back to article Why Uber isn't the poster child for capitalism you wanted

Within minutes of Uber losing its licence to operate in London, Uber became a totemic icon of innovation and free enterprise market capitalism that was being crushed by vested interests in cahoots with bureaucrats. Boo to the corrupt, killjoy socialists! Hurrah for innovation! Sign the petition! But this is a simplistic, …

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  1. Fihart

    Uberbnb

    Similar story with airbnb -- apparently just disrupting the hotel business but actually exacerbating the housing crisis as landlords switch from Assured Shorthold lets of a year or two to weekend lets -- for about the same as a week's regular rent.

    Add to that the undermining of communities and noise nuisance to neighbours of early morning arrivals and late nights out and airbnb is proving a menace in London and, doubtless, in other tourist destinations. Tenant groups and local councils are looking to new legislation.

    1. Professor Clifton Shallot

      Re: Uberbnb

      Berlin is certainly unhappy about AirBNB and similar property let setups.

      Guardian reports on Berlin's attempts to regulate

      1. Fihart

        Re: Uberbnb

        Barcelona too. Demos against.

    2. Downside

      Re: Uberbnb

      Locally, ten years ago, the transition of an inner city residential rental / owner area to student tenancy's was greeted with similar dismay - late night partying disturbing the people who lived there - and triggered a rapid exodus of tenants, and owners moved out, renting their houses to students. Sounds pretty similar to those airbnb gripes to me. The real problem is a lack of housing in the first place.

      Places have always had areas where people could rent, get gentrified and have to move out. That's the difference between owning and renting.

      Full disclosure: I've rented a few places off airbnb. It has pretty solid payment protection for both parties and a world wide brand.

      1. boltar Silver badge

        Re: Uberbnb

        "The real problem is a lack of housing in the first place."

        The real problem isn't lack of housing, its too many people. You can't import 2 million extra people into the UK in 20 years and expect housing stock to keep up especially in a city like London where there physically is no space for more housing. Well you can, if you're a deluded Guardian reading middle class liberal halfwit who only cares about quickly made skinny vanilla mocha in your local organic artisan coffee shop who can pay a pittance to their workers due to oversupply of cheap labour, and don't give a damn about the knock on effect this has of reduced wages, zero hour contracts and massive rent rises on the people who do the dirty work.

        Ditto Uber - Tarquin and Jemima might be online SJWs by day, virtue signalling and emoting on Twitter and Facebook with the best of them. But by night all they care about is getting home quickly and screw however that is achieved. An unpleasent rapacious silicon valley bro-fest that doesn't report criminal offenses by its drivers and treats its staff like shit? No problemlo, they'll use it, wouldn't want to slum it with the proles on the tube or night bus would we?

    3. The Man Who Fell To Earth Silver badge
      FAIL

      Uber is a criminal organization

      Uber is an organized crime organization that meets all of the necessary criteria to be prosecuted by the DOJ under RICO. And under RICO, the money behind Uber can be prosecuted as well. If the DOJ would do that, VC's would be a little more reluctant about funding companies whose business models are based around criminal behavior.

      1. blw37

        Re: Uber is a criminal organization

        I refuse to use Uber because its entire business model seems to be "We don't need to obey the law unless we want to." In New Zealand there is no limit on the number of taxis on the road, only a requirement that drivers are approved by the police and have a stricter drivers' licence. Uber insist that they don't need these checks. They also say that they don't need to pay drivers at minimum wage, and that they can charge customers at a different rate than what the drivers are told about. There are many other problems with their legal compliance, and these are just the tip of the iceberg

    4. This post has been deleted by its author

      1. Fihart

        Re: Uberbnb @jemmings

        "2 types of AirBnB.

        1 - people with a spare room, who need a lodger.

        2 - capitalists who buy 20 flats and let out each room at low cost unfair to hotels."

        A very good analysis. Your example 1 is how airbnb was meant to operate and why Government eased restriction on number of let nights.

        Your example 2 is how airbnb is often working. Worse, many landlords are breaching leasehold covenants designed to protect neighbours and are exceeding the number of let night limits.

