Episode 29: What Uber Hath Wrought
[ARCHIVE CLIP, Travis Kalanick: Millions of people die a year in cars. They don’t have to. Tens of millions of people get injured. Trillions of hours are spent sitting behind a wheel holding that steering wheel, stressed out. And we don’t have to have traffic in our cities. You know, that parking infrastructure that’s 15 percent of the land in a city could be given back to the city. And by the way, imagine transportation that’s so inexpensive that everybody could have access to it like running water. That’s what we’re talking about.]
Sarah Goodyear: That’s super visionary, right?
Aaron Naparstek: That was like The War on Cars mission statement.
Doug Gordon: We should get that person on the podcast.
Sarah: That might be hard because that was Travis Kalanick, who is one of the founders of Uber.
Doug: Wow! There’s a twist.
Sarah: Yeah, exactly. And he was actually talking at the World Economic Forum in Davos, you know, the sort of rarefied, rich person get-together in 2016, you know, raising more money for Uber.
Aaron: For more cars.
Doug: So how’d his vision work out?
Sarah: Well, that’s what we’re gonna be talking about in this episode. This is The War on Cars, the podcast about cars and how they ruin cities. I’m Sarah Goodyear, and I’m here with my co-hosts, Doug Gordon and Aaron Naparstek.
Aaron: Hey, how’s it going?
Sarah: So yeah, we’re gonna be talking this time about Uber, about Travis Kalanick, and just sort of more generally about the way that these enormous venture-capital-funded companies have come into our cities and had a lot of really negative effects. How the vision of these founders fixing all the problems in the city gets distorted on the way to the streets.
Aaron: Yeah. And so what happens when big capital and Silicon Valley technology come in and start to disrupt really basic and essential services in our cities like transportation.
Doug: Or, say, the way we work.
Sarah: Or real estate.
Aaron: Or salad?
Sarah: [laughs] Exactly.
Doug: Well, we’ll get to that, I’m sure.
Sarah: Yeah. I mean, it’s all part of this, you know, move fast and break things ethos that’s at the heart of Silicon Valley. And Uber is a great example of a company that has moved really fast and broken a lot of things—including our streets.
Doug: Right. Our transit systems.
Aaron: And it’s like we seem to have this kind of religious devotion to these founders and their companies and, you know, let them disrupt, let them come in and do what they do. But is that really working for us all that well?
Sarah: Right. And our infatuation with people like Travis Kalanick, who isn’t even at Uber anymore, he was forced out. And that was part of an epic power struggle. And that struggle is documented in a new book called Super Pumped: The Battle for Uber, by New York Times technology reporter Mike Isaac. We had the opportunity to talk with him about that book.
Doug: If you haven’t read the book, it’s great. It’s a very breezy, fun read that gets into sort of the ethos behind the company and the drama and power struggle behind it.
Sarah: So we’ll be hearing some of that in a minute. But first, let’s get our own business—which is less lucrative but equally important—out of the way.
Doug: But we are not a multibillion dollar corporation like Uber. We are shoestring.
Aaron: Not yet.
Doug: Not yet. No, not yet. We will soon move fast and break things like car culture. So to help us do that, become a supporter of The War on Cars. Go to TheWaronCars.org, click “Donate,” and starting at just $2 a month, you can get an official War on Cars sticker.
Sarah: Bigger donations will get you more things like buttons or t-shirts, or I think we still have the Cleverhoods, am I right?
Doug: Yes, we have two Cleverhood rain capes to give away to anybody who contributes at the $50 level. We just have two. So that’s it. If you contribute at $50, you get one, the next person, they get the other.
Aaron: And you can contribute the 50 bucks and then delete your Patreon contribution the next month.
Doug: Yeah, it’s a $249 value. You could get it for just $50.
Aaron: Yeah, but we’re hoping you’ll forget and you’ll let that run for a few months.
Doug: Right. Exactly.
Aaron: You know?
Sarah: Okay, so let’s get to the interview with Mike Isaac. In Super Pumped, he tells the origin story of Uber. Actually, the idea didn’t originate with Travis Kalanick. It came from a guy named Garrett Camp, who was a guy who had made some money on startups already. He had a lot of cash, he wanted to party in San Francisco and he was having trouble partying to the full extent that he wanted to because the city’s transportation system sucked.
