Driving Miss Crazy

Like anybody, I too am always delighted when my analysis is on the mark.

Let me explain.

A few days ago, in responding to a comment at this post, I wrote:

First, the equation of decreasing car sales with loss of employment. I would rather interpret this way: The hundreds of thousands (or lakhs) of rupees that would have been spent on cars will now be spent on other things, which will generate employment. The "loss" is primarily for those who invested in automobile manufacturing. I have no sympathies for those big investors, who know all too well about the market and profit and loss.
Second, some of us have been hypothesizing that in highly densely populated cities--which is all of India--the cost of car ownership is immense. Car sharing, which has been made possible by the likes of Uber and Ola and others, makes it possible for the upper-middle class to move around in cars without owning them.

As much as I don't care for the likes of Uber, those services are here to stay and will continue to grow.  Therefore, betting on the auto industry to sell more vehicles to a younger generation doesn't seem wise to me.  While I am no investment guru, I interact a lot with young people, and read commentaries, based on which even three years ago I wrote that teenagers perhaps don't dream of cars anymore.

Today, I read in the news that the finance minister of India is blaming millennials and services like Uber for the massive slump in the auto industry in my old country!

To which I have only one response:
Ha ha ha ha ha ha ha ha!

Source

The minister made this comment in Chennai for a good reason--it is the Detroit of India, where the auto industry is huge.  But, it is remarkably stupid for a finance minister to blame young people for not buying automobiles.  Seriously?  Is the government now going to mandate that thirty-somethings buy cars, or else?  Next they will frame it as a patriotic duty to buy cars?  Like how my President here tweets and talks about "Patriot Farmers" who are being screwed by his trade wars?

A year ago, when I was in India, an old high school classmate suggested that I use Uber or Ola.  He, like me, is no millennial.  And is a highly affluent fellow.  Even he regularly uses Uber to get to work, he said--better than hiring a driver, and far better than "self-driving."  Another advantage?  He could talk without distractions while on the road--he was, in fact, in an Uber ride when he made that suggestion to me.

I tell ya, if only people listened to me and my analysis of how the world works! ;)

I am not a socialist, but ...

Some of my colleagues think that I am against their left-leaning (in some cases way out left) politics just because I am not in their dues-paying organization.  If only they read even a couple of posts here at this blog!  Or, better yet, if only they had discussed intellectual ideas with me instead of sending me to exile!

The old commie-teenager in me has never really died, as much as the young man with a whole lot of hair has not disappeared from my idea of who I am.  I continue to rail against terrible money-grabbing practices as I have always done.

What increasingly pisses me off is this: The digital economy roars on for those who have money.  For the rest, it is a crawl at best.

Seven years ago, almost to the very date, I ranted against Facebook's IPO.  I quoted from a Forbes column:

Microsoft when public in 1986, its market value was $780 million. Microsoft’s market value would rise more than 700 times in the next 13 years. Bill Gates made millionaires of thousands of ordinary public investors. When Google went public in 2004 at a $23 billion valuation, it left less on the table for you and me. Still, if you had invested in Google then and held your stock, you would be sitting atop a 9x return. Zuckerberg and his Facebook friends took it all.

Money-making in the contemporary digital economy is less and less democratic.

The latest in this is Uber.  (Full disclosure: I have never had an Uber account, but have been in Uber's services a couple of times.)

A successful I.P.O. for Uber will validate and perpetuate the mega-venture capital model, and all the distortions that it entails.

The author--incidentally, an Indian-American--lays out a case, that is less about Uber itself and more about the big venture capital funders:

The largest of Uber’s major shareholders is SB Cayman 2 Ltd., which holds more than 16 percent of Uber shares. That investment represents the SoftBank Vision Fund, a $100 billion mega-venture capital fund that has fundamentally changed the venture financing world. The fund, whose biggest investors are the crown prince of Saudi Arabia and the founder of Japan’s leading internet company, has been writing enormous checks — ranging from $500 million to $5 billion — to start-ups including WeWork, Lemonade, Wirecard and DoorDash. SoftBank’s presence has inflated deal sizes in the venture capital world, where rounds of financing are typically well below $100 million.

