In creative destruction, you can do an accounting sleight of hand by attributing credit for creation while ignoring blame for destruction even though the two are linked.
This is a technology + investing forum and all of us agree that in general creative destruction processes are enormously net positive, but they frequently do kick off a toxic byproduct in the form of said destruction (e.g. Uber and displaced taxi drivers), so there is moral entanglement between creation and destruction. Morally speaking, figuring out how to mitigate this toxic byproduct is part of our remit just as it was part of the remit of earlier industrialists to figure out how not to discharge so much flammable goo into the river that it lit on fire. We neglect this at our peril, because society merely pinches its nose if the toxic byproducts are small, but they are increasingly not small.
There's no resource destruction involved in displacing taxi drivers. Taxi medallions are a rent-seeking scheme, there's no real scarcity involved. Most other instances of "creative destruction" are like that, the capital simply gets repurposed at negligible social cost and only excess profits disappear.
Uber misclassifies en masse the drivers it employs and shifts vehicle depreciation costs onto these "small businesses". Our taxes pay for healthcare costs which should rightfully be borne by the drivers' employer. I would say that's a non-negligible social cost.
It's weird to describe this as "employment" when many and perhaps most drivers these days are simultaneously "employed" by both Uber and Lyft, serving rides for both. This kind of informal relationship is a lot closer to contracting than traditional employment.
Just because Uber made a billion dollars by outcompeting terrible companies doesn't mean that Uber isn't also a terrible company. A crime lord is still a crime lord even if he displaced other, smaller, crime lords in getting his place.
I apologize for derailing this conversation about whether or not Uber is better than taxi companies by bringing up irrelevant topics like whether or not Uber is better than taxi companies.
I will say before Uber was a thing, if I tried to call and schedule a taxi pickup in the city I lived in at the time, if they showed up at all they were at east a half hour late. Missed a flight because of it once. I don’t even like uber, but it is objectively a better service most of the time.
Yeah, anyone who uses taxi drivers as an example of destruction either don't know what they're talking about (because they never experienced it) or they're crying crocodile tears.
I had cab drivers nearly drive off with me hanging off the car in San Francisco, because they were far more concerned with screening my destination than, say, not killing me. If Uber destroyed that industry, it was only a net benefit to society. They created immense value, and the "destruction" was only to eliminate a layer of corrupt parasites who made money by preventing a free market (in this case, the medallion owners, but the entire industry was corrupt from top to bottom).
Not all places have corrupt taxi industries. I think they were always more expensive than Uber (but there's a reason for that, Uber's pricing is not sustainable) but in most places a taxi is just a taxi.
Don't entirely agree that a local Taxi service is necessarily costlier than Uber. In my indian city, Uber and Ola cannot compete (and have been nearly wiped out) because a local Taxi service (that now dominates the market) is very competitively priced and professionally run. They charge their drivers a fixed percentage (unlike Uber or Ola, and lower fees than them) and release their payments timely in a transparent manner. The price per km, and all extra charges (late night fees, overtime driver charges etc., permit fees in case of long distance travel, toll fees etc.) are transparently conveyed to the customer too. And there is no bullshit practice of price gauging through "surge pricing" or "convenience fees" or "platform fees" etc.
It's about efficiency not just corruption. When you call taxi dispatch a human answers and coordinates with other humans. Takes longer and they sometimes drop the ball.
So basically, you’re saying that “most places” had uncorrupt, put-upon taxi industries who simply cannot survive against Uber because Uber is anti-competitive, and it has nothing at all to do with delivering a better product?
Yeah, I don’t believe you. It sounds like you’re making a just-so rationalization for why taxis are good and Uber is bad.
In pretty much any mature taxi market Uber is as expensive (if not more expensive!) than the conventional alternative. And yet Uber survives.
Black drivers used to make pretty good money many years ago, but Uber + market externalities redesigned their systems to "fix" that (mostly through decreasing payouts and high car rental costs)
Most of the drivers providing that service split their time between Uber, Lyft and traditional corporate black car service.
Lots of posts on this topic in the UberDrivers subreddit.
You see that whenever there is value, above starvation wages, flowing to laborers, capitalists see that as a problem and reduce it. Does this seem sustainable?
Somehow only laborers get price discovered. Amazon hasn't got price discovered, not has Google, in decades. Weird. It's almost like Econ 101 isn't the whole story.
Yes, many, in fact. But more importantly, nobody is making drivers take these jobs.
