Two More Executives Are Leaving Uber, Drivers May Unionize (nytimes.com)

First the resignations. "The beliefs and approach to leadership that have guided my career are inconsistent with what I saw and experienced at Uber," the company's former president told Recode on Sunday, announcing his resignation. "The departures add to the executive exodus from Uber this year," writes The New York Times. An anonymous reader quotes their report. Brian McClendon, vice president of maps and business platform at Uber, also plans to leave at the end of the month... Raffi Krikorian, a well-regarded director in Uber's self-driving division, left the company last week, while Gary Marcus, who joined Uber in December after Uber acquired his company, left this month. Uber also asked for the resignation of Amit Singhal, a top engineer who failed to disclose a sexual harassment claim against him at his previous employer, Google, before joining Uber. And Ed Baker, another senior executive, left this month as well.
Jones left Uber after less than six months, though McClendon's departure is said to be more amicable. "Mr. McClendon, in a statement, said he was returning to his hometown, Lawrence, Kansas, after 30 years away. 'This fall's election and the current fiscal crisis in Kansas is driving me to more fully participate in our democracy -- and I want to do that in the place I call home."

In other news, the Teamsters labor union plans to start organizing Uber's drivers into a union, after a Washington judge rejected Uber's attempt to overturn a right-to-unionize ordinance passed by the city of Seattle.

Comments

Re:Union City Blue

[monkeyzoo]

Karma is a bitch, eh?
How shitty must this corporate culture be for all these people with great positions at an innovative, cutting edge, and super fast growing company to leave?
These departures apparently validate all the coverage about what a soul-less, morally bankrupt company it is.

Re:The end?

[Anonymous Coward]

It appears that the media has decided to dig up every little thing to kill them. So it only matters if consumers stop using it.

I think the people who are going to drop Uber already have. But I also don't think most people really care that much right now.

Failure is always an option

[geekpowa]

I for one am glad to see the wheels starting fall off this libertarian corporate experiment. It's heartening to see signs of failure in an institution whose core principals are deeply entrenched in base human behaviours such as bullying, hypocrisy and total indifference to adverse impacts to others (including it's own people).

Re:Failure is always an option

[Anonymous Coward]

I for one am glad to see the wheels starting fall off this libertarian corporate experiment. It's heartening to see signs of failure in an institution whose core principals are deeply entrenched in base human behaviours such as bullying, hypocrisy and total indifference to adverse impacts to others (including it's own people).

And/or you just hoped for someone to pull a Tyler Durden and "destroy something beautiful".

Some people just cannot recognize or accept progress...

I worked as I traveling consultant for 10 years, 80 to 100 flight segments per year, in major cities across the US, with the accompanying cab/uber rides to go with them, and I can unequivocally say that taxi/limo service before Uber was terrible. It was caused by cities artificially limiting supply/bullshit regulation/catering to special interests, all of which Uber/Lyft/etc need to continue to kill, for the good of all.

Re:Failure is always an option

[Zaelath]

Would you still make that argument if you had to pay the real cost of the Ubers you took? Probably around 3x what they charged you for every ride.

Re:Failure is always an option

[TWX]

Having witnessed the rise and now beginning of the fall of the company it's really amazing how at so many points they've done the bad or nefarious thing.

They basically lied about what the purpose of the app was, calling it a ride-sharing service when it's a taxi service.

They lied about the profitability of working for them, and doubled-down by getting people into paying for cars that they had no business buying and arguably couldn't afford because their incomes did not match the advertisements.

They lied and operated their unlicensed taxi service in places where this is illegal.

They've made efforts to avoid investigators into their illegal passenger livery practices.

They've attempted to call their drivers contractors while forcing them into working models that demonstrate that they're employees.

They've essentially stolen technology developed by others in an attempt to jumpstart their self-driving car business.

I get that in many cases existing taxi services aren't so great. On the other hand many of the laws governing taxis and sedan services are reactionary to some bad thing that happened and demonstrated a need to regulate for passenger safety. Perhaps some of what Uber and its ilk have come up with may end up as part of future regulations; the idea of determining the fare based on computer mapping is not a bad one and could be added to existing services if there was a strong enough interest.