These big money funds are taking us all for an uber-ride!

And, of course, Uber is out to screw its employees, er, drivers.  How?  Remember that bottom-line from the Forbes column seven years ago? "The insider pig pile of PE firms and celebrity Silicon Valley angels took it all."  Here too it is the same:

Uber is unprofitable. In fact, they have not really clearly articulated how they're going to become profitable. They have indicated that they intend to clamp down on worker bonuses and incentives, which they acknowledge will upset drivers. At the same time, it's hard to grow, have more drivers, and replace those who turn over and quit, if you're not competitive. And so now we're in a situation of low unemployment. Wages are rising in other industries, but they're not in ride-share driving. So I think they're caught; they're in a price war with Lyft and others. It's hard to see how they're going to be able to accomplish growth, recruiting enough drivers, and become profitable.
So what this IPO is doing is it's giving the Uber investors the potential to cash out. So they may not have to worry about whether Uber ever becomes profitable if they can convince enough people to just buy the stock.

You want an example ?

Mr. McMullen, 33, is part of an exclusive club: the semiretired tech millennial who left California after getting rich. Like many in this group, he is a newly minted multimillionaire who became wealthy by working for high-profile San Francisco start-ups like Uber and Lyft, which are now about to go or have just gone public. Once their wealth was assured, these tech workers quit the companies and fled California, which has the nation’s highest state income tax, at more than 13 percent, to reside in lower-tax states like Texas and Florida, where there is no personal state income tax.

Screw the drivers!

Uber wants to shift the risk, it wants to shift the cost, onto the driver. The end result is that drivers are denied access to worker compensation in an industry that is very dangerous. They have no unemployment insurance, and they obviously get no health or pension benefits. And they're not subject to the wage and hour laws, or laws overseeing race and gender discrimination. So the algorithms that Uber develops are the bosses.

But then, what do I know; after all, according to many of my colleagues, I am nothing but bourgeois trash!

Teenagers won't dream of cars anymore?

I was perhaps ten years old when my parents--ahem, my father, given that he made most of the budget decisions--decided that the old car would not work with the new sky-high petrol prices.  The family joke is that my younger brother refused to walk, having been spoiled by the car.

The car meant something back then.  I remember Holden Caulfield commenting in The catcher in the rye that people are always dreaming of their next cars--even when they drive out of the dealer in their new car!  And that continues even now.  I seem to make my own stories about people based on the type of cars they drive.  Even the car that I drive has a reputation for the owners being dull, boring, careful, and everything else along those lines.

In the future that is arriving, cars might not mean a damn thing.  Think about the science fiction movies that you may watched.  Not the science fiction of a gazillion years from now, but set in the near-future.  Recall how boring the transport mechanisms are in those movies?  They are boxy and utilitarian. That's it.  There is no art, there is no story, no life about those transport units.

This essay, by a chair-professor at Georgia Institute of Technology, argues that cars will never be sexy again.  With developments like Uber and self-driving cars, "the automotive logic of the 20th century—“cars as luxury, cars as freedom, cars as sex”" has been turned upside down.

cars are becoming leased appliances, made and sold with efficiency to suppliers intent on renting them out for minutes at a time to customers who would rather forget ever having been inside them. Nothing could be less sensual than the boring universe of business-to-business fleet sales—except, maybe, the boring universe of business-to-business fleet-sales component supply.

I suppose the boring future will be another version of Henry Ford's line that any customer can have a car painted any color that he wants so long as it is black.

When that future arrives, there is one thing that I will miss most in this part of the world--the bumper stickers.  Some vehicles have awesome statements in their bumper stickers, including those that I disagree with, of course.  Once I saw one of those huge pick-up trucks with a bumper-sticker with an arrow pointing to the exhaust pipe.  The sticker read "Your Prius can suck on this."  The other day I saw a small car with stickers all over the bumper, the rear frame, and half of the sides as well.  That kind of a personalization won't be there in the future?  It will be a boring future even for this dull and boring guy!

My favorite bumper-sticker had truly my kind of humor.  What was in the sticker?  "I hate bumper stickers!" ;)