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Paying $80k a year in India would get you top level talent. They’d pay less than that. Uber is preparing for a death spiral as their financial backing runs ou

Paying $80k a year in India would get you top level talent. They’d pay less than that. Uber is preparing for a death spiral as their financial backing runs out and they need to shrink to the profitable markets.

toomuchtodo 6y ago
> Uber is preparing for a death spiral as their financial backing runs out and they need to shrink to the profitable markets. Many of their top markets have ruled their drivers are employees (or requiring similar compensation/benefits), except Brazil. I'm unsure if they can remain anywhere near their current size (versus the headcount of a traditional livery service) based on that regulatory environment, even with McKinsey style transformations to their business (ie offshoring). > "But one detail in particular caught my eye. About 24 percent of Uber’s bookings—all the money that customers pay through the app and in cash, including driver earnings—occur in just five cities: New York, Los Angeles, San Francisco, London, and São Paulo." [1] London: https://www.theguardian.com/technology/2018/dec/19/uber-loses-appeal-over-driver-employment-rights https://www.theguardian.com/technology/2018/dec/19/uber-lose... ("Uber loses appeal over driver employment rights") France: https://www.reuters.com/article/us-uber-court/top-french-court-deals-blow-to-uber-by-giving-driver-employee-status-idUSKBN20R23F https://www.reuters.com/article/us-uber-court/top-french-cou... ("Top French court deals blow to Uber by giving driver 'employee' status") California: https://finance.yahoo.com/news/california-regulator-uber-lyft-drivers-employees-044824014.html https://finance.yahoo.com/news/california-regulator-uber-lyf... ("Uber, Lyft drivers are employees according to California regulator") New Jersey: https://www.nytimes.com/2019/11/14/nyregion/uber-new-jersey-drivers.html https://www.nytimes.com/2019/11/14/nyregion/uber-new-jersey-... ("New Jersey has demanded that Uber pay $649 million for years of unpaid employment taxes for its drivers, arguing that the ride-hailing company has misclassified the workers as independent contractors and not as employees.") New York: https://www.nytimes.com/2018/07/02/nyregion/uber-drivers-pay-nyc.html https://www.nytimes.com/2018/07/02/nyregion/uber-drivers-pay... ("New York City regulators are moving toward significantly raising wages for drivers for Uber and other ride-hailing apps.") [1] https://slate.com/business/2019/04/uber-ipo-nyc-london-risks.html https://slate.com/business/2019/04/uber-ipo-nyc-london-risks...
- eldavido 6y ago
  Unintended side effect of this is to prevent competitive entry. No other TNC will be able to achieve enough density from day 1 to run at the wage floor without huge amounts of VC. That alone should make people suspicious of this legislation. In the long run, this is really, really good for Uber/Lyft.
  - Jommi 6y ago
    Yes, its basically a potential way for uber and lyft to lock themselves in as the only 2 players in the US market.
chanakya 6y ago
The numbers $300K and $80K are roughly accurate. Yes, you can get engineers in India for $5K or even less, but you don't want them working on your product. Senior, architect-level talented engineers may well cost $80K. And yes, if you want to hire the same capability engineer in Silicon Valley, they will likely cost $300K.
greesil 6y ago
Nitpicking a bit, it's not a death spiral if they don't die in the end.
- godzillabrennus 6y ago
  Contemplated changing that wording before posting but decided that it’s a bit of a ship of Theseus thought exercise. If Uber radically shifts its focus to focus solely on smaller profitable markets and the people working there are swapped out then has the company ultimately failed/died and had to be reborn? It may not be a General Magic style death but it seemed reasonable to me that at least philosophically it is a death spiral nonetheless.

toomuchtodo 6y ago

> Uber is preparing for a death spiral as their financial backing runs out and they need to shrink to the profitable markets. Many of their top markets have ruled their drivers are employees (or requiring similar compensation/benefits), except Brazil. I'm unsure if they can remain anywhere near their current size (versus the headcount of a traditional livery service) based on that regulatory environment, even with McKinsey style transformations to their business (ie offshoring). > "But one detail in particular caught my eye. About 24 percent of Uber’s bookings—all the money that customers pay through the app and in cash, including driver earnings—occur in just five cities: New York, Los Angeles, San Francisco, London, and São Paulo." [1] London: https://www.theguardian.com/technology/2018/dec/19/uber-loses-appeal-over-driver-employment-rights https://www.theguardian.com/technology/2018/dec/19/uber-lose... ("Uber loses appeal over driver employment rights") France: https://www.reuters.com/article/us-uber-court/top-french-court-deals-blow-to-uber-by-giving-driver-employee-status-idUSKBN20R23F https://www.reuters.com/article/us-uber-court/top-french-cou... ("Top French court deals blow to Uber by giving driver 'employee' status") California: https://finance.yahoo.com/news/california-regulator-uber-lyft-drivers-employees-044824014.html https://finance.yahoo.com/news/california-regulator-uber-lyf... ("Uber, Lyft drivers are employees according to California regulator") New Jersey: https://www.nytimes.com/2019/11/14/nyregion/uber-new-jersey-drivers.html https://www.nytimes.com/2019/11/14/nyregion/uber-new-jersey-... ("New Jersey has demanded that Uber pay $649 million for years of unpaid employment taxes for its drivers, arguing that the ride-hailing company has misclassified the workers as independent contractors and not as employees.") New York: https://www.nytimes.com/2018/07/02/nyregion/uber-drivers-pay-nyc.html https://www.nytimes.com/2018/07/02/nyregion/uber-drivers-pay... ("New York City regulators are moving toward significantly raising wages for drivers for Uber and other ride-hailing apps.") [1] https://slate.com/business/2019/04/uber-ipo-nyc-london-risks.html https://slate.com/business/2019/04/uber-ipo-nyc-london-risks...

eldavido 6y ago
Unintended side effect of this is to prevent competitive entry. No other TNC will be able to achieve enough density from day 1 to run at the wage floor without huge amounts of VC. That alone should make people suspicious of this legislation. In the long run, this is really, really good for Uber/Lyft.
- Jommi 6y ago
  Yes, its basically a potential way for uber and lyft to lock themselves in as the only 2 players in the US market.

chanakya 6y ago

The numbers $300K and $80K are roughly accurate. Yes, you can get engineers in India for $5K or even less, but you don't want them working on your product. Senior, architect-level talented engineers may well cost $80K. And yes, if you want to hire the same capability engineer in Silicon Valley, they will likely cost $300K.

greesil 6y ago

Nitpicking a bit, it's not a death spiral if they don't die in the end.

godzillabrennus 6y ago
Contemplated changing that wording before posting but decided that it’s a bit of a ship of Theseus thought exercise. If Uber radically shifts its focus to focus solely on smaller profitable markets and the people working there are swapped out then has the company ultimately failed/died and had to be reborn? It may not be a General Magic style death but it seemed reasonable to me that at least philosophically it is a death spiral nonetheless.