudges by top executives has always been amusing and entertaining
to me -- for example, Ben Horowitz's refusal to work with E&Y after they
nearly blocked their acquisition by HP.

~~~
elmar
As a side note the cap table of Netscape

Why was Netscape a weird example (to me) of Equity Sharing between Founders

[http://www.startup-book.com/tag/kleiner-perkins/](http://www.startup-
book.com/tag/kleiner-perkins/)

------
msabalau
I am not certain I understand how the reputation damage is supposed to occur
in this case.

According to the article Sequoia had a long standing willingness to play
hardball. A reputation earned through consistent long term behavior.

It's hard to see how a one time event in extreme circumstances leads to a
change in reputation. Presumably any rational founder would assume that any
rational VC firm would act the same way in similarly extreme circumstances.
One doesn't earn a reputation by being struck by lightning or spraining your
ankle falling over a turkey in a city street or any unrepeated unlikely
events.

And, if you believe you can clearly prove "fraud, break of contract, and
breach of fiduciary duty" presumably you are only discouraging bad actors with
whom you wouldn't want to get into bed with in any event.

~~~
lmm
Suing a company you funded is extreme enough that doing it even once attracts
a reputation. Would future founders considering potential investors assume
that Kalanick was so far out of line that there's no way anything similar
could happen to them? Or would they think that there's probably blame on both
sides, and there are better investors around?

~~~
zangiku
Why does funding a company have to mean that you are forever beholden to the
CEO's bad decisions? Extreme this is not, and founders should take this as a
signal that Benchmark will bring reason to the board.

~~~
Trundle
>Why does funding a company have to mean that you are forever beholden to the
CEO's bad decisions?

Huh? It doesn't?

------
ChuckMcM
That is the first time I've heard the theory that the lawsuit might be a sort
of stealth way of Benchmark getting on the record as not having anything to do
with the current Waymo issue. Does anyone know if a board member can separate
themselves that way from a suit in order to shield themselves from damages?

If I understand the risk correctly it would be that Waymo prevails, gets a
huge damage settlement which the company has to pay, but doesn't have the cash
to pay so the board of directors have to go to their resources to pay. Is this
understanding correct? Does anyone have a precedent for this? I'd be
interested in reading it if they did.

~~~
harryh
It would be highly unusual and I dare say impossible for Uber shareholders to
ever have to pay a settlement out of funds not already invested in the
company. This is the essence of limited liability.

~~~
pbhjpbhj
AIUI the "Limited" company in the UK limits a shareholder's liability to the
value of the shares they hold - so if you hold £1M of shares that's your
liability. I assume it works similarly in USA?

~~~
harryh
Yes correct. The worst financial outcome for holders of Uber stock is that
their shares become worth zero. They can't go negative.

~~~
freyir
If the Saudis were misled in their $3.5B investment? IANAL, but individuals
might be held accountable.

------
fragmede
The blog pushes two potential outcome, but fails to realize a third -
Benchmark, as one of the most successful VC firms ever, is messaging to CEOs
that certain behavior will not be tolerated, even if they _are_ going to be
the next Google and Facebook.

~~~
TheCondor
That is an awfully expensive way to send a message to someone that may not
exist

------
saosebastiao
Realistically, how long do I have before Silicon Valley stops subsidizing my
transportation?

~~~
pgwhalen
Haha I have the same question. Until self driving cars are common presumably,
but I think a lot of people are deluded about how soon that will be.

~~~
erikpukinskis
I think it will be soon because there is a huge number of markets to test in.
You have every state in the US, every country in the world, and a dozen
players all working on it. In an n*n space, you just need one
technology+municipality pair that says "ok, we'll risk it" and you have a very
public, newsworthy demonstration.

If there are real benefits to the tech, it will be impossible to keep them off
Instagram. From there, it will spread to opportunist governments... Places who
will try anything if it draws interest to their municipality.

At some point after that it becomes a liability to not allow it.

Now, how long before each of these stages? I don't know, but there's pressure
there.

~~~
kmicklas
This explains how self driving will be legalized, not how it will be
perfected, and it's not even close yet.

~~~
erikpukinskis
Each forces the other

------
dracodoc
The summary on TIT FOR TAT is not complete:

when you’re playing for the long run it is better to be nice — you’ll make up
any short-term losses with long-term gains.

It also depend on the population distribution. If everybody else is mean,
being nice in long run still lose. So the optimal strategies in different
culture are obviously different.

I think TIT FOR TAT is good because: 1\. it give a gesture for cooperation at
first 2\. but respond immediately if the response is hostile.

There were some variations of TIT FOR TAT, like being nice for several rounds,
then revenge later. Those variations didn't work well.

The random strategy(being nice or mean randomly) also doesn't work because
it's difficult for others to predict your behavior.

The experiment was designed for long term survival, so it doesn't apply to
these cases:

Being nice for all the time, then use the reputation to scoop the biggest gain
in the last step.

So the experiment is very interesting and revealed a lot of points, but the
simple takeaway of "being nice is good for long term" is just too limited.

~~~
sunsetMurk
Here is a fun 'game' to illustrate some scenarios around this.
[http://ncase.me/trust/](http://ncase.me/trust/)

Here it's framed as the game theory for the Evolution of Trust.

------
driverdan
> Does it give the firm a bad reputation, potentially keeping it out of the
> next Facebook? Unquestionably.

I question this assertion.

As others pointed out in the HN comments for the lawsuit announcement, the
only people who have to worry are those with questionable ethics. We need
fewer of those people in startups so this is a positive signal to me.

