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Annual note to self: most of the world exists outside the tech bubble

steveblank.com

311–320 of 379 posts

Re: Annual note to self: most of the world exists outside the tech bubble

#311

Working class people are being subjected to ultra efficient hypercapitalism, as in Uber drivers discovering they worked for free when they need to purchase a new car. Meanwhile Wall Street has been bailed out 2 times in the last 15 years alone with monetary policy. How many people went to jail? (And they haven’t learned a thing, on the contrary and quite spectacularly so.) If you want to know where the tech bubble co…

It's interesting that you identify ultra efficient hyper capitalism as the problem, then point the finger at Wall Street traders betting on mortgage backed securities. They really have nothing to do with each other. To the extent you can blame anyone for ultra efficient hyper capitalism, blame programmers. It's programmers that allowed Uber to turn the inefficient and leisurely taxi industry into the Uber/Lyft rat ra…

When taxis were first introduced, there were no regulations on them. There was no training for taxi drivers, there was no guarantee your driver wouldn't scam you, or that they were even experienced drivers. There was no need for them to have insurance, so if your dubious-trustworthiness driver got in a crash in their unmaintained car, with you in it, who cares if you got hurt?

After people had enough of the unregulated/bootleg taxi industry, government introduced regulations - insurance, training requirements, maintenance, which all drove up the cost of taxi service, of course. In a reputation-free unregulated market, corner-cutting is a great profit-optimization solution, but people generally don't want to bear the cost of systems that cheat them, or expose them to sky's-the-limit risk, so that plenty of drivers gambled with their customers' lives by not wasting time on silly things like repairs, insurance, a license. Unregulated taxi service harmed a lot of people. So there is a lot to consider about Uber being an unregulated equivalent, particularly as related to its profitability.

Uber doesn't profit because the preexisting taxi system was bloated with waste or laziness. Uber's business model works by providing consumers with amateur service, and driving down workers' compensation with particularly precarious contracts. They offload the cost of fleet maintenance and even fuel to their contractors. On top of it all, their funding goes not towards enhancing their quality standard of service, but towards sabotaging self-sustaining, "skin-in-the-game" established taxi services to lower their quality by having to cutting their prices, compared to Uber's predatory pricing. It's not about having a trillion dollar, Millenium Prize-worthy, NP-hard route optimization algorithm that cabbies could never comprehend. It's not about how a ~sharing economy~ shatters the paradigm by revealing new low-hanging fruit improvements to maximizing the flow of queued operations.

At a basic level, people give the same parameters to Uber they would for a cab: start location, end location, pickup time, and payment. Nowadays Uber drivers and taxi drivers alike both use the same GPS apps to plan routes on the fly. The automated aspect of Uber's taxi service is mostly the means through which the customer is interacted with -- app textbox UI elements versus phone message, billing to credit card via the internet vs a point-of-sale terminal, drivers turning down potential customers at their discretion via app or in-person.. -- and not so much "how the sausage is made" behind the scenes.

The secret to Uber's money? It's about spending as little as possible as it takes to make contractors pay out of pocket for the costliest parts of the business -- sustaining contractors and the resources required for driving others around -- while at the same time getting the contractors to provide the business's lifeblood and value themselves at a fraction of what it's worth. Presented as a "side-hustle", Uber pitches you the idea that you should accept low wages (and no benefits) for an exclusive chance to buy into a gamified battle royale, for scraps, in Uber's proprietary arena. Drivers are at the mercy of a stringently unforgiving rating system, where one single four star review takes twenty five star reviews to repair the damage done to their reputation. And if they do slip under four stars, they get suspended. Oh, and did I mention that all the while they bear the cost of upkeep, fuel, etc.?

Uber doesn't prioritize allocation of profits, ad infinitum, into more programmers; it would never make money that way! The programmers at Uber are no more responsible for the profit-creating decisions in the unregulated grey area it relies upon than the engineers who built the first factories were responsible for the decisions made by factory owners. "Child labor costs less" and "if you won't work 12 hour shifts someone else will" were both common justifications for ways corporations benefited from abject conditions to the detriment of society. Today still it is common for capitalists to publicly laud democracy as their most cherished ideal of managing the nation, while simultaneously enforcing policies that deny contributing workers from contributing to decisions about their contributions at all.

