Table of Contents
Introduction
Three days ago I wrote about my interview at Uber. I did not think of Uber as a great place to work. People that I’ve met seemed young, smart and overworked to the point of exhaustion. From my conversation with recruiter I took away that Uber had no problem being the lowest bidder and that they preferred to underpay their employees, making up for it with their stock. Since Uber is not a public company and has raised past few rounds at extremely high valuation, I thought it was a bad deal for the employees.
I must admit that my article was mainly an emotional response. After reading Reflecting On One Very, Very Strange Year At Uber by Susan J. Fowler, I wanted to share my story, to hopefully warn others from working for Uber. Until reading Susan’s post, I was concerned to public speak-up against Uber which was the main reason why I waited so long to share my experience.
At the same time I must admit that in addition to my good intentions I was motivated by self interest and wanted to jump on “Uber Hate” bandwagon.
My initial article got a decent amount of attention, with people bringing up some valid counterpoints. All of that got me thinking that as much I would like to see Uber “lose”, there might be some market forces at play that will make Uber win.
Self Interest
My main criticism of Uber is that it’s “bad” for drivers and “bad” for their full time employees. Essentially I think it’s bad for both because they are underpaid and overworked. In my original article I argued that driver happiness is very important to Uber. Some of the people pointed out that driver happiness does not really matter, as long as:
- Uber is able to maintain a large pool of drivers
- Uber’s drivers continue to provide good service
So what would make Uber riders happy? Convenient and affordable rides. Uber, Lyft and other competitors got the convenient part down for the most part. So the low price remains the only differentiating factor.
Aside from my Uber ride to the interview, I have been riding Lyft exclusively due to my personal believes that Lyft is better for the drivers. At the same time I had the Uber app installed on my phone and I would check it to compare the prices. Four out of five times Uber was a dollar or two cheaper. If you factor in the “suggested” tip built into the Lyft app (that I spoke so highly of in my original article), you are looking at a $6 dollar difference for a round trip.
$6 is small enough amount that I am able to convince myself to overspend for a good cause. At the same time I am skeptical that most people would make a similar decision.
Market Share
Uber was the first ride sharing app in most of the US and as a result was able to capture a large portion of the market. A phrase such as “just Uber it” is as common in modern English as “just Google it”.
The market share is why Uber is able to get away with paying their drivers less. Being first to market creates a “more users, more drivers, more users” loop that is really hard for the competitors to break. Driver can’t leave Uber, because they have the biggest volumes of riders. Riders come back to Uber because it has the biggest number of drivers and it’s cheaper.
Building nothing into something takes a lot of work, which could explain Uber’s large workforce of underpaid and overworked engineers, recruiters, and businesses people. It’s also probably why Uber has overlooked so many HR violations. It’s hard to care about diversity and equality when you are elbowing your way to the top.
Diversification
First movers advantage aside, the barrier to entry to compete with Uber’s is fairly low. I believe that is why the company began to diversify its core business, prior to going public.
While I personally never used UberEATS, there was a number of comments on my original article pointing out that it was a great service.
Uber is also very aggressive investing in self-driving technology. While companies like Google are taking a slower and safer approach, Uber is going pedal to the metal. There is a good chance that this strategy will backfire, but there is also a good chance that it will pay off. Imagine if Uber became the first company to bring self driving car to the world.
Smart Engineers
As I’ve mentioned in my original post, most engineers that I met during my interview at Uber appeared to be very smart. My main complaint was that they seemed to be overworked. While this is a bad thing for the engineers, it is a great thing for Uber. Apple, for example, is known for pushing their engineers hard and it has clearly worked out for them.
As long as Uber can continue to recruit quality talent and keep them handcuffed to Uber, their “work harder, faster, and smarter” culture might pay off.
Conclusion
It became popular lately to make Uber look evil. I am as guilty of this as anyone else. As a recent article from the Guardian points out – sex doesn’t sell any more, activism does. And don’t the big brands know it.
Lyft, for example, is doing a great job capitalizing on the current outcry against Uber. I am not confident that the roles would not have been reversed has Lyft, not Uber, been the first to capture the market.
It’s easy to blame Uber for wanting to compete with Walmart and not Taxi services for their drivers. A bigger question, however, is why Walmart and may other businesses are able to get away with paying people so little in the first place? And what is going to happen to these people in 5-10 years when the self driving technology becomes a reality?
In any case, after writing my rant I’ve felt like I was being too hard on Uber and I wanted to follow up with some counterpoints towards my own arguments. Uber clearly has some room for improvement and I sincerely hope that they will learn from their mistakes. At the same time it’s important to recognize that they are being very pragmatic with their business and that their approach might actually win.