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As Uber Prepares to Go Public, Its Lead Lawyer Races to Clean It Up (nytimes.com)
57 points by SeanBoocock 15 days ago | hide | past | web | favorite | 76 comments



Uber has among the worst customer support policies I have seen - but alas they are a monopoly and there's no end in sight. I think they should be regulated.

Recently, I raised an issue when I got billed twice for the same ride. In India, they have no phone support, just email. Instead of checking transactions on their end, they wrote back to me asking me to submit my bank statement so that they can verify. I was quite surprised that customer support could just ask for people's bank statements.


In the US we have Lyft, so not quite a monopoly. Possibly an oligopoly though. I'm building an app that pits them against each other on price to promote a competitive transportation market. In some countries Uber does have a monopoly, or has been kicked out in favor of a different monopoly...


Good luck. You aren't the first to try this. Uber's terms of service expressly prohibit displaying their prices next to a competitor's, and they've sent their lawyers after anyone who has tried. You don't make money as a marketplace by competing in the market for marketplaces -- you do it by being the marketplace and charging the rent that the market will bear.


There are also Taxis in most places.


Google Maps already does that.


Not well. It gives price ranges like "$6-$10", and with many short rides having price differences of $1-$2 its not actually useful for comparing Uber and Lyft. Plus their fare prices are often flat out wrong (as they cannot factor in account specific factors), and they link you into the native app to actually call the ride.


Doesn't Uber pay Google for that privilege? I'm in Toronto and I've only ever seen Uber fare estimates on Google Maps.


I don't know, but I've seen it list both Uber and Lyft for me.

I had the opposite experience. Uber has customer support built into the App. I was also billed twice and just followed the instructions in App that created a ticket. Got my money back in 2 days.


Same thing in my case. I had a few mishaps - one guy didn't terminate the trip once I got off, so I got overcharged, another failed to pick me up to begin with (!), but started a trip anyway, etc. In every case the issue was financially resolved in terms of hours.


Likewise, I gifted someone a $50 Uber gift card to their cell number. They never received it.

I filed a support request online and received no response. Apparently there is no phone support here either? This is in US.


Uber's US support number is 800-593-7069. You can also tweet at their twitter account, which usually gets you a quick response. @Uber_Support ‏


Its sad that so many companies require you to kick up a stink on social media before they will acknowledge your complaint.

Movistar and Vodafone in Spain have both been like that with me.


Did you complain to your consumer protection bureau?


Chargeback.


In what market are they remotely close to being a "monopoly"??

If there's a ridesharing co that is actually a monopoly it's probably Grab in SEA.


> they are a monopoly

In India, don't you have Ola?


yes, but the Ola app (last I checked) required access to all your emails and SMS messages and didn't function if these are not granted. When one of my friends contacted customer support he was told " but all your data is safe with us, why are you worried?"

(this was some time ago, I don't know what the status is today)


I use Android Pie and the only permissions they require to work is Location and Phone.


…I don't know what to say. How has nobody called them out for this yet?


This is definitely not true in iOS for the last 2 years at least.


At the very beginning of Uber it was the inverse, their customer service was top notch. I would reply to a receipt saying the driver took a longer route for instance and they would reimburse me. Now their customer service is basically inexistent.


I've found the same to be true for Uber Eats. If my order is wrong, they give a full refund no questions asked (and a meal is typically $20-25). And orders get messed up a lot (maybe 1 out of 5). Even something as small as missing ketchup, I'll get half off.


Thre's Ola and they have a fairly decent network. Though in Customer Service they are about the same. In major cities you also have competitors like auto rickshaws, buses and the like. They are nowhere near a monopoly.


The brand is already tarnished. I know many people that use lyft over Uber for this reason alone.


This might be the silicon valley bubble here though.


It might be (as long as we expand that definition to cover tech workers or tech industry aware people in other areas as well). I live an hour North of SF, and even there, if I mention I don't like to use Uber out of principle because of their past behavior and misdeeds, the question I invariably get is "Oh, like what? I haven't heard anything."

Whatever Uber did to paper over what news of their misdeeds reached general cultural consciousness (if any...) seems to have worked for the most part. That's a shame, since I truly believe there should be much harsher repercussions for their blatant disregard of the law over an extended period and the pain and problems it caused to many.

I suspect if the market was working efficiently, Uber would have a lot more problems and be in a much worse position than they are (efficient markets assume good information, and if people don't know what Uber's done, they can't make an informed decision).


> This might be the silicon valley bubble here though.

I'm well outside of SV, use Lyft occasionally, and never use Uber out of principle.