Offloading unavoidable costs as externalities paid for by someone else (specifically, Uber contractors) is the number one capitalist strategy for increasing profit, and really has nothing to do with Uber's technology or programmers at all - it's not like the programmers can create new technology that reduces further how much they pay their drivers without going below the operational costs for retaining their an employee-supplied fleet, or technology that can take more money from customers' hands than they pay for. At best, the centralized system they have interferes little with individual transactions, encourages carpooling, and updates driver availability in realtime (while collecting a lot of valuable consumer patterns, of course). At worst, it penalizes drivers for simple gestures such as giving a customer a couple of minutes to use the restroom, instructing the driver to move on to the next customer. Uber also used to do fake ride DoS attacks against Lyft, by requesting rides from remote locations before canceling them half-way there.

Uber is efficient in a way that BF Skinner and Eddie Bernays might approve of, but would to many others just look like not remembering the lessons of history. Uber is but an old scam with a new face. I can't see their existence continuing for more than, say, two years without serious revamping - afaik they aren't even profitable yet in the first place, they just live off borrowed money atm.

And ditto re: worker abuse for Wal-Mart and Amazon, and ditto re: anti-competitive salted earth policy tendencies towards smaller players. The engineering programmers don't even participate in the decisions to move around cost burdens in business strategies - the closest they get to calling the shots on spending, is when they're coding the revised implementation of whatever sleek new approach upper management wants ready to present at next year's shareholder's meeting. Better make 'em look good!

  [ninja-edit: eeeek! apologies for the W-o-T]

Re: Annual note to self: most of the world exists outside the tech bubble

#312

Earlier quoted context omitted.

The 1% for the most part aren't billionaires. Last year in the US, the threshold was just under $285,000. Ignoring professionals, plenty of small business owners can hit that on a lucky year. (And get hammered other years). There are a lot of jobs in the US with companies with fewer than 50 people. Confiscating the assets of the 1% to create economic prosperity has been tried a few times before, and usually turns out…

As much as I like the idea of wealth redistribution I have the same doubts it will work. A similar phenomenon happened in South Africa when it was tried. The initial wealth distribution worked okay but it got rid of owners that knew how to run a business and replaced them with corrupt politicians. As much as many of the 1% don't deserve it... A lot of them have that much money for a reason. The ones I knew, the "new…

> A lot of them are on permanent vacation now but if all of us had that much brains, charm, and grit it would be a lot easier to get rich.

Don't forget that sometimes luck is a big part of the reason why some of those people are successful.

Re: Annual note to self: most of the world exists outside the tech bubble

#313
post #301

Earlier quoted context omitted.

major other than computer science or engineering The unemployment rate for CS grads in the UK is 10%, one of the highest. It's been up as high as 13% in recent years. The skills shortage is a complete myth designed to lower wages by inflating supply.

Just tossing this out there, but do you think it might be marginally possible that not all CS grads are created equal and that on a bell curve, 10% is really not an insane amount to be the left-hand-side tail?

Wouldn't that be the same for all majors? Why are CS grads less employed that graduates in agriculture or civil engineering or even philosophy?

Because there's a glut of them.

Re: Annual note to self: most of the world exists outside the tech bubble

#314
post #232

Earlier quoted context omitted.

You speak as if customers do not also enjoy lower prices, faster delivery, lower fares, wider choices, etc. All this is also enabled by the very same platforms.

I didn't say otherwise. I like paying $10 for an Uber ride from someone scared I'll give them a bad rating, instead $15 from a surly, unaccountable cab driver. I'm just pointing out that if you think that's a problem, blame the people responsible for it.

Really? I much prefer the cab. I'll always take honest surliness over false suckuppery. Especially when most of the time what I actually get is honest friendliness.

Re: Annual note to self: most of the world exists outside the tech bubble

#315

Earlier quoted context omitted.