        Probably few care about the effect on hotels, but the drying up of rental properties is serious.

    5. Anonymous Coward
      Anonymous Coward

      Endgame: Self Driving Uber Cars

      Uber's end game is self driving taxis.

      Since by the figures listed in the article, ~50% of the cost is the driver's earnings, it is obvious where the "efficiency" will come from. Everything up to then is a brand establishing run-up.

  2. Anonymous Coward
    Anonymous Coward

    Uber and London

    I think Uber's position can be seen in how it's played out over the last few days

    Friday

    TFL: "Uber can't have a licence to operate until they sort themselves out"

    Uber: "OMG, you're so unfair. I'm going to get legal on your ass."

    Weekend

    Uber users: "OMG, TFL are so unfair"

    Tech supporters "OMG, TFL are so anti-innovation

    Monday

    Uber "We've made mistakes. And we want to work with TFL"

    TFL: "Sounds better"

    1. Anonymous Coward
      Anonymous Coward

      Re: Uber and London

      You missed off the bit where the totally impartial BBC is being very Pro Uber for some strange reason.

      1. Tinslave_the_Barelegged Silver badge

        Re: Uber and London

        Yes, I saw that astonishing puff piece for Uber in the BBC web site. No doubt the result of the costs of lobbying/PR mentioned in the article, but really concerning to see such a blatantly skewed article on the Beeb.

        1. The Boojum

          Re: Uber and London

          Maybe the Beeb sees Uber as a way of cutting its massive taxi bill whilst making the same number of journeys?

        2. Anonymous Coward
          Anonymous Coward

          'astonishing puff piece for Uber on the BBC'

          The free exposure for not just Uber, but also Facebook, Google, Twitter et al, is hard to understand... Especially as these US giants are slowly killing old media or 'the MSM', which the beeb is part of.

        3. Degenerate Scumbag

          Re: Uber and London

          The Beeb stopped being an impartial news source decades ago, if it ever was one.

      2. big_D Silver badge
        Coat

        Re: Uber and London

        BBC - all those researchers wondering how they will get home next week, if Uber loses its license...

        Mines the one with a season ticket in the pocket.

      3. Anonymous Coward
        Anonymous Coward

        Re: Uber and London

        Is that the truth or did you hear it on the BBC strikes again.

    2. FuzzyWuzzys Silver badge
      Happy

      Re: Uber and London

      You missed a line at the end...

      Millennial whingers: <silence>

    3. Alan Brown Silver badge

      Re: Uber and London

      > Uber "We've made mistakes. And we want to work with TFL"

      > TFL: "Sounds better"

      Indeed. and by drawing a line in the sand with Uber, TfL has set the bar for everyone else too.

      The next few months are going to be interesting. There are a number of private hire firms across London with worse records than Uber and if TfL doesn't go after those next, Uber lawyering up might be the least of their troubles.

  3. Anonymous Coward
    Anonymous Coward

    Socialism makes bad monopolies possible, whether that's black cabs or Uber.

    1. Loyal Commenter Silver badge

      I think you're confusing socialism (a left-wing political ideology) with neoliberalism (a right-wing economic ideology, despite its left-wing sounding name).

      Neoliberalism (as practised by our conservative government) gives us deregulation, lack of public funding, and 'austerity'.

      It is good for those who already have money, as they can make more profit if there is less protection for workers and consumers (such as a decent living wage, sick pay, maternity pay, protected working hours, health and safety, background checks on workers, corporate responsibility for customer protection, etc.)

      It is bad for everyone else, and is why we have people working and in poverty, on zero-hours contracts or low-paid long-hours jobs. It is also why we have exorbitant property prices, unaffordable rents, lack of social housing, and tragedies like Grenfell. It is why we have a stagnating economy, as more of the capital flows from poor to rich, and why we have a crumbling transport infrastructure run for profit by mostly foreign-owned investors.

      1. Arctic fox
        Headmaster

        @Loyal Commenter "It is bad for everyone else..........."