Aaron: Can I just say, like, and Facebook starts with just like Mark Zuckerberg wants to do, like, “Hot or Not” with, like, girls in his Harvard classes.
Sarah: That’s right.
Aaron: It’s always just like some dude wants to party or meet girls, and thus we have, like, an $80 billion tech company.
Doug: And maybe that contributes to the toxic culture at many of these companies that is outlined in this book, which you should read.
Sarah: Perhaps it does. Anyways, so let’s hear Mike tell the story of how Garrett Camp came up with that. The year was 2009.
Mike Isaac: You really couldn’t rely on getting a cab no matter where you were in the city. And at that time, Garrett Camp, he was living in San Francisco. He had a bunch of disposable incomes since he just sold a startup to eBay for tens of millions of dollars. He just couldn’t get around town at all hours of the night and day, and that was a lot to do with just how the city was laid out. You know, BART—Bay Area Rapid Transit shuts down around midnight. So, like, if you’re a late night owl, you’re not gonna have any luck getting home real quickly. And for Camp, he would call up these cabs, but half the time it was unclear if they would ever even show up to where he was trying to get picked up. So the idea was, you know, he wanted this system that he could make much more reliable and much easier to catch a ride, and that also happened to coincide with the rise of the iPhone, and it ended up clicking.
Aaron: So it sounds like Uber starts with really good intentions. Like, transportation is failing in the city of San Francisco, and these guys have iPhones and they want to get around at night and they’re trying to solve that problem.
Sarah: Yeah, and I think it was a real problem. I lived in San Francisco. It’s hard to get around San Francisco by public transportation.
Doug: Except the thing is that what we forget now with Uber everywhere and Lyft and all of these services, is that it wasn’t regular people sharing rides or using their cars as a taxi, it was geared towards the high-end market. It was black cars and Mercedes for the guys with the tens of billions of dollars.
Aaron: Yeah, people forget the early marketing of Uber was really that just like you’re gonna get your own personal limo driver to take you to the club.
Doug: It wasn’t like, I need to haul my groceries home from the store.
Sarah: Yeah. And for Travis, I think part of the motivation was to find a company where he could really disrupt something enormous. That he had not had the kind of success that he wanted to have, and he saw this as an avenue to have the big win. And for Travis, winning is everything.
Mike Isaac: He would play this game of tennis on the Wii, Nintendo Wii, and one of his friends said he ended up getting the highest score ever just because he was obsessed with beating everyone else’s scores. And, like, he carried that into Uber when he did it too. You know, the idea that it was a winner-take-all market was really important to him, and that meant destroying early competitors like Sidecar or Taxi Magic or Cabulous, or things that were kind of touching on the idea of ride hailing or bringing cars to people using their phones, but didn’t really nail the product experience in a way that Uber did.
Sarah: So you got to kind of admire his drive to win. I mean, we’ve talked about, like, what can we learn from the way that Uber came in and just decided like, “We are gonna win this?”
Aaron: I watched and reported on the New York City taxi industry for years, and it was a terrible industry, terrible industry. Like, the service that it provided to New Yorkers was pretty lousy. Every time you tried to do something new in the taxi business, like bring in electric hybrid cars or credit cards or, you know, some safety feature for cyclists outside the car, you know, the taxi industry would oppose that. It was impossible to change the industry. The people who ran it were scumbags who abused their drivers, you know?
Sarah: Yeah. Oh, and it’s incredibly corrupt.
Aaron: Totally corrupt. So I remember at this early stage of Uber in 2014, when they were coming in to disrupt the taxi industry, I was like, “Yeah, man. Bring it on!”
Doug: And that might be fine. I had a very similar attitude towards this, but they didn’t just stop at disrupting the taxi industry, they disrupted public transportation and congestion on our streets as well.
Sarah: Yeah. And the thing is that inside the company, it wasn’t about how can we make cities better? How can we build a better, more just and efficient taxi system? It was about winning. It was about crushing the competition.
Aaron: Yeah, the venture capitalists who fund these companies are not in it to make cities better.
Sarah: And that played out in the streets.
Mike Isaac: I’ve talked to a lot of people in this city who are just tired of the streets being congested. You know, one of Uber’s biggest stumping points is, “We’re trying to take cars off the road.” But, in fact, they’ve put more cars on the road, at least in some of its busiest cities. And they don’t seem to be really actively trying to find a solution to that, in part because their business depends on people taking as many trips as possible in some of their most best-performing cities.
