Preetika Rana, reporting for The Wall Street Journal back on May 19 (Apple News+):
Uber Technologies Inc. is cutting several thousand additional
jobs, closing more than three dozen offices and re-evaluating big
bets in areas ranging from freight to self-driving technology as
Chief Executive Dara Khosrowshahi attempts to steer the
ride-hailing giant through the coronavirus pandemic.
Mr. Khosrowshahi announced the plans in an email to staff Monday,
less than two weeks after the company said it would eliminate
about 3,700 jobs and planned to save more than $1 billion in fixed
costs. Monday’s decision to close 45 offices and lay off some
3,000 more people means Uber is shedding roughly a quarter of its
workforce in under a month’s time. Drivers aren’t classified as
employees, so they aren’t included.
Why does Uber even have 45 offices to close, and so many employees to lay off? What exactly were the ~7,000 people they’ve laid off so far doing? Last I heard, Uber had 400 iOS engineers. Just iOS. I get it that some of that work isn’t visible just by looking at the Uber app on your iPhone, because there’s a lot of unseen work that goes into making an app like Uber work worldwide. I don’t know what the right number of iOS engineers at Uber is, but I do know that 400 is bananas. Too many cooks spoil the stew; 400 cooks don’t even fit in a kitchen.
It’s like trying to build a better engineering team by buying 1,000 copies of Fred Brooks’s The Mythical Man-Month and never once reading it.
The basic idea behind Uber is both sound and genius: smartphones made possible a revolution in ride hailing. But ride hailing is inherently a low-margin business. Companies like Uber and Lyft can make ride hailing better for everyone — drivers and passengers alike — but there’s nothing they can do to change the fact that it’s by definition a low-margin business and always will be.
The best treatise I’ve read on this whole aspect of our society is Matt Stoller’s “counterfeit capitalism”, which I linked to back in September.* Just read that, or read it again. It succinctly captures something very important.
* Yes, the same Matt Stoller with whom I disagreed vociferously regarding his argument that Apple and Google are “exercising sovereign power” with their refusal to allow local health agencies to automatically collect privacy-invasive data from our phones. Stoller is a great writer and thinker, and it’s the sign of an adult mind that you can civilly disagree with someone whom you usually agree with. (And vice versa: a rational adult can agree with someone they usually disagree with.)
★ Thursday, 28 May 2020