        Not surprising given that Uber is an example of predatory bandit capitalism at its very worst. They are no example of freedom, they do not enter a market to disrupt it, they enter it to destroy it and impose their own interests on the remains.

        1. Justin Case

          Re: @Loyal Commenter "It is bad for everyone else..........."

          >>Uber is an example of predatory bandit capitalism at its very worst. They are no example of freedom, they do not enter a market to disrupt it, they enter it to destroy it and impose their own interests on the remains.

          What you said. For one shining naive moment back when t'internet was taking off I truly thought it was going to put consumers directly (ish) in contact with producers. Now it's increasingly a market place dominated by big money and thuggish middlemen.

          1. John Smith 19 Gold badge
            Unhappy

            "a market place dominated by big money and thuggish middlemen."

            That would be the "Labour arbitrage" the article talks about.

            Welcome to the future.

          2. Rich 11 Silver badge

            Re: @Loyal Commenter "It is bad for everyone else..........."

            Now it's increasingly a market place dominated by big money and thuggish middlemen.

            So just like pretty much everything else, then? The only people who stand the best chance of making a lot of money are those who already have a lot of money. The Saudis, to take just one example, buy up London property and leave it to sit empty, and they invest in predatory ventures like Uber. Our government then rewards them by burying reports which implicate them in the spread of extremism.

            Who says you can't buy love?

      2. oiseau
        Thumb Up

        " ... confusing socialism (a left-wing political ideology) with neoliberalism (a right-wing economic ideology, despite its left-wing sounding name)."

        Well said.

        Though I gather from the tone in his post that 'anon' won't understand any of it.

        Cheers.

      3. Loyal Commenter Silver badge

        Interestingly, I seem to have garnered a fair number of downvotes for my (albeit brief and simplified) explanation of the difference between socialism and neoliberalism, but no comments as to why these people think I am wrong, or refutation of the points I have made. Are the right-wing sock-puppets out in force today?

        Any of those downvoters care to elaborate? Nope, didn't think so...

        1. Lysenko Silver badge

          re: Interestingly, I seem to have garnered a fair number of downvotes

          You used a swear word - "liberal". Half the colonials will see a red mist descend because they think it means something to do with "socialism" (quite the reverse, as you noted) while half the locals will react similarly because they know what it means and as socialists they despise it.

          You're being downvoted (I suspect) by the sort of knee jerk animus that would make a Biologist reluctant to discuss Paedogamy in certain pubs.

        2. boltar Silver badge

          "Any of those downvoters care to elaborate? Nope, didn't think so..."

          I gave you an upvote - however you're wrong on the reason for soaring rents. Its a simple supply and demand scenario. New Labour and following them the Tories let literally millions of extra people into the country. No housing market can keep up with that and unless you want to see rent controls - which brings its own set of problems - then short of those millions all clearing off again nothing can be done. This is an entirely deliberately politicaly engineered problem.

          1. Alan Brown Silver badge

            "New Labour and following them the Tories let literally millions of extra people into the country"

            In a simple summary: "Bullshit". To expand it a little "Utter bullshit"

            Even if governments had let _zero_ people into the country over the last 40 years there would still be a housing crisis for the very simple reason that the number of people per household has reduced from an average of 4-5 in the 1960s to around 2 now. It's actually worse than it seems if you look at modes, because there are more 1-2 person households than all higher numbers combined.

            The effect has been a doubling (at least) of housing requirement without even changing the population and the UK simply hasn't doubled its housing stock in that period.

            Couple that with a movement of around 20% of the UK population from North to South over the last 40 years and you have a perfect storm.

            Foreign immigrants (and in particular eastern europeans) tend to live in higher numbers per household so they're far less of an influence on demand than you seem to think. The targetting of them is all about pointing at someone who looks different (smoke and mirrors) and hoping you won't pay attention to the man behind the curtain pulling the levers.

            Even back in the 1980s before the great sell-off started in ernest, single bedroom council housing intended for retirees was being snapped up by young couples (mostly GenXers) faster than it could be built, because the demographics were already changing rapidly at that point. The knock-on effect was that of retirees sitting in 3-4 bedroom council housing who couldn't be moved because of the double whammy of there being nowhere to move them to and extreme hostility from their children (baby boomers), who were fully expecting to inherit those flats when the parents died and making life hell for parents who openly considered moving.