Doug: So it actually got very bad in San Francisco, right? The traffic congestion in San Francisco went up by 60 percent between 2010 and 2016, and Uber and Lyft were responsible for half of that increase. And now, here in New York, subway ridership went down 2.6 percent over the last year. Bus ridership down almost six percent. And almost all of that is because of car services.
Sarah: So it’s increasing congestion and it’s sucking people out of the transit system.
Doug: Well, because when your bus is stuck behind a row of Ubers and Lyfts, and it’s moving at, you know, four miles an hour, walking speed, basically, the next time you think, “I’m just gonna take an Uber and Lyft.” And it’s a death spiral.
Aaron: You know, there were things that I liked about Uber, like circa 2014, when it was really starting to get big in the city. I thought, you know, okay, this is a service that could make it more possible for people in cities to give up their cars. That if you have a service that makes it feasible to easily catch a car on the street, then maybe you can start to really think about “Hmm, I don’t need to have a car parked all day on the curbside for which I, you know, pay monthly payments, you know, to the auto company, and I pay insurance and I pay gas and I pay maintenance and repairs. I can just catch these Ubers.” And I thought there could have been a scenario where Uber was more part of the solution than part of the problem.
Doug: But I mean, I think that hits to the problem and promise of companies like Uber. I mean, I went to LA, where normally I would have rented a car and had to deal with parking the entire time, and not to mention the insurance and all the ridiculous gas charges that you pay when you use Avis or Hertz.
Aaron: Same. I don’t rent cars in LA anymore.
Doug: I never had to deal with parking, and that freed up so much time and got rid of so much stress. But at the same time, I knew I was supporting terrible companies.
Sarah: Well, and also, I mean, the thing is that it still is a lot of cars. Like, having on-demand cars, the vision of Uber, just like, yes, there’s a car within one minute of you at all times, that means a lot of cars. And so it sounds like it should be great, but part of what happens with all of these tech companies, I think—it certainly happened with Facebook and genocide in Myanmar—is, you know that there are these unintended consequences.
Aaron: A second thing I liked about Uber and thought Uber could be helpful with was the fact that, like, these cars are all wired up together. So every car has an app in it, and every app can theoretically be monitoring the car and the driver. And if your goal is vision zero to, like, reduce traffic injuries and fatalities in the city, what could be better than having every car with an app that can, like, measure when a driver is speeding, measure when a driver is swerving or braking hard or accelerating hard? And not only that but, like, give financial incentives to drivers who drive more safely, and give penalties to drivers who drive unsafe. And, you know, I thought Uber had the potential to be part of this bigger vision zero livable streets effort.
Sarah: But the problem with that is that Uber isn’t going to give that data to the people who can use it in this way that you’re talking about. They want to hold onto that data because it’s proprietary to them, and they are very—even in cities where they’re partnering with transportation agencies, which they are in some suburban places, and it really makes sense the way they’re doing it, and it’s kind of progressive the way they’re doing it, but they insist on holding the data partly to protect the privacy of the people who ride. And then also because they want to have the financial control of it.
Doug: I was gonna say that capitalism and regulation just don’t go hand in hand. That’s the problem.
Aaron: But actually, they don’t need to give up any data to be part of that. I mean, my feeling—and I actually argued this with the Uber policy guys who were pretty into it for a while—was that, you know, this was good for them. Like, their own self-interest was that, you know, drivers would be safer. Drivers would not have crashes with paying customers in the back seat. And, you know, passengers would like having a safe ride, and you could reward drivers for that. So it was like, completely in their own self-interest to do this.
Doug: But the problem is is that Uber didn’t see itself as employing those drivers. Those drivers were independent contractors over which Uber had no control other than when they switched on the app to work and turned it off to go home. So if they own the fleet of cars, maybe they would have that incentive. If the drivers were employees, maybe they would have that incentive because they would be insured under Uber, but they weren’t. It was completely held at arm’s length.
Aaron: That’s right. And I think that’s why that set of ideas, which the policy guys at Uber really liked and would talk about when they came to the vision zero conferences and whatnot, it never actually seemed to make its way up into the executive suite in any meaningful way.
