As Uber Prepares to Go Public, Its Lead Lawyer Races to Clean It Up

The concept of a corporation existing solely to maximize profit is a new development coming out of the Chicago school of economics. For most of our legal history, any company that received limited liability was required to consider a broader set of constituents; including shareholders, debt holders, employees and society. Often they were given an explicit charter from the king or the sovereign and were engaged in highly risky behavior that was believed to be extremely socially valuable but which most investors and managers wouldn’t pursue unless they weren’t personally liable.

This is as opposed to a general partnerships, which most businesses were until the 1980s, where the owners were personally responsible for all debts and harm the firm caused. Delaware didn’t even have LLCs until 1991 and corporations were much harder to form.

We don’t have to live in a society where a fundamental structure organizing human activity ignores the well being of many of the core constituencies it interacts with; we write the rules. We could decide that corporations and their officers have to balance their effort maximize value for shareholders, employees, debt holders, their local community and the country. The social contract can be negotiated.

I say this as a start up founder, entrepreneur, and capitalist.

Finally, your argument assumes competition exists to reap the benefits of competition; but monopolies and dualoplies such as Uber/Lyft exist specifically to achieve network effects and the pricing power they allow. That is clearly great for shareholders but inefficient for everyone else. Being a capitalist doesn’t mean being pro business in all its forms. Monopolies are destructive to innovation, wealth distribution, efficiency, and over the long term capital appreciation.

Anyway; No down vote from me.

> How is that “evil”? Isn’t that the crystallization of the teleological purpose of a company?

> The ideal company works to maximize shareholder value. And not just short-term value, but the amortized value of the company in perpuitity....

> The ideal situation is that the company pays employees as little as possible and charges customers as much as possible....

It might be for some people, but I wouldn't say that view is universal. In my view the teleological purpose of a company is to strive to act morally and ethically while providing value to society. I think trying to replace that with a mechanism driven by a map-model is pretty dystopian.

I use Android Pie and the only permissions they require to work is Location and Phone.

> And not just short-term value, but the amortized value of the company in perpuitity.

But this is what they characteristically fail at, or are given strong incentives not to do.

For example, one of the best things a stable, mature company can do is to just keep operating its business, making profits and returning the profits to the shareholders. Then the shareholders can use the money for whatever is most efficient, e.g. investing it in other companies with better growth potential. But the tax laws in the US punish that severely as compared with wasteful empire building or subsidiary shell games that warehouse cash in foreign subsidiaries in lower tax jurisdictions. Returning profits to shareholders gets taxed twice. Hoarding or wastefully/inefficiently spending the money doesn't get taxed at all. So they do the dumb stuff, and Apple holds onto a pile of cash the size of a mountain even though they're not actually doing anything productive with it.

You also have all kinds of problems with time frames. There are many things you can do to a company that will increase quarterly profits, like raising prices on customers that require a long lead time to switch to a competitor. Things like that may increase profits for years as the locked-in customers pay the price for as long as it takes them to transition to another vendor. But then the business starts to implode as the customers gradually all leave, and the same long lead time that kept them from quickly switching away (plus the damage you've done to your reputation) keeps them from quickly switching back. You can see this in, for example, Oracle's share of the database market slowly descending down a cliff.

And in general there are just information problems. Shareholders make decisions based on public information, but there is so much more involved in a company's operations than is described in those statements that it's easy for bad managers to waste or steal resources or otherwise make short-sighted decisions without ever getting held to account, and many incentives for them to do so, particularly when their current bonuses are tied to current-term numbers and not long-term numbers.