Lies, damned lies, and Uber
Uber wants to pay its Toronto drivers $2.50/hour (eh).
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Uber lies about everything, especially money. Oh, and labour. Especially labour. And geometry. Especially geometry! But especially especially money. They constantly lie about money.
Uber are virtuosos of mendacity, but in Toronto, the company has attained a heretofore unseen hat-trick: they told a single lie that is dramatically, materially untruthful about money, labour and geometry! It’s an achievement for the ages.
Here’s how they did it.
For several decades, Toronto has been clobbered by the misrule of a series of far-right, clownish mayors. This was the result of former Ontario Premier Mike Harris’s great gerrymander of 1998, when the city of Toronto was amalgamated with its car-dependent suburbs. This set the tone for the next quarter-century, as these outlying regions — utterly dependent on Toronto for core economic activity and massive subsidies to pay the unsustainable utility and infrastructure bills for sprawling neighborhoods of single-family homes — proceeded to gut the city they relied on.
These “conservative” mayors — the philanderer, the crackhead, the sexual predator — turned the city into a corporate playground, swapping public housing and rent controls for out-of-control real-estate speculation and trading out some of the world’s best transit for total car-dependency. As part of that decay, the city rolled out the red carpet for Uber, allowing the company to put as many unlicensed taxis as they wanted on the city’s streets.
Now, it’s hard to overstate the dire traffic situation in Toronto. Years of neglect and underinvestment in both the roads and the transit system have left both in a state of near collapse and it’s not uncommon for multiple, consecutive main arteries to shut down without notice for weeks, months, or, in a few cases, years. The proliferation of Ubers on the road — driven by desperate people trying to survive the city’s cost-of-living catastrophe — has only exacerbated this problem.
Uber, of course, would dispute this. The company insists — despite all common sense and peer-reviewed research — that adding more cars to the streets alleviates traffic. This is easily disproved: there just isn’t any way to swap buses, streetcars, and subways for cars. The road space needed for all those single-occupancy cars pushes everything further apart, which means we need more cars, which means more roads, which means more distance between things, and so on.
It is an undeniable fact that geometry hates cars. But geometry loathes Uber. Because Ubers have all the problems of single-occupancy vehicles, and then they have the separate problem that they just end up circling idly around the city’s streets, waiting for a rider. The more Ubers there are on the road, the longer each car ends up waiting for a passenger:
Anything that can’t go on forever eventually stops. After years of bumbling-to-sinister municipal rule, Toronto finally reclaimed its political power and voted in a new mayor, Olivia Chow, a progressive of long tenure and great standing (I used to ring doorbells for her when she was campaigning for her city council seat). Mayor Chow announced that she was going to reclaim the city’s prerogative to limit the number of Ubers on the road, ending the period of Uber’s “self-regulation.”
Uber, naturally, lost its shit. The company claims to be more than a (geometrically impossible) provider of convenient transportation for Torontonians, but also a provider of good jobs for working people. And to prove it, the company has promised to pay its drivers “120% of minimum wage.” As I write for Ricochet, that’s a whopper, even by Uber’s standards:
Here’s the thing: Uber is only proposing to pay 120% of the minimum wage while drivers have a passenger in the vehicle. And with the number of vehicles Uber wants on the road, most drivers will be earning nothing most of the time. Factor in that unpaid time, as well as expenses for vehicles, and the average Toronto Uber driver stands to make $2.50 per hour (Canadian):
https://ridefair.ca/wp-content/uploads/2024/02/Legislated-Poverty.pdf
Now, Uber’s told a lot of lies over the years. Right from the start, the company implicitly lied about what it cost to provide an Uber. For its first 12 years, Uber lost $0.41 on every dollar it brought in, lighting tens of billions in investment capital provided by the Saudi royals on fire in an effort to bankrupt rival transportation firms and disinvestment in municipal transit.
Uber then lied to retail investors about the business-case for buying its stock so that the House of Saud and other early investors could unload their stock. Uber claimed that they were on the verge of producing a self-driving car that would allow them to get rid of drivers, zero out their wage bill, and finally turn a profit. The company spent $2.5b on this, making it the most expensive Big Store in the history of cons:
After years, Uber produced a “self-driving car” that could travel one half of one American mile before experiencing a potentially lethal collision. Uber quietly paid another company $400m to take this disaster off its hands:
https://www.economist.com/business/2020/12/10/why-is-uber-selling-its-autonomous-vehicle-division
The self-driving car lie was tied up in another lie — that somehow, automation could triumph over geometry. Robocabs, we were told, would travel in formations so tight that they would finally end the Red Queen’s Race of more cars — more roads — more distance — more cars. That lie wormed its way into the company’s IPO prospectus, which promised retail investors that profitability lay in replacing every journey — by car, cab, bike, bus, tram or train — with an Uber ride:
https://www.reuters.com/article/idUSKCN1RN2SK/
The company has been bleeding out money ever since — though you wouldn’t know it by looking at its investor disclosures. Every quarter, Uber trumpets that it has finally become profitable, and every quarter, Hubert Horan dissects its balance sheets to find the accounting trick the company thought of this time. There was one quarter where Uber declared profitability by marking up the value of stock it held in Uber-like companies in other countries.
How did it get this stock? Well, Uber tried to run a business in those countries and it was such a total disaster that they had to flee the country, selling their business to a failing domestic competitor in exchange for stock in its collapsing business. Naturally, there’s no market for this stock, which, in Uber-land, means you can assign any value you want to it. So that one quarter, Uber just asserted that the stock had shot up in value and voila, profit!
But all of those lies are as nothing to the whopper that Uber is trying to sell to Torontonians by blanketing the city in ads: the lie that by paying drivers $2.50/hour to fill the streets with more single-occupancy cars, they will turn a profit, reduce the city’s traffic, and provide good jobs. Uber says it can vanquish geometry, economics and working poverty with the awesome power of narrative.
In other words, it’s taking Toronto for a bunch of suckers.
If you’d like an essay-formatted version of this post to read or share, here’s a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
https://pluralistic.net/2024/02/29/geometry-hates-uber/#toronto-the-gullible
Image:
Rob Sinclair (modified)
https://commons.wikimedia.org/wiki/File:Night_skyline_of_Toronto_May_2009.jpg
CC BY 2.0
https://creativecommons.org/licenses/by-sa/2.0/deed.en