Sarah: The focus of the people in the executive suite on just making more and more money and destroying all of the competition and making sure that they didn’t have any liability in terms of their labor force, all of that contributed to a sort of cascade of negative consequences that I don’t think anyone fully foresaw.
Mike Isaac: One thing that happens in San Francisco where I live, drivers will come to San Francisco from all around California and even beyond California. I’ve met people who’ve come up from Ventura and LA. They drive out from Sacramento because this city is where you can make the most money, essentially, rather than their own smaller suburbs or wherever they’re coming from, where their rides and the fares aren’t going to be as frequent or as high as they would like.
Doug: I mean, that happens here. People drive in from Pennsylvania or southern New Jersey because New York is where the action is, and in a night, you can pick up 20, 30, 100 people and make a decent amount of money, at least probably back then.
Sarah: Yeah, and what’s sad about that is that the places that those people are coming from are the places where Uber and Lyft would probably be the most useful. They’re places with suburban or rural setups where there are still people who don’t want to have their own cars, can’t drive their own cars because of their age or disability, or just because they don’t want to. And those are the places where actually it could have a positive effect. Instead, because of this sort of kill-or-be-killed philosophy that the company was built on, they get sucked into the places that are already really congested.
Aaron: I feel like the symbol for this entire thing—and this is something that you pointed out, Sarah, a while ago, and now I see it everywhere—is the piss bottle. The urban piss bottle. Like, just when you walk up and down the streets, you start to notice, like, Poland Spring water bottles filled with yellow liquid. And that is an unintended consequence of these ride-hailing companies.
Doug: Do we want to explain for our listeners what that is?
Sarah: You had an experience recently, Doug, didn’t you, that illustrates this?
Doug: So I’m training for a marathon, and I was running up Vanderbilt Avenue here in Brooklyn. I ran into a bodega because it was very hot and I was very thirsty. I bought a bottle of Gatorade, chugged it, downed the whole thing in a minute. And I’m walking out of the bodega and this guy is standing by a car, and I hear him say something I couldn’t quite understand. “Pee pee bottle?” Like that. He didn’t speak English. I didn’t understand him. He keeps pointing at the bottle, which I’m about to throw in the garbage. And I suddenly put it together: that’s his car that he’s standing in front of. He wants my bottle because it’s empty so that he can relieve himself because there aren’t places really where drivers can pull over and do that. There aren’t, like, rest stops for Uber drivers, basically. After that moment, I couldn’t unsee the piss bottles that sometimes line our curbs.
Sarah: Yeah. So I mean, that’s really sad. And the piss bottles are really just a symptom of the terrible way that Uber treats its drivers and how disposable they are.
Mike Isaac: One time, Travis, I think on stage at a conference, had said the biggest cost to us is the person in that driver’s seat, basically. Which, you know, kind of shows you how they view labor, how they view the people that drive for them. And eliminating that cost is the ultimate goal, which is to get to driverless cars, which is just I mean, it sort of sets the terms for the relationship between the company and the drivers. It is the ultimate sort of vision for these companies where they can now capture that remaining 30 percent that normally goes to the driver and keep the revenue for themselves.
Doug: What I thought was interesting in the book is that Mike talks about how Travis didn’t refer to drivers as “drivers,” he referred to them as “supply.”
Aaron: That’s incredible.
Doug: And so they were just a commodity to him. So, you know, the more supply there was out there, the more rides were available for people, the more money they made. And then, of course, there are times when Uber would cut rates to induce more rides, and basically Mike describes in a lot of detail how basically Travis had no regard for what that would do to the drivers. Like, that they were overworked, that they had to use piss bottles, there were no rest stops, that they were sleepy, they were just working overnight. And it didn’t matter because they were just supply.
Aaron: And I feel like Travis’s downfall started when a video came out of him berating one of his drivers, an Uber driver, his supply. Do you remember that? Was it like he was driving around Las Vegas or something?
Doug: Yeah, there’s a part in the book that Mike describes where Travis is sitting in the middle of the back seat between these two women, and the driver confronts him and says basically, “You’re making it impossible for me to make a living. You’ve cut rates. I have to drive more. I have to work harder.” And Travis gives this sort of like libertarian, Ayn Rand sort of like, “People want something for nothing.” Just goes off on him. And it certainly did not play well for them.