Re:Failure is always an option

[dgatwood]

I worked as I traveling consultant for 10 years, 80 to 100 flight segments per year, in major cities across the US, with the accompanying cab/uber rides to go with them, and I can unequivocally say that taxi/limo service before Uber was terrible. It was caused by cities artificially limiting supply/bullshit regulation/catering to special interests, all of which Uber/Lyft/etc need to continue to kill, for the good of all.

Taxi services are terrible because it is hopelessly expensive to drive a vehicle point-to-point and the amount of money that the government allows them to charge is not enough to actually pay for repairs and improvements to the vehicles. Uber only "works" because:

• They've externalized the vehicle costs by forcing the drivers to pay them without allowing the drivers to actually charge fees high enough to cover those costs.
• There are plenty of people who haven't figured out how much money they're going to end up spending on vehicle maintenance as a result of all that extra driving.
• They're taking advantage of huge subsidies and burning through their cash reserves to dump their services on the market even further below cost.

The unionization threats are happening because a large enough percentage of the drivers are recognizing Uber for the complete scam that it is. By many estimates, the minimum price at which Uber will be profitable while providing the current level of service is about 4x their current prices. That makes taxis look downright cheap. Increased competition can't ever reduce the cost below a floor set by certain unavoidable costs for things like gasoline, brakes, etc. Well, I guess technically you could have a taxi service with no brakes, but I wouldn't recommend it.

Re:Failure is always an option

[ShanghaiBill]

Probably around 3x what they charged you for every ride.

Last year Uber had revenue of $5.5B and spent $8.5B, for a $3B loss. So there is no way they are subsidizing rides by 200% as you claim. Much of the losses were a result of their rivalry with Didi Chuxing, which is now resolved, and their harebrained project to develop their own SDCs, rather than just licensing the tech from Google or Tesla. They are likely subsidizing rides (to gain market share) by no more than 20-30% over market rates.

Re:Failure is always an option

[geekpowa]

I do own a company. It is a small operation but I have a couple of fulltime staff and all the trimmings. In prior roles I led teams of dozens of engineers. It is possible to operate ethically and profitably. One perk is fierce client and staff loyalty.

Re: Failure is always an option

[dunkelfalke]

I used to work for a smallish German company where the CEO always said that if anyone is to join a union he would close the shop and reopen in Switzerland. He also ignored many laws and regulations and the wages sucked. 5 years after I was fired half of the employees was new. Now I am working at a company of the same size, automatically belong to a professional association, earn almost twice as much even though there are no bonuses, the CEO follows all laws and regulations and even does charity work. Many of my colleagues have been at the company for 20 years. Guess where I like it better?

Re:Failure is always an option

[silentcoder]

You're ignoring the massive subsidation being done by the hoodwinked drivers. In South Africa the average Uber driver makes about R1400 per week. It is physically impossible in South Africa for the amount of driving you have to do to make that - to fuel and maintain a vehicle for less than R2000 per week. That's assuming the car was bought for cash.

Their workers are actually operating at a loss. And the company is getting away with it because badly educated (often barely literate) drivers don't realize the maintenance costs - especially since those tend to come in the form of lump sum expenses months down the line.

I don't have numbers for other countries but the odds of it being different elsewhere are somewhere between zero and fuckall.

Re:Failure is always an option

[silentcoder]

It's very simple - if you are asking people to work unpaid overtime - you're an asshole. If there is too much work for the current people to do in 8 hours a day - then you're obligated to your share-holders to hire more workers, NOT to overwork the current staff.
Your supposed to meet demand WITHOUT being a dickwad.

Unions are one of the key ways we try to ensure a company that needs 16 hours of work done a day hires TWO people instead of just one (which actually CREATES jobs by preventing over-work of the existing staff). Frankly if your company needs to operate 24/7 and you have less than 3 people per role then you're an asshole who deserves to be out of business (in order to open up the market for a non-asshole company).

Re:Failure is always an option

[Billly Gates]

It's very simple - if you are asking people to work unpaid overtime - you're an asshole. If there is too much work for the current people to do in 8 hours a day - then you're obligated to your share-holders to hire more workers, NOT to overwork the current staff.
Your supposed to meet demand WITHOUT being a dickwad.

Unions are one of the key ways we try to ensure a company that needs 16 hours of work done a day hires TWO people instead of just one (which actually CREATES jobs by preventing over-work of the existing staff). Frankly if your company needs to operate 24/7 and you have less than 3 people per role then you're an asshole who deserves to be out of business (in order to open up the market for a non-asshole company).