------
fragmede
This is compounded by the fact that brand names don't get tracked but this
post, ostensibly by someone in the VC business, doesn't even mention: who is
Benchmark? Starting a new firm with a new name might have zero reputation, but
it's better than a negative reputation, and who's going to do extensive
research on the founders of a new VC fund, as long as they're interested in
your new app, and you weren't personally aggrieved by them in a previous
round.

~~~
__jal
> and who's going to do extensive research on the founders of a new VC fund

...Anyone who actually cares about their firm and is smart enough to actually
attract VC interest?

~~~
mrgordon
False although I grant some will.

------
whipoodle
Uber already is one of the grand slams, so it would make sense to take action
to protect that success (I'm not saying Benchmark is definitely doing that,
but I'm sure they think so). Even if you don't agree with what Benchmark is
doing, I think it's hard to see this as anything other than a fight between
billionaires. If you're just starting out, deciding to hold a grudge against
them over this is getting way ahead of yourself.

~~~
psadri
This kind of stuff plays out at much smaller scale too. You just don't hear
about it in the national news. So some due diligence on your investors is
worthwhile if you are going to pour the next 5 years of your life into
something.

------
damnfine
So cash out or grow, but they're already shrinking and cashing out is looking
increasingly hard and with diminishing returns. This may not end well, but
presents a lot of opprotunities for those with the right eyes.

------
SCAQTony
So Lyft played nice and is having more long term success as a result?

~~~
ndirish1842
Not really.

Yes Lyft has gained some marketshare in the past 6 months. But Uber still
dominates the US rideshare market (Uber by public accounts still has greater
than 70% Market Share). Uber dominates in several other regions (Western
Europe, Latin America) and is competing in several other huge markets (India
and SouthEast Asia). Uber also has significant stakes in the dominant ride
hailing companies in China and Russia.

This is not to diminish what Lyft has done. They're successful company. But
they are in no way seeing more long term success compared to Uber as of today

~~~
dullgiulio
Any pointer to "Uber dominating in Western Europe?" Only in a two horses race
with Lyft, but as you know there are many other racers, including traditional
taxies which are well organized in Western Europe, not only a vested interest.

~~~
ndirish1842
[https://www.bloomberg.com/news/articles/2016-08-23/uber-
is-t...](https://www.bloomberg.com/news/articles/2016-08-23/uber-is-the-most-
popular-ride-hailing-app-in-108-countries)

To be fair, this doesn't (I believe) take into account if traditional taxis
are still dominant in some countries

------
_RPM
Did anyone do the math on using Uber vs buying a car? I probably spend like
100 per month on Uber

~~~
wsxcde
I wish I'd done the math on Uber when I bought my car some years ago. I ended
up paying ~$80 a month on insurance alone. Add in the initial cost of the car,
maintenance and fuel, it was not at all worth it in comparison to just
shelling out for a Lyft whenever I needed one. So by my math if you're
spending $100 a month on rides, you're well in the black in comparison to
owning a car.

The main (and perhaps only) advantage to having a car is the convenience and
the ability to go where ever whenever.

~~~
defen
You can certainly save a lot of money (depending on your location / usage
pattern) by going carshare-only; but one thing I've found is that it can
result in a sort of cognitive fallacy (not really a fallacy per se; rather a
thought pattern that can be tricky to avoid) where every trip you make becomes
subject to economic considerations, far more than it would have if you'd owned
a car.

For example if you have a friend who lives 15 miles away - it becomes "do I
want to spend $50 to visit my friend?". If you drive your own car, the
economic calculation is invisible - it's about $2 of gas, a bit of
depreciation that you don't even think about, and [huge already-paid upfront
cost for vehicle/financing/insurance that you don't even think about] - "of
course I'll pay $2 to visit my friend!"

One thing that helped was making a spreadsheet that showed how my total cost
of transportation went from $8k/year to about $1200/year when I switched to
Lyft/ZipCar and ditched my own vehicle. So even if I were to add in a weekly
$50 friend-visit, I'm still paying less than half for my transportation than I
previously was.

~~~
ghaff
Based on the standard IRS deduction, a 30 mile round trip would be about $15.
(And the marginal cost is less than that--your insurance at least doesn't
generally go up by mileage except to the degree it slightly increases the
probability of an accident.) But I agree with your basic point. If people had
a clicking meter whenever they got into their car, they'd think a lot more
before they turned the key.

Some might say this was a good thing. Personally, I think mobility is
generally positive.

~~~
toast0
My insurance has always wanted to know annual mileage to determine the
insurance tier to put me in. The tiers are pretty wide though, so I never put
any thought into visiting a friend. Just sometimes which of the family
vehicles to drive across the state.

------
fragmede
Thanks for an extra 1000 words explaining the prisoner's dilemma.

Edit: that was sarcasm

~~~
anthonybsd
The article was mostly about VC-Uber tug of war, though. That's the essential
point of the whole debacle.

------
zackmorris
I feel like these simulations refute "if you are not a liberal at 25, you have
no heart. if you are not a conservative at 35 you have no brain":

[http://quoteinvestigator.com/2014/02/24/heart-
head/](http://quoteinvestigator.com/2014/02/24/heart-head/)

The older I get, the more it seems to me that context is the basis of strongly
held political beliefs. Growing up in Idaho, I'm often dismissed out of hand
when I offer my (by regional standards) liberal opinions. I've met many people
from liberal states (even California) who offer conservative opinions, which
always struck me as ironic. How would our positions hold up when confronted
with a change of context, if we saw how their application backfired?

I'm wondering if there is a duality here, where different approaches can both
be right but one could and should be chosen based on desired outcome. People
unaccustomed to pragmatism may be performing a logical fallacy by assuming
that their way works in all cases, when it practice they would lose to
experience (and in the case of the prisoner's dilemma, cooperation).