Sarah: Yeah. But, you know, what’s interesting to me is that, even when the sort of naked greed of someone like Travis is revealed, that we still have this obsession in this country with people like him, people who are able to take a problem like this, throw out a solution, and then just start raking in money at the expense of other people. Like, we seem to have an endless appetite for the cult of this kind of billionaire, even when we see how nasty they are behind the scenes.
Doug: So Mike talks about that a little bit in the book, and he kind of dissects what he calls “founder culture,” or really founder worship. And he says that it grows out of this San Francisco 1960s hippie counterculture, anti-establishment idea, you know, that things aren’t working, society isn’t working, and we need to kind of just break everything up and change it. What he says is this. He says, “Founders saw inefficiencies in city infrastructure, payment systems and living quarters. Using the tools of modern capitalism, they created software companies to improve our lives, while simultaneously wresting power away from lazy elites. The founders became philosopher kings, the rugged individuals who would save society from bureaucratic, unfair and outmoded systems.” So you take this 1960s, like, “Man, you know, we got to just take power away from the government, bring it back to the people,” and you filter it through capitalism and you get Uber.
Aaron: And in a funny way, we’re just tracing the arc of the baby boom generation, I think, you know?
Aaron: Going from this sort of youthful idealism, to showing up at public meetings where you oppose and fight affordable housing and bike lanes.
Sarah: Yeah. And the destructive effects are being felt in our cities right now.
Mike Isaac: If you look at the state of public transit in a lot of cities right now, it’s in really bad shape and, like, pursuing some of this privatized transportation is probably not gonna be positive for it in the long run. But I don’t think people are as attracted to that idea of let’s make government and public transit work for us. It’s more let’s find the next new big thing and support it and ultimately be attracted to that. And I think it’s probably the same reason people fantasize about winning the lottery, right? There’s something about the Horatio Alger rags-to-riches tale that seems very attractive because it means any one of us can do it. But I think you lose something there when that’s your fantasy, versus, like, what are these other things that we could be working on that collectively might make society better?
Aaron: Ah, that’s perfect. It’s so right.
Sarah: Yeah. I mean, it’s just like this whole country has become, like, a nation of lottery ticket buyers, right?
Sarah: And hoping for that magic solution that’s gonna be good for me, and what’s good for me is the only thing I can focus on.
Aaron: I just keep thinking about, like, why can’t we just roll with that? Like, if that’s who we are, if we’re a bunch of, like, capitalist greed-heads, and that’s what our society is based on, can we find a way to make it so that people can make loads of money off of just putting solar panels on everybody’s house, and building wildly expensive bicycle infrastructure in cities? And, you know, like, let’s just give these guys opportunities for corruption and, you know, rent seeking, but with better outcomes for society. There’s got to be someone working on this.
Sarah: Well, are you working on that, Doug? I mean, you know, are we gonna get rich here?
Doug: Yeah, this is the problem, because …
Aaron: Why can’t we do this?
Doug: Because, see, I am working on this. But the problem is that my app is just a photo that comes up on your screen, a notification that says, “Ride your bicycle.” I mean, that’s the problem, right? That most of the solutions that we are looking for to our problems involve consuming less. Like, we’re not gonna solve climate change. Yeah, some company could get really rich installing solar panels, but me not driving, me riding a bicycle to work every day is not gonna make somebody rich. And I think that’s the problem. Our problems are gonna be solved by consuming less, and no venture capitalist is gonna look at me and say, “Yeah, that’s a great idea you got there. Just let everybody ride a bike if they choose.” There’s no $70-billion valuation right there.
Aaron: I do think that, like, our kids and grandkids are gonna look back at this era as just like this sort of shocking misallocation of capital, of our resources. It’s just like, “Wait, you guys were putting $80 billion into, like, an app so that people could, like, catch a black car in cities? And, like, you filled your cities with cars? You know, you guys put, like, $20 billion into Sweetgreen, a salad company and Airbnb, like, you know, a home sharing swapping thing? Like, what were you guys thinking? Like, the planet was freaking, like, burning to a crisp, and that’s where you put your capital?”
Sarah: And, you know, it’s like a collective mirage that we’re all chasing. And the people who are succeeding in this society right now are the people who can create that mirage, who can live in their minds inside that mirage to the extent that they convince other people to follow them and pay them along the way.