Totally. I use Lyft wherever I can but I can virtually always use Uber whereas Lyft is spotty.


Where do you go that doesn't have Lyft, but has Uber?

I travel regularly and it is very rare not to have Lyft available. Virtually any city with >250k has both from my experience, although that could just be where I travel, I don't know.


I've yet to find Lyft in Europe but there's a lot of cities there with Uber available.


Where do you go that doesn't have Lyft, but has Uber?

Lyft is US/Canada only, while Uber is much more global.


> Where do you go that doesn't have Lyft, but has Uber?

Everywhere other than the US and Canada?


Kansas City, MO has both, but wait times have been much higher for Lyft when compared to Uber. At least that’s been my experience. I only try to use Lyft.


Late response, but yeah, mostly Europe. Asia for a while, but now Uber is mostly gone there too.

I live quite a few states away, and in fact Uber has a terrible reputation here too.


Your sample size is a little limited to conclude that the brand is tarnished, especially when we look at the size of IPO between Lyft and Uber. Although your perspective might mean a potential trend that the business should be taking into account.


I have this pet theory that every company that becomes publicly traded on financial markets becomes "evil" because the focus is taken away from customers, and towards keeping shareholders happy. Let's hope I'm not proved wrong, again.


They've already done some pretty shady stuff. This is a case where going public might actually work the other direction.


Going public, they can get better at respecting local laws and regulations, and still sacrifice their customers (and of course employees) at the altar of their shareholders. (At least that is what I read the Op is saying).


Uber already has a pretty strong track record of doing poorly by its emplo-- er, sorry, "independent contractors."


I keep hearing this argument, but well guess what? Nobody is forcing anybody to become an Uber driver. If Uber treats their contractors so poorly, they are always free to go around and explore other options. We live in a capitalistic society, after all.


One argument is that it may not be actually legal to treat them as contractors. See https://www.irs.gov/newsroom/understanding-employee-vs-contr...


The point I am making is that no driver would ever want to work for Uber if Uber really was that bad. Turns out, drivers evaluated the pros and cons, and decided that regardless of their current treatment it is still better to be an Uber driver rather than going to work for somebody else.

I will leave the matter of discussing the legality of how they treat their contractors to our courts. But it's a fact that thousands of drivers still think it's worth driving for Uber regardless of any legal controversy that may (or may not) exist.


How is that “evil”? Isn’t that the crystallization of the teleological purpose of a company?

The ideal company works to maximize shareholder value. And not just short-term value, but the amortized value of the company in perpuitity. This in turn maximizes employee value and customer value.

Let’s take a company that has great products and gives away everything for free. In the short-term, this might look like maximizing customer value, but soon, the conpany will go out of business. You could construct a similar example in which employee wages were maximized.

The ideal situation is that the company pays employees as little as possible and charges customers as much as possible. In this way, the company is on the efficient frontier. Companies then compete on employee wages and product cost. This creates a Nash equilibrium in which no party can benefit from doing anything differently.

This is the highest and most noble calling of the markets and creates the abundent and efficient markets of today (unless of course, the government steps in to fuck everything up).

PS: I know I am going to get downvoted, but I would appreciate a comment instead of a downvote.


There are many places where we know that a free market doesn’t properly function. Specifically, there are certain types of goods that end up priced wrong: those with externalities (positive or negative). So if all a company cares about is maximizing shareholder value over time they are drawn away from products with positive externalities (like a public park) towards those with negative externalities (like cars that pollute)

Note: I use these two examples because they are classic cases of positive and negative externalities but they are so well known that the government has already stepped to make public parks and tax or regulate of the externalities related to the pollution from cars.


> There are many places where we know that a free market doesn’t properly function. Specifically, there are certain types of goods that end up priced wrong: those with externalities (positive or negative). So if all a company cares about is maximizing shareholder value over time they are drawn away from products with positive externalities (like a public park) towards those with negative externalities (like cars that pollute)

Sure, but that simply suggests that those externalities should be priced. Problem solved.


The devil is in the details. Often it is very hard to price the negative or positive externalities. And sometimes companies are far and away in the best position to make an estimate of this.

For example, if you believe that Facebook played a large role in electing trump and that trump is bad how would you even begin to price such a thing. If those things were both true how could we ever find out.

Purely shareholder value is an overly narrow way of looking at the world or making decisions.


> Problem solved.

That would imply that there is no climate change happening, as we would have priced in that externality and resolved the issue by now. Right?

As it turns out, that isn't right, because nobody who has incentive to price the externality right is allowed to be part of the process, and the ones who are part of the process are incentivized to cheat and not price externalities at all, or to price them poorly.