The restated version of your comment is simply “I think drivers should get paid more,” which is fine, but not an argument. Everyone who has ever had a job thinks the same thing.
Uber doesn't pay the driver for their time, nor wear or insurance on their car. Uber doesn't even consider drivers employees unless legally required to. I should hope Uber's cut is a tiny fraction since all they provide is a bit of software while taking control of markets and pricing for themselves.
Counterpoint: I scheduled an Uber once to take me to the airport. They arrived earlier than the requested time and left when I met them at the time I requested because they waited too long. This was on Uber Black, their professional driver level service.
Counterpoint: It is increasingly impossible to get to a human at Uber when you need support, as most of their support channels are gated by LLMs and self-service support workflows.
Yes, Uber did something enormously creative. But it also did something destructive and we're guilty of an accounting sleight of hand if we focus on one while pretending the other doesn't exist.
We still want to encourage creative destruction to move forward, but paying taxes to clean up the destruction is the very least that the victorious parties can do because the entanglement exists in moral accounting even if it doesn't exist in financial accounting.
Why are the taxi workers more important than, say, the taxi customers? If the companies are providing garbage service, why do I have to care about protecting their workers?
Technology has always displaced workers. And then the society adjusts. Plenty of people will lose their jobs to AI, but most workers will be redeployed elsewhere.
The agricultural revolution displaced farm workers with machines. There was unrest and migration to cities, and eventually that fed the Industrial Revolution and created a working class.
Yeah and it took about 150 years until industrial revolution started to actually benefit the common people and the workers started to have their working conditions improved.
What it took was social democracy and unions and other social movements.
Saying that "it's happened before, it'll be alright" is a bit naive and short-sighted.
It took a literal civil war, which you don't read about in history books so much because it's not beneficial for the owners of those publishing houses to have more people hear about it. Lots of people died on both sides.
> which you don't read about in history books so much
Just to clarify, are we referring to the American Civil War? The reason I ask is that the idea that it is not a topic that is broadly covered in history books and discussed at depth all throughout schooling is simply false.
Last time inequality cooked up it took a lifetime to go back down. It did so very painfully through capital incineration on a monumental scale: a great depression, where the incineration was metaphorical, and two world wars, where it was very literal. In both cases it was economical and in both cases it fixed the problem but at enormous cost. We should aim to do better.
Plus all the union violence. The ones where owners used guns to break strikes so striking workers also started bringing guns and using them. I don't think we want that, do you?
I mentioned in my other comments that I did support welfare programs as safety nets.
Progress will result in better standards of living for many, and then we take care of the people left behind.
I’m in software - in all likelihood, I will be displaced at some point. But I’ll figure it out (I hope). When I started out, I was writing Perl. Then I had to learn Python.
This is taking a weird tone where it sounds like you’re asking me to change society for you, and blaming me for not doing it fast enough when I haven’t heard you mention a thing you’ve done either.
Like I said man, I voted for people who support sensible welfare programs. That’s my contribution.
Stop taking this out on me - if you’re so fired up about it, go get involved and start knocking on doors.
In a world where AI has not yet taken all the jobs, when a company provides lousy service, why do its employees deserve to keep their jobs more than the customers deserve good service?
I honestly don't know how uber drivers can even make a living with the price of gas and upkeep for the car [being as hight as it is]. How many hours a day do they work? I know there is a 12 hour limit at Uber but you could continue to Lift until the next day. Then what?
So they drivers spend their life Ubering, not learning new skills or anything and next thing you know - AI takes their jobs.
I mean I agree...What I was pointing out is that the existing taxi market did nothing to improve until Uber and then Lyft came along. It was completely broken, and would have remained that way.
>Morally speaking, figuring out how to mitigate this toxic byproduct is part of our remit
What's hard to figure out here? You either pay taxes or you build cathedrals. While you are doing neither the communist tendencies keep growing, because people see they are squeezed. It's that communism has any answer to it really, but the tendencies will keep growing until something happens.
Since parent mentions "toxic byproduct": Say you're the company that invented Teflon pans. you made billions. You saved billions in time for all the users of the pans... A true entrepreneurial success.
But, by how many billions did you fuck up the environment, people's health etc with the spread of PFAS everywhere?
One way to take over a network is to start with an alternative front end. We'll see if this works out for AI companies. First you have the AI consult booking.com whenever someone asks it to book a hotel, then you get more and more hotels to directly communicate with the AI company, then you drop booking.com once you have enough.