            1. boltar Silver badge

              "In a simple summary: "Bullshit". To expand it a little "Utter bullshit""

              Unfortunately the standard response to facts in certain quarters.

              "Even if governments had let _zero_ people into the country over the last 40 years there would still be a housing crisis"

              No, there wouldn't. Because while the housing supply hasn't kept up with demand there has been enough built to supply what would have been the UK population if we hadn't had mass immigration. Next...

              "Foreign immigrants (and in particular eastern europeans) tend to live in higher numbers per household so they're far less of an influence on demand than you seem to think"

              As someone who lives in London and has had a number of foreign renters next door and nearby I'm afraid thats BS. All tenanted properies have legal limits on how many people can live there and the (legit) landlords of east europeans don't tend to cram in any more than they would with locals.

              "The knock-on effect was that of retirees sitting in 3-4 bedroom council "

              There have always been retirees living in large council houses and kids of council tenants who wanted the property. This is nothing new so don't pretend its part of the problem. It isn't. The problem is mass immigration and whilst it obviously suits your political agenda to say otherwise it doesn't change the bare facts and luckily last year the british people saw through the mendacious BS of people like you.

        3. Neil Stansbury

          I'm happy to....

          Because socialism isn't just a deluded naive left-wing political ideology concerning the state ownership of good & services any more, it's a much broader dangerous mindset pervading every aspect of our lives.

          Labour and the Tories are just two sides of the same coin, because they are all "Socialist" at heart.

          I use the word "Socialist" in the sense of "not-free-to-chose", and that "they" know what is best for "us". "Us" of course being a ubiquitous amorphous mass where individuals and their personal choices take second place to what "they" decide is the "greater good". Of course the "greater good" depends on who's votes they're after today, tomorrow or next year.

          I'm quite certain my fellow citizens who's houses are being forcibly purchased & knocked down for HS2 et al don't feel part of either their or anyone else's "greater good".

          Neoliberalism is nothing more than a Socialist sop to persuade people that you aren't so naive and conceited to think that you can actually plan something as complex as human societies or their interactions in a supposed free-market.

          Of course what we eventually realise is that there is no free-market, just a market of enforced choices dictated by those in power deciding on the current "greater good".

          Capitalism doesn't precluded monopolies or "state" sponsored evils - only genuinely free markets participated in by genuinely free individuals can stop that.

          As long as our masters of the universe think they have a right/obligation/whatever-excuse to interfere with everyone else's free choice - of which an especially good example is oh I don't know...

          Say like deciding who can or cannot offer their service of driving someone somewhere in their car in exchange for fair and equitable compensation, then distortions like these will always occur.

      4. Not also known as SC Silver badge
        Pint

        @Loyal Commentator

        "Neoliberalism (as practised by our conservative government) gives us deregulation, lack of public funding, and 'austerity'."

        Thank you for finally giving a definition of neoliberalism I can finally understand. Usually the word is just thrown about as an insult without any attempt to actually clarify what it means.

        1. Andrew Orlowski (Written by Reg staff)
          Headmaster

          The N word

          You've defined liberalism. "Neoliberalism" can mean anything you want to mean. My friend the former Reg columnist who wrote a very big book on it has used it to include state expansion too.

          "Neoliberalism" serves the same purpose as "New World Order" does for conspiracy theorists of the right. Fortunately, since only academics and other Dave Spart types ever use the N word, we can safely ignore it.

          1. Loyal Commenter Silver badge

            Re: The N word

            Damn right, I've defined liberalism. The only actual distinguishing feature between liberalism, and neoliberalism, is the 'neo' part, which as anyone with a smattering of knowledge of the Greek language knows, means 'new'.

            As wikipedia says:

            Neoliberalism or neo-liberalism refers primarily to the 20th-century resurgence of 19th-century ideas associated with laissez-faire economic liberalism

            In other words, neoliberalism is the resurgence of the failed 19th century idea of liberalism, that gave us all the wonderful standards of living seen in the 19th century, with all those lovely tenements and workhouses.