So we have runaway climate change. And we have structures preventing that from improving because the incentive structures are flipped to the opposite right now. There is no indication that will change, in fact the incentives to pollute and remove the externality of pollution from the cost of goods sold and services provided, so that we are actually accelerating this path towards higher pollution (see Trump's coal-and-oil-championing attitude).


> That would imply that there is no climate change happening, as we would have priced in that externality and resolved the issue by now. Right?

Erm, what? I didn't say that the system would price it...if it would...we wouldn't need to price it. I said that we needed to price it. You seem to be arguing against some sort of made up straw man here.


> How is that “evil”? Isn’t that the crystallization of the teleological purpose of a company?

> The ideal company works to maximize shareholder value. And not just short-term value, but the amortized value of the company in perpuitity....

> The ideal situation is that the company pays employees as little as possible and charges customers as much as possible....

It might be for some people, but I wouldn't say that view is universal. In my view the teleological purpose of a company is to strive to act morally and ethically while providing value to society. I think trying to replace that with a mechanism driven by a map-model is pretty dystopian.


The concept of a corporation existing solely to maximize profit is a new development coming out of the Chicago school of economics. For most of our legal history, any company that received limited liability was required to consider a broader set of constituents; including shareholders, debt holders, employees and society. Often they were given an explicit charter from the king or the sovereign and were engaged in highly risky behavior that was believed to be extremely socially valuable but which most investors and managers wouldn’t pursue unless they weren’t personally liable.

This is as opposed to a general partnerships, which most businesses were until the 1980s, where the owners were personally responsible for all debts and harm the firm caused. Delaware didn’t even have LLCs until 1991 and corporations were much harder to form.

We don’t have to live in a society where a fundamental structure organizing human activity ignores the well being of many of the core constituencies it interacts with; we write the rules. We could decide that corporations and their officers have to balance their effort maximize value for shareholders, employees, debt holders, their local community and the country. The social contract can be negotiated.

I say this as a start up founder, entrepreneur, and capitalist.

Finally, your argument assumes competition exists to reap the benefits of competition; but monopolies and dualoplies such as Uber/Lyft exist specifically to achieve network effects and the pricing power they allow. That is clearly great for shareholders but inefficient for everyone else. Being a capitalist doesn’t mean being pro business in all its forms. Monopolies are destructive to innovation, wealth distribution, efficiency, and over the long term capital appreciation.

Anyway; No down vote from me.


"We don’t have to live in a society where a fundamental structure organizing human activity ignores the well being of many of the core constituencies it interacts with; we write the rules. We could decide that corporations and their officers have to balance their effort maximize value for shareholders, employees, debt holders, their local community and the country. The social contract can be negotiated. "

That's the thing. Economic rules are not natural laws but they are human created and have always been adjusted and will always be adjusted.


> And not just short-term value, but the amortized value of the company in perpuitity.

But this is what they characteristically fail at, or are given strong incentives not to do.

For example, one of the best things a stable, mature company can do is to just keep operating its business, making profits and returning the profits to the shareholders. Then the shareholders can use the money for whatever is most efficient, e.g. investing it in other companies with better growth potential. But the tax laws in the US punish that severely as compared with wasteful empire building or subsidiary shell games that warehouse cash in foreign subsidiaries in lower tax jurisdictions. Returning profits to shareholders gets taxed twice. Hoarding or wastefully/inefficiently spending the money doesn't get taxed at all. So they do the dumb stuff, and Apple holds onto a pile of cash the size of a mountain even though they're not actually doing anything productive with it.

You also have all kinds of problems with time frames. There are many things you can do to a company that will increase quarterly profits, like raising prices on customers that require a long lead time to switch to a competitor. Things like that may increase profits for years as the locked-in customers pay the price for as long as it takes them to transition to another vendor. But then the business starts to implode as the customers gradually all leave, and the same long lead time that kept them from quickly switching away (plus the damage you've done to your reputation) keeps them from quickly switching back. You can see this in, for example, Oracle's share of the database market slowly descending down a cliff.

And in general there are just information problems. Shareholders make decisions based on public information, but there is so much more involved in a company's operations than is described in those statements that it's easy for bad managers to waste or steal resources or otherwise make short-sighted decisions without ever getting held to account, and many incentives for them to do so, particularly when their current bonuses are tied to current-term numbers and not long-term numbers.


> But the tax laws in the US punish that

In other words, as mruts said, the government steps in to mess everything up.

> You also have all kinds of problems with time frames.

> And in general there are just information problems.