It’s exactly what I’m building. First I’m building open-source SaaS for every vertical and then leverage that to build a decentralized, interoperable marketplace.
It won't work. The future gatekeeper just has to threaten to send traffic to your competitor if you (a hotel) don't sign an exclusive agreement with them.
So marketplaces will not allow users to have their own storefronts and websites? Most restaurants on DoorDash have a website where prices are cheaper. AI will allow your computer go to that website and place the order. How could Doordash stop that? How many restaurants would be willing to take down their website to appease a marketplace?
Yes, but those businesses are normally started with the premise of only selling on DoorDash and Uber and they provide you a commercial kitchen. I’m talking about actual restaurants with storefronts, websites, and significant sales outside of these marketplaces. A restaurant like that wouldn’t close down their other sales channels just to stay on a marketplace.
Ghost kitchens might since that’s the only sales channel they are utilizing.
I've been recently asking ChatGPT specific questions about the food places near me like who has toro on the menu when I look for sushi places. Then it occurred to me that I'm better off storing notes about each food place separately in it's own md file locally. Then have an agent simply control a browser to spider every food place near my house systematically one at a time. So then all the restaurant has to do is have some way for me pull down the menu and pictures. This is something I've been wanting so I can order by talking to my agent. Whoever is working on this same thing I would say don't waste your time because it's one of the first uses of local that I feel will be superior to some generic thing like Ubereats which I don't use anyway unless traveling. So for ghost kitchens just drop a menu and show it online.
I’m building exactly that! We’re building an agentic commerce marketplace where you can bring your own shops too! We include ones we have audited ourselves but you can overwrite and add any restaurant you want.[0]
The missing part is the crowd sourced delivery. That will be more difficult to build like Uber and DoorDash have, but I’ve noticed the restaurants I use employ their own drivers so maybe we can tap into that.
I couldn't disagree more. These are intermediation businesses, that is they've inserted themselves as an intermediary between customers and providers. Everybody hates those businesses, ultimately.
Over time, profits tend to decrease. To a point you can counter that by expanding and entering new markets but ultaimtely you reach the point where your only options are raising prices and/or cutting costs. To maintain this you often need to engage in rent-seeking behavior (eg national ISPs lobbying to make municipal broadband illegal).
As an intermediary, Uber needs to increase their margin at the expense of the driver, the customer or both. Same with DoorDash and all these others.
You see this when people try and start intermediary businesses like MyClean, TaskRabbit, tutor services and so on. They all face the problem that the customer and provider are always better off leaving the platform and dealing directly because the value-add of the intermediary is a lot less than what they charge to justify their profits.
I mean, maaaaaybe a Jevon's Paradox kicks into play with human labor and replacing people with robots somehow creates even more jobs, but whenever someone says this your immediate response should be: "ok, now put your money where your mouth is and bet on it by strengthening the social safety net."
This assumes sufficient jobs. We have been below replacement jobs for a long time but we made up the difference with Bullshit Jobs. Now we might even be running out of those.
I’ve only read the article, not the full book, but I’m not sure I buy the premise.
Maybe we can’t see what the new post-AI society looks like yet, but I tend to believe society progresses as it evolves.
It doesn’t mean it won’t be rocky for many people, and good social safety nets will make this easier, but I generally don’t think there will be some kind of dystopian future where society runs out of work to do for humans.
Everyone kinda ignores that you can now generate that text in any language at a whim and it will do a far better job than previous translation programs. What a huge improvement in efficiency.
If the bullshit job is really bullshit by design and is intended to solve unemployment crisis, then LLMs will not threaten them. There will be a new kind bullshit job to plug the new hole in the resource allocation algo.
They're by structural design but no individual employer thinks they're making a bullshit job. It's a bit like how every vendor sets prices but really, the federal reserve does.
This is a technology + investing forum and all of us agree that in general creative destruction processes are enormously net positive, but they frequently do kick off a toxic byproduct in the form of said destruction (e.g. Uber and displaced taxi drivers), so there is moral entanglement between creation and destruction. Morally speaking, figuring out how to mitigate this toxic byproduct is part of our remit just as it was part of the remit of earlier industrialists to figure out how not to discharge so much flammable goo into the river that it lit on fire. We neglect this at our peril, because society merely pinches its nose if the toxic byproducts are small, but they are increasingly not small.