Tough. When work doubles for a 3 month period I regularly work 60 to 75 hours a week every year. That is normal and not fair to the shareholders or to the new hires to hire them train them and fire them again? I worked at an amusement park when I was younger. Guess what? Summer nights 16 hour days. I worked at Staples later. Back to school I slept at the store and worked double shifts for a month. Recent job I did the same as YOU NEVER SAY NO to a client. Management wanted to secure the deal and we already promised the client and it would be un us and be fired if I didn't make it happen.

Your name says silent coder. Are you telling me in your coding career you never had a client demand something or had a requirement change at the last minute or had the sales team promise another feature? Ever?

I am not saying all the time. I am saying it happens and part of being professional is to show loyalty and dedication to your objectives. If a company sucks people quit. But that is not always and if it is then the top talent eventually leaves.

Re:Failure is always an option

[silentcoder]

There's a huge difference between "sometimes when it's an emergency" and "all the time" - trouble is that "all the time" is the norm when unions are not there to prevent it.

More importantly - on those occasions when the company requires me to fix their bad management by working overtime, I demand the right to get paid double-time for doing so. All people deserve that. You take away my time with my daughter -you had better compensate me for that - double.

Re:Failure is always an option

[silentcoder]

> If a company sucks AND PEOPLE HAVE OTHER OPTIONS people quit

FTFY.
Exploiting their lack of other options is the ultimate definition of asshole. Or you could use the older name if you prefer: bondage (which is really just a nicer name for 'slavery').

Re:Failure is always an option

[mrvan]

>There are plenty of people who haven't figured out how much money they're going to end up spending on vehicle maintenance as a result of all that extra driving.

The IRS mileage rate is supposed to be an average cost for operating a vehicle. It is 53.5 cents per mile. Uber pays about twice that per mile in San Francisco. So if you can go at 60 MPH you'll be making about 30 bucks an hour, which is not bad for unskilled labor.

(1) You're assuming all miles and hours are 'billable', while in reality you would be driving empty towards a pickup and waiting for the next pickup.
(2) 60MPH in San Francisco is going to get you some pretty bad fines most of the time :). But even if you drive only on highways that allow those speeds, your average speed is going to be much lower, probably closer to 30MPH for realistic cases.

So, let's assume you spend every hour waiting for 10 minutes, driving 30MPH to the pickup for 10 minutes, and driving a customer at 30MPH for 40 minutes, your average hourly gross income is 20$ (40/60*30*1$) and your expenses are $13.375 (50/60*30*.535), giving you a real income of under 7$ per hour. Good luck finding a house and food for that in SF area...

Re:Failure is always an option

[tehcyder]

Drivers are NOT staff. They are independent contractors. It says so right in their contract. I don't understand why this is so hard to grasp for some people.

The law is a bit more complicated than that. Writing "you are not an employee" on an employment contract does not mean that you are magically not an employee.

Re:Failure is always an option

[jbmartin6]

Perhaps parent wasn't talking about cost, just talking about the general usability. Many normal cab companies are coming out with their own apps, most of them never would have done it without Uber. The old model of standing on the street waving was far out of date, but they would never have changed due to their protected market position.

Re:Failure is always an option

[fluffernutter]

Perhaps if they removed regulations today the difference would be minimal, but you're not taking into account where regulations have gotten us over time. Regulations have let to incremental changes and improvements over years that have made a safe industry. Without regulations ever having existed the industry would be no where near as safe.

Re:The end?

[TWX]

Honestly it matters quite a lot if Uber was really actually profitable, or if it was only profitable because a certain class of employee (ie, the driver) was willing to be hoodwinked into basically not even making cab-driver wages while suffering wear and tear on their own personal vehicle, versus actually being profitable with its own model.

It seems that Uber's long-term goal was to do away with having drivers operating their own cars, but unfortunately for them, they've tried to define the self-driving car market as-implemented too long before it's really ready to be implemented. They've gotten caught with their hand in the cookie jar too, as it appears they stole self-driving technology developed at great expensive by someone else, and if they can't use any of those self-driving developments then they're probably doomed.

I can see the appeal, summon a self-driving car and it takes you where you want to go, then summon another one when you want to return. I can see trying to be the one to get out in front of it too, to ride the wave of success that might well come from it. You've got to get the timing right though, and the timing isn't right yet.