The root of the problem is the idea that you must be productively employed. It's a fallacy, and everything else that follows from it (like this notion that optimizations are bad because they result in fewer skilled jobs) are wrong for the same reasons. Unfortunately, it's a fallacy with very strong social support. Including, ironically, these very people who are hurt most by it.

It might be a fallacy for you or I but there are some people who really struggle without the structure of a job in their lives.

And there are some people who can't cope with the structure of a job. both need to be dealt with - there are always structured jobs that can be done, volunteering at a museum for example.

Doesn't change the fact that if we can automate a job, espeicially if we can improve things at the same time, that's good.

We used to spend 90% of our energy growing enough food for our family to eat. This is far less now, and that allows us to devote more time to other pursuits. That's a good thing for mankind, as is automating any job.

If you don't think replacing people with robots is good, I assume you're against things like ansible, or kickstart, or computers in general.

Re: Annual note to self: most of the world exists outside the tech bubble

#316

Earlier quoted context omitted.

The whole credit card system in US is made to rip off "stupid" people, extremely so. Nobody writes about that, probably because everyone from US thinks it's normal, and nobody from the rest of the world knows about it. But that system is made to screw all the people who are not good at personal finances.

Maybe. Or maybe (many) poor people are acting rationally given their economic circumstances. See ["Reframing the Debate about Payday Lending"]( http://libertystreeteconomics.newyorkfed.org/2015/10/reframi... ) (a pop summary of ["Interest rate caps and implicit collusion: the case of payday lending"]( http://www.inderscience.com/info/inarticle.php?artid=58089 ), DeYoung & Phillips), or other articles linked [this epi…

> It's less obvious to me that this is because the poor aren't good at personal finances

Yeah, I'm not sure "good at" is the right framing. It's an arms race between asymmetric competitors. When exploiters have much more time and money to hone their exploitation, I don't think the problem is really with the exploited person.

Re: Annual note to self: most of the world exists outside the tech bubble

#317
post #309

Earlier quoted context omitted.

It doesn't really need to. That tremendous increase in supply would push wages to minimum wage. When devs are making minimum wage, they won't be in the bubble anymore.

Depends, of course, how fast demand grows.

If it grows like that, that simply means the answer to the parent's question is yes.

Re: Annual note to self: most of the world exists outside the tech bubble

#319
post #105

Earlier quoted context omitted.

The root cause of most American problems is poor public education. We're still over-emphasizing passing grades over effectively growing new American citizens... Personal finance is rarely offered and never mandatory, yet we collectively bare the burden of financial ignorance. The same applies to other subjects like statistics or civics.

>We're still over-emphasizing passing grades over effectively growing new American citizens... 2/3rds of state legislatures are actively hostile to basic tenets of science, let alone the government teaching "effective American citizenship". We just recently legalized malpractice for financial advisors. The rules preventing them from screwing their clients out of their retirement savings were spun as hurting consumer…

> We just recently legalized malpractice for financial advisors.

Do you have reference?

Re: Annual note to self: most of the world exists outside the tech bubble

#320

Working class people are being subjected to ultra efficient hypercapitalism, as in Uber drivers discovering they worked for free when they need to purchase a new car. Meanwhile Wall Street has been bailed out 2 times in the last 15 years alone with monetary policy. How many people went to jail? (And they haven’t learned a thing, on the contrary and quite spectacularly so.) If you want to know where the tech bubble co…

It's interesting that you identify ultra efficient hyper capitalism as the problem, then point the finger at Wall Street traders betting on mortgage backed securities. They really have nothing to do with each other. To the extent you can blame anyone for ultra efficient hyper capitalism, blame programmers. It's programmers that allowed Uber to turn the inefficient and leisurely taxi industry into the Uber/Lyft rat ra…

Would you blame the steelworker for forging the chains that bind the slaves or would you blame the system that gave rise to slavery in the first place. Having said that, without willing participants the chains don't get forged. Problem is, if you don't someone else will and then they have a half-decent paying job and you don't.
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