Mike Isaac: I think all founders to some degree have to have some sort of self-delusion. I think some of them are more self-aware than others, but partially this is probably by design. Like, you have to have these crazy, lofty ambitions in order to create a company that will succeed in the face of pretty bad odds. But at the same time, like, these guys start believing their own BS, and I think the limits of that are pretty clear, you know? Like, you just sort of have to come back down to reality at some point and be honest with what you’re doing and how you’re doing it, you know? And “Don’t be evil” or “Move fast and break things” have suddenly reached a limit to how good they can be for the world.
Aaron: Oh, that’s perfect. It’s so right.
Doug: I mean, I think that’s the interesting thing, right? These guys all have these—and it’s almost always guys, I guess, except for Elizabeth Holmes of Theranos, right? They have this messianic vision of saving the world, of changing and solving problems. But there’s a reason why most car services were like a guy with a CB radio and a couple of phone lines calling three people who own cars. And they’re not valued at billions of dollars. And so I think a lot of these companies now are coming up against, like, we’ve moved out of the “Ooh, shiny!” phase of, like, the iPhone is new and apps are new, and it’s just coming against the reality of the economy.
Sarah: Right. And then there are a lot of other realities coming into play. There’s climate change. There’s just a sense that the drive to consume more, consume, consume, consume, is actually what’s killing us. And I think that some younger people are waking up to that, and that maybe this phase of delusion is wrapping up and coming to a close.
Aaron: So much of this seems to be about just how we allocate capital and money in our society right now. And the fact that we have essentially moved from a place where government has money and it’s directed collectively by all of us, to a place where money is now held in the hands of these venture capitalists, in private hands. And those guys are essentially functioning like governments.
Doug: Well, it’s certainly true if Facebook controls free speech and the flow of information. Uber, Lyft, companies like it control transportation. And not only are they functioning like governments, but governments are looking to them to solve their problems. So then you have the mayor of Chicago and mayors of other cities calling Elon Musk and asking for a hyperloop, or tech companies every six months reinventing the bus, only in a worse and more expensive way.
Aaron: Or Andrew Cuomo, the governor of New York, saying like, “Hey, we don’t need to solve the transit system. We’re just gonna wait for, you know, driverless cars to come and fix it for us.”
Sarah: Yeah. I mean, I think that it’s this abdication of a collective responsibility to make society better. It seems increasingly people are saying, “Okay, I’m gonna align myself with the big, rich man and hope that when he’s crushing other people, I’m riding on his back instead of under his feet.” And that’s the way that we’re hoping to survive. And I think a lot of people are just thinking in terms of raw survival at this point, and it seems like going with the strongman is a good bet instead of, you know, trying to have collective action. And I think that’s another reason that we need the war on cars. Cars are what create the social isolation that has fostered this disillusionment with the public realm and collective action. And I think cars are dividing us from each other. And cars are like little microcosms of strongmen driving around in the world and crushing things.
Doug: And I think that’s it, because cars are the original “Move fast and break things.” They literally move fast and break things.
Aaron: That’s it for this episode of The War on Cars. Thank you so much for listening. Please remember to rate and review us on Apple Podcasts or wherever you get your podcasts. It really helps. You can write to us with your comments, your questions, your suggestions at TheWaronCars(at)gmail.com.
Doug: We’d like to thank our top sponsors, including Charley Gee of Human Powered Law in Portland, Oregon, the law office of Vaccaro and White in New York City. Huck and Elizabeth Finne, Lee H. Herman Jr., Timothy Buck and Drew Raines.
Sarah: This episode was directed and recorded by Josh Wilcox at Brooklyn Podcasting Studios. It was edited by Matt Cutler. Natalie Jones recorded Mike Isaac in San Francisco for us. Thank you so much, Mike, for taking the time to talk with us.
Doug: Be sure to check out Mike’s book Super Pumped: The Battle for Uber. I guess you could get it at Amazon, but that would just line the pockets of another tech billionaire, so maybe go to your local bookstore or your library.
Aaron: Our theme music is by Nathaniel Goodyear. Our logo is by Dani Finkel of Crucial D. Designs. I am Aaron Naparstek.
Sarah: I’m Sarah Goodyear.
Doug: I’m Doug Gordon. And this is The War on Cars.