Re:Union City Blue

[Anonymous Coward]

Alternatively, once a company is circling the drain, the most skilled employees who can get jobs easily elsewhere are the first to jump. The plodders go down with the ship.

Re:The end?

[rtb61]

Likely reason for the departures at high level, they believe the company will implode prior to the IPO cash in, so no reward for staying. They would be spitting chips, greed at the top, delayed the IPO too long and now it is too late. No matter how bad, the banksters still would have been able to scam a high price at IPO but executive departure would be indicative that they do not expect the company to get there and then can make more money by taking their skills and built up knowledge elsewhere.

Re: cart before the horse?

[radiumsoup]

There is a very low bar to entry when becoming an Uber driver, and so I would hazard to say that the vast majority of people who want to drive for Uber are already driving for Uber. So, if Uber were to suddenly drop all the current drivers, there would be no great rush of new drivers trying to fill the void. Just the opposite would happen, actually. The Uber drivers who had just been let go would switch to another service, and the folks who try to hail an Uber will be told there's a 2 hour wait for a car and so will simply take 10 seconds to close their Uber app and open their Lyft app instead. There's no possible way Uber could survive cleaning the slate like that.

Jumping ship before the bottom falls out.

[Chas]

They're getting out now, before the unionization kills Uber dead.

A union can demand all the money it wants for its workers.

But if the company goes broke or simply can't generate the business required to support those figure.

Poof. Dead business.

Re:Jumping ship before the bottom falls out.

[silentcoder]

And that's why libertarianism is a crime against humanity and the market CANNOT be allowed to set wages unregulated - because wages are NOT just another consumable in a market. They are parts of people's LIVES. Human BEINGS.

You know what the key thing about human beings is ? THeir the PURPOSE. Their why we have economies. The economy exists to serve the people NOT the other way around. And never EVER denigrate workers for being greedy - because you know what ELSE workers are ? Consumers.

Good fucking luck selling ANYTHING in a market full of underpaid workers - because underpaid workers = consumers without money = no demand = no customers = bankrupt business.

Labour, like everything else in the economy - must be sold at a profit to be sustainable - and if the market won't pay a profitable price for it - then it cannot be sustained. But UNLIKE everything else in the economy - if the labour market collapses because the demand is too low -then EVERY OTHER BUSINESS COLLAPSES WITH IT.
Because labour is not JUST a commoddity - it's also the business that provides all the buying power to consumers, the business that pays nearly all the taxes and funds all the government services and infrastructure - including roads and the military and the police and the judges. It's the fundamental business upon which all other economic activity relies.
Make it unprofitable - and there is no economy, because you cannot have an economy without customers.

Re:Jumping ship before the bottom falls out.

[Billly Gates]

Mathematically you are incorrect.

Milton Friedman published a proof on this with price settings theory. Capitalism benefits everyone. It is a 2 way street a buyer and seller.

Economies serve those who want to make money and those who want to buy products and services. Labor it is those who want to earn money and those who need a service provided.

If you do not like this then go to North Korea or Cuba and see how they live compared to your country. As the money moves through the market faster the higher the wages of those who want to work and those who sell things both benefit. Everybody is greedy man. Of course businesses want to maximize their value. Of course YOU want to maximize your value and work less. Consumers want cheaper products and more of them. The balance is achieved based on scarcity.

Re:Jumping ship before the bottom falls out.

[serviscope_minor]

Mathematically you are incorrect.

LOL nope.

You can prove whatever you want if you choose the axioms. If your assumptions about human behaviour are not modelled correctly then your proofs may be mathematically consistent but they won't have any bearing on the real world.

Re:Jumping ship before the bottom falls out.

[jcr]

Friedman was not an Austrian, he was from the Chicago school. You don't know shit, quit trying to pretend that you do.

-jcr

Re:The end?

[Billly Gates]

Uber got through because the Taxi and Limo companies got greedy and so did their employees. Unions and bribery and tax revenue created an artificial market. Now capitalism created a solution that should have been fixed.

Uber Isn't Even Profitable

[dcollins]

"It's hard to find much of a precedent for Uber's losses. Webvan and Kozmo.com—two now-defunct phantoms of the original dot-com boom—lost just over $1 billion combined in their short lifetimes. Amazon.com Inc. is famous for losing money while increasing its market value, but its biggest loss ever totaled $1.4 billion in 2000. Uber exceeded that number in 2015 and is on pace to do it again this year [2016]."