            It's the resurgence in the latter part of the 20th century of ideas that had already been dis-proven a hundred years earlier, but for which that failure had gone out of living memory. Much like the resurgence of the far right in modern politics, some 70 years after it last reared its ugly head as a main player on the world's stage.

            "Those who cannot remember the past are condemned to repeat it"

            1. John Brown (no body) Silver badge

              Re: The N word

              "The only actual distinguishing feature between liberalism, and neoliberalism, is the 'neo' part, which as anyone with a smattering of knowledge of the Greek language knows, means 'new'."

              So are you saying the only difference between Labour and Tony Blairs New Labour was the word New?

              1. Loyal Commenter Silver badge

                Re: The N word

                So are you saying the only difference between Labour and Tony Blairs [sic] New Labour was the word New?

                Obviously not, but that's a nice straw man you've got there.

                My point is that neoliberalism is essentially liberalism by another name, and that the name itself defines it as a new version of the same thing.

                New Labour, on the other hand, was conservatism wrapped in a thin veneer of socialism, with a deceptive name which was used to lead people into thinking that it was something it wasn't.

                It's not like this is a new trick in politics. See also: national socialism, or any country calling itself a "Democratic People's Republic".

          2. Lysenko Silver badge

            Re: The N word

            Liberalism is Adam Smith. Neoliberalism is Friedrich von Hayek disinterring the corpse of the "invisible hand" 200 years later. The meaning is perfectly clear in English, it just gets confused in American because the closest thing they have to liberals are anarcho-capitalists ("Libertarians" in American) due to the unholy[sic] alliance of liberal ("Conservative" in American) economics and statist, illiberal ("Conservative" again, in American) social policies.

            A true liberal supports your inalienable right to have an abortion on demand, accompanied by your same sex wife (private sector sperm bank) so long as you can pay a private healthcare company to carry out the procedure. If you can't afford that then you're welcome to have a go with a coat hanger, but if you bleed to death then that's on you. Feel free to make your final moments more comfortable with some private sector heroin.

        2. John Brown (no body) Silver badge

          "Usually the word is just thrown about as an insult without any attempt to actually clarify what it means."

          Usually by people who don't actually know what it means.

      5. DRue2514

        I think it is a little more complex than that.

        We have exorbitant property prices because of planning constraints and Grenfel,l we don't know the full story, but the council and building regs seem at part to blame, not necessarily neolibralism. As for transport - the airline industry that is highly competitive has seen much lower fares than the days of flag carrier airlines. But if you mean trains then that just seems like a Govn't run outsourcing project. They aren't great now but were they better in the days of British Rail? Not in my experience.

        1. Anonymous Coward
          Anonymous Coward

          Property Prices

          "We have exorbitant property prices because of planning constraints"

          We have exorbitant property prices because -

          - for the last two decades, all of the big construction companies have been furiously building new blocks of 'luxury apartments', which are now requently sold to overseas investors because ordinary people in the UK don't want and in any case cannot afford these. It is not so much a case of a housing shortage, as a shortage of the right KIND of housing.

          - UK.plc sees stamp duty as a nice little earner which must be protected at all costs, has refused to regulate the housing market, and largely backed away from any serious attempt to oblige builders to contruct more 'affordable' housing.

          - The UK has also for the last two decades promoted the idea of property as an investment vehicle, which wealthy city folk have gleefully piled mindblowing amounts of money into building up property portfolios. Of course the rents they must charge to cover their many mortgages and build up capital to buy yet more properties pushes the "market rent" up sky high

          - Most of the UK's major pension schemes are now propped up by "equity" investment funds, to the point where the UK govt cannot risk doing anything to devalue property

          - etc etc.

          In short the country is in a huge mess thanks to naked greed which goes right to the top of government.

          1. Alan Brown Silver badge

            Re: Property Prices

            "- The UK has also for the last two decades promoted the idea of property as an investment vehicle"

            Not just the UK.

