Uber’s C.E.O. Choice Faces a Question of Ambitions
This may be the CEO most deserving of whatever he is paid, ever.<p>He&#x27;s tasked with righting a ship that&#x27;s leaking everywhere–a board embroiled in litigation, a former CEO still in a position of power, and resenting his ouster. Employees who, by now, are self-selected to consider any moves to heal the toxic culture as assaults on themselves.<p>Meanwhile, they&#x27;ve spent $1200 of investors&#x27; money on every user they currently have (including the expensive failed adventures in China and Russia). It isn&#x27;t quite clear if they&#x27;re profitable anywhere, or if they&#x27;re continuing to be a program to distribute wealth from the bottom (drivers) and top (investors) to the middle class rivalled only by the New Deal.<p>What&#x27;s still ominous is the complete lack of a moat around their business. Every driver and every customer is a free app install away from giving any competitor a shot. Their autonomous car project is in deep trouble–even if the Waymo lawsuit doesn&#x27;t kill it, it now seems certain that a lot of assumption were optimistic–exemplified by Apple&#x27;s demotion of its competing project, and the fact that the far superior technical effort by Google hasn&#x27;t produced anything market-ready, yet.<p>But even if, it was always counterintuitive for autonomous driving to be a driver (heh!) for Uber&#x27;s future: if there is one hard problem that Uber has arguably solved, it&#x27;s managing a fleet of drivers and their cars, with all the trouble such a huge workforce of mostly low-income people with low job attachment brings. It is this core competency of Uber that would be rendered worthless by autonomous vehicles.<p>Instead, car rides in such an environment will be bare-knuckle fight, requiring efficiency in the face of barely-existing margins, and deep pockets to survive phases of intense competition. There is nothing that could stop any business with money to burn to put a few dozen cars into whatever happens to be Uber&#x27;s most profitable market at any given time and reduce their margins to 0 or less overnight. After all, it doesn&#x27;t take that many cars to provide service within the not-that-large area people spend their daily lives in, and any number of competitors can create beachheads by convincing a local community to give their app a try. The competitors start $1200 ahead, which translates to two years of free service at the $50&#x2F;month the typical Uber customer spends.<p>As long as personal car ownership is still a thing, autonomous driving will actually turn every owner into a competitor. Your car sitting around uselessly during your workday is suddenly just a click away from going to work itself, thanks to the car manufacturer&#x27;s preinstalled sharing network. They&#x27;ll take 15% to process payments, but it&#x27;ll be insured, cleaned after every 5th ride, and back at your office fully charged at the preselected time. Of course the manufacturers will also just let their inventory loose in any area that is potentially profitable. Their capital costs are lower than Uber&#x27;s, they get the cars at internal prices without dealer markup, they have access first to any new car that people may want to try–oh, and they&#x27;ll even accept running at a slight loss when they can convince themselves that taking a ride in their new car may convince people to buy it.<p>Meanwhile, what is Uber but a bro-themed map app with a balance sheet in Ferrari red?