Yes, but those problems can't be fixed by making the market less free. They can only be fixed by shareholders having a long time horizon and being willing to be involved in corporate governance. The biggest issue with that nowadays is that most "shareholders" are not individuals but mutual funds, which shortens the effective time horizon for everybody (even though funds are holding the retirement accounts of people who will be working for the next 30 years, they still compete on short-term returns) and means no effective shareholder governance (mutual funds don't care how individual companies compensate their management, they'll just trade to another stock if one company has problems).


Isn't the rise of index funds an example of rational choices in a free market leading to suboptimal outcomes?

You contend that the success of corporations maximizing shareholder value relies on active shareholder governance. Yet the rational choice for an individual in an efficient market is to simply diversify their portfolio and minimize fees through passive investments. How would a freer market fix the time frames issue that both of you agree is a problem and you suggest active long-term shareholder pressure is necessary to solve?


> Isn't the rise of index funds an example of rational choices in a free market leading to suboptimal outcomes?

To the extent that it creates problems with time horizon and corporate governance, yes.

However, that does not mean that making the market less free will improve outcomes.

> How would a freer market fix the time frames issue

Who said anything about a "freer market"? You just said (and I agreed) that the rise of index funds is an example of rational choices in a free market. So there is no "freer" market that can fix it.

What I said was that government interference does not fix anything; it makes things worse. (US tax laws being an example.)


> In other words, as mruts said, the government steps in to mess everything up.

Certainly. But it still actually happens under existing law to existing public companies, and happens less to companies that aren't public corporations (C corps.) and correspondingly don't have the same tax treatment. And having companies owned by smaller numbers of people also addresses the issue of ownership being so diluted that nobody has sufficient incentive to pay attention to corporate governance.

> Yes, but those problems can't be fixed by making the market less free.

The "[some regulation] vs. lack thereof" debate is uninteresting in the abstract. Most regulations make things worse as a general rule, but if we don't evaluate them each individually then we wouldn't even have laws against theft or murder etc.


I agree that having companies owned by smaller numbers of people (and having more of them be privately owned) would help, yes. However, that's also subject to the free market. Right now the free market appears to be producing lots of IPOs driven by the needs of venture capital. I hope that's a temporary phenomenon that will correct eventually.


One criticism, from a philosophical angle, would be that you have foundered on the is-ought problem.


"Ought" came up in two places:

> maximizes employee value and customer value

and

> the abundent and efficient markets of today

I suspect the GP believes it a little more strongly than I do, but I think their point is that we should consider outcomes (i.e. "plenty") rather than stated intentions ("maximum profit"), though their examples mostly illustrated the point in the other direction.

Criticising Uber for trying to maximise their profits could be construed as criticising them for delivering customer value. Bit of a stretch, though :-).


There is no constraint that companies must maximize shareholder value. Companies can be set up for any number of reasons (including non-profit reasons).


The government (or sufficiently powerful corporations, which effectively take on some aspects of public governance) sets up the framework that the market operates in. Corporations operate in a society which may break down if sufficient pressure is applied to people (e.g. employees, customers).

Down vote baiting is discouraged by the site guidelines.


On the contrary IMO. You have to be so transparent about so many things when you go public - it eliminates a lot of room for shadiness.


My counter-theory is that that's exactly why they go public.


Precisely because Uber's trajectory is unswervingly evil, they will eventually arrive at good upon traversing the universe's hypertorus.


Is keeping shareholders happy so much worse than keeping venture capitalists happy?


Hey I just got a crazy Idea.

Give me 18 billion dollars, and I'll pay people to drive other people around.

"How will we make money?" What? This is Silicon Valley, nobody makes money, we just burn capital ($18B) from people who invested in one good thing 20 years ago until we can sell the remaining capital ($7B) to braindead retail investors for 10x it's value.

The company only has a year and a half of runway left, so we have to move quick.


Try it. I don't think you will be successful. I think you underestimate the amount of money it took Uber to get the network effect in each city to have enough drivers. At this point it's easy to keep it up.


> At this point it's easy to keep it up.

Define "easy"; they lost $1.8 billion last year. My investors made more money and my company doesn't exist.


I'm seriously considering dumping Uber after they charged me for a ride pass while my app was neither open nor was there even a ride pass available for purchase in my area at the time. Most of my friends are moving back to lyft at this point to be honest.


I mean, what else would they do? They want to maximize their returns so the most important part of the mission will be to clean up public and financial image.

I've been through this with other companies preparing for IPO.


They still hire bad drivers.


I do wonder in the new age of increasingly automated employer-contractor relations, if “hire” is the right word.


I think from a tax and accounting perspective, “hire” is probably the appropriate term.


Whatever the proper word is, Lyft and Uber (and the others) are affirmative action for bad drivers.



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