            In a increasing number of countries, what has been passed off as "economic growth" has actually been inflation of house prices (which doesn't produce anything, and therefore doesn't contribute to the economy) and other invisibles - effectively a bloody great ponzi scam where people think they're rich until they try and cash in.

            When someone in their 60s can sell their house and make several times more money from that one sale than their gross income over their working life, there's something amiss.

            As with shares, the notional value is worth nothing if you can't sell it - and it's worth noting that actual housing sales outside the top 1% are still effectively stagnant despite the high prices.

        2. Loyal Commenter Silver badge

          @DRue2514

          We have exorbitant property prices because of planning constraints

          It's a little more complex than that. There are a number of issues that combine to form the problems with the UK housing market. Here are a few of them:

          - Use of property as an investment, rather than somewhere to live

          - 'Right to buy', which itself isn't a bad thing, but couple with not replacing the social housing stock that was sold, led to a squeeze on the availability of affordable housing.

          - Rules that were introduced (in the '90s IIRC) that prevented councils from borrowing to build new housing stock, despite that fact that they would have almost certainly made a profit from it.

          - Planning constraints on 'greenbelt' land preventing housing from being built where it would be useful, justified by some misrepresentation of how much of our country is urbanised (93% of the country is actually rural and owned by a vanishingly small number of very rich people, for example over 3% of the UK's land is owned by the Crown Estate)

          - Most of the housing that is being built is not social housing, or even truly 'affordable' housing (the definition of 'affordable' is often made as a percentage to the market price, which is anything but), it is 'luxury' housing - expensive flats that are often sold to rich foreign investors rather than to normal people to live in.

          1. Alan Brown Silver badge

            Re: @DRue2514

            " 'Right to buy', which itself isn't a bad thing, "

            It is when the property is sold at a 90% discount in order to score political points(*) with councils _forced_ to sell property and _prohibited_ from using the income from sales to build new housing stock(**)

            (*) Labour explored right to buy back in the 1950s. The conservatives dusted off the idea but set knock-down prices on the sales (far below replacement costs) as a cheap way of simultaneously buying voters and nobbling labour-dominated councils.

            (**) The restrictions imposed on councils preventing reinvestment in new housing made it utterly clear that the government of the time intended to kill the social housing market - which they have admirably succeeded at. More than a few politicians felt this was the "christian thing to do" as it would force the poor to better themselves (aka "you can only improve through suffering" - and we all know how that worked out in many institutions).

      6. Anonymous Coward
        Anonymous Coward

        Neoliberal Economists must Die!

        An actual book title, but probably not what you were looking for.

    2. MyffyW Silver badge

      Sorry @AC but the idea that socialism alone makes bad monopolies possible is bullshit. Standard Oil seemed to emerge without too much difficulty in the US. Likewise Microsoft's capturing 90-odd percent of the desktop market, or Google cornering the search market.

      1. LDS Silver badge

        "but the idea that socialism alone makes bad monopolies possible is bullshit"

        Not socialism alone, but socialism usually like those big, bad monopolies which are state-owned companies. Then there is that ultra-liberalism which believes big bad monopolies are not bad (as long as you're on their side and earn piles of money from them, of course). Usually both systems ends in the same way - bad products and exploited consumers.

        1. MyffyW Silver badge

          Bad Products

          Thanks @LDS for an even-handed response. I understand your point that state monopolies can be bloody awful (best case: British Rail, worst case: Aeroflot). My argument is that there is nothing in socialism that inherently creates them, whereas they are a recurrent feature in the model of capitalism we have been following since the 18th century.

          1. Anonymous Coward
            Anonymous Coward

            Re: Bad Products

            > state monopolies can be bloody awful ... My argument is that there is nothing in socialism that inherently creates them

            "The workers control the means of production"

            I suppose technically the state could create lots of small workers cooperatives which are managed independently and competing with each other; but for that to work you'd have to accept that the badly-run ones might fail, and that would mean workers losing their jobs, and that wouldn't be acceptable.

            If there are multiple cooperatives which are all managed by the state, then that's the same as having a single large corporation, in all but name.

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