Bloomberg

Re: The end?

[sg_oneill]

I doubt it. Billion dollar companies just don't fold , they burn down slowly, and there's a lot of things that need to go wrong before investors simply abandon the fortunes ploughed into the company.

Some companies constantly churn executives (think: yahoo) constantly and still survive. We are a long way off knowing if uber is that sort of company and if it is , are the fundamentals right to ride it out

Bubble Company

[monkeyxpress]

I think you're seriously overestimating the strategic thinking capabilities of the people behind Uber. They haven't, up until recently, had even an R&D interest in developing driverless cars, and there is little chance they can realistically compete with Tesla, Ford, Google, VW, etc, even if they could raise another couple of billion in cash to burn. The likelihood of them coming from behind and beating the others to a viable driverless car solution is zero.

Further, what exactly do they have that will maintain their market position? An app? How easy is it for Google to turn the 'book Uber' button in google maps into a 'book google car'? If anything, they have worse than nothing - they are beholden to the company that is well ahead of them in the technology they desperately need to have a viable business model.

What I think Uber has been for quite a while now (granted, I don't think this was the original plan) is a financial bubble milking machine. Unless the board is actually delusional, the only viable strategy behind them entering the driverless car development race was to keep the IPO price at stupid levels. And if it wasn't for the PR disasters coming out of Uber on an almost weekly basis now, they would have been obscenely successful in achieving this.

Re: Bubble Company

[TimMD909]

Uber has been working on driverless car technology for years in Pittsburgh. They simply kept it quiet until recently. Their self driving technology is pretty awesome. An engineer from Uber hooked me up with a ride on my birthday this year and it was a very pleasant ride.

Re:Union City Blue

[Paradise Pete]

The plodders go down with the ship.

Often with otherwise underserved promotions due to the vacuum above caused by the departures.

Re: The end?

[Hognoxious]

Billion dollar companies just don't fold , they burn down slowly

Like Enron?

Re: The end?

[BarbaraHudson]

Au contraire, billion-dollar businesses can disappear in a flash. Bernard L. Madoff Investment Securities LLC is one such example - he owes $170 billion in restitution, based on a fraud of over $60 billion. At one point he was the largest trader of NYSE-listed stocks in the world, doing up to 15% of all trades. $740 million a day in trades isn't chicken feed.

Re:The end?

[Gavagai80]

Honestly it matters quite a lot if Uber was really actually profitable, or if it was only profitable because a certain class of employee (ie, the driver) was willing to be hoodwinked

Uber has never been profitable regardless, and it lost $3billion last year. It operates on venture capital. Profit is so 20th century.

They should unionize or form a not-for-profit Uber

[ErichTheRed]

I'm a big proponent of unions simply because I can see what happens when business owners are allowed to do whatever they want to their employees. The number of ethical employers that treat their employees well is a tiny fraction of the workforce, and I wouldn't count Uber in this class.

People forget that taxi driver is one of those job of last resort for people who don't have the skills to be in the higher levels of the workforce. I live near NYC and some of the recent immigrant cab drivers I've met have crazy stories of coming here, some as refugees, working 14 hour days, 6 days a week while they're learning English and going to school. No one in IT believes me, but this is just a preview of what's coming for a huge swath of white collar workers who will be wiped out in the next automation wave. Those nice safe jobs new grads get shuffling paperwork at some big company are getting squeezed now, but could just disappear entirely very soon since companies seem to be in a massive optimization drive. The white collar workers of today are going to end up as the Uber drivers of tomorrow as no one wants to hire them for their skills anymore. I say we should try to make our Mad Max style future of fighting for scraps as comfortable as possible now while we still can.

The other thing I could see happening is a drivers' association forming a not for profit that makes their own Uber-style app and charges drivers a reasonable percentage of the fares. It's amazing how much better off everyone is when you take the profit motive out of the equation. Note that I'm not saying "non-profit," because people do need to be paid and it's not a charity -- but a not-for-profit removes the pressure to turn the screws on the employees to the maximum revenue-generating setting. It would be a kind of non-scummy, non-evil Uber and they could even use a similar business model.

Re:The end?

[fluffernutter]

If you're competent and enjoy spending your personal time networking, on job interviews, and climbing the corporate latter maybe you're fine without a union. Some of us are competent and just want a job and not worry about the other external bullshit.