Related, but Uber is said to be hiring 2,00 for it's new Chicago office next year [1]. A mix of engineering and operations. My understanding this would be under their freight team, which according to this Techcrunch article, was unaffected by this layoff.
What horrendous software quality? Uber consistently puts out some of the cleanest mobile experiences for a mass market app, and their research teams put out great OSS work.
Have you tried to use the Android app? I have programmed Android for five years and I can confidently say that the Uber Android app is a disaster. Both usability and bugs.
On the database side, there's a place in my city that has some permanent bad data in the db so that it won't allow anyone to get picked up or taken there. I go there frequently by Uber and have to set the pin a few blocks away from the corrupted area then explain to the driver where I am or where I am going. It's like there's a ghost car attached to that place because every time I try to get a ride from there, it says it's finding me a ride, followed by an error message that the driver is unavailable. Had a painful back-and-forth with support about this and of course nothing every got done.
While the Android app is of poor quality and no one is rushing to fix it, Uber engineers are busy putting out open source software and plenty of it. Talk about resource mismanagement!
For several months, Uber tells the driver my house is on the other side of the street. Verified that Google Maps, Apple Maps, and OSM all have my house on the correct side.
Maybe they did? If you are an engineer in San Francisco, switching companies is trivial compared to relocating your life across the country to a place where you may not want to live.
Logistics is a pretty mature industry as far as earning a sustainable profit goes. It would make sense they would be unaffected compared to their typical taxi type service.
They also recently announced plans to hire 3,000+ in Dallas [1] at a brand new massive office. I'm sure the hiring and layoffs are from different business units, but it does seem strange that there's been multiple several-hundred-people-layoff stories form Uber recently at the same time they're announcing otherwise massive hiring expansion. I would at least figure that they would prefer to transfer engineers between units rather than to layoff and hire anew.
Maybe some of them were given an option, but they didn't want to move locations; so they just decided it's better to pay them severance while they look for other work? /guess
Interesting if this is a way to get out from under crushing Bay Area tech salaries.
I still see zero reason a company like Uber should be based in San Francisco. We landed a man on the moon with parts built all over the United States, so it's not "that's where the talent is".
> I still see zero reason a company like Uber should be based in San Francisco. We landed a man on the moon with parts built all over the United States, so it's not "that's where the talent is".
It's exceptionally difficult to get investment money if a tech company isn't located in the Bay Area or Seattle.
PA would be the absolute worst place in the world for a low margin business to expand into. I really have no clue how they arrived at such a conclusion. I can only imagine, it had something to do with investors.
I really take all this "will hire xx people in y location" with a grain of salt. This is all marketing speak intended for the tax handout. I don't really believe they will hire that many people if their business tanks
The difference is that this isn't some company with an existing footprint in a city saying "hey we're gonna hire some more people for our office here". In both the case of Chicago and especially Dallas, Uber is making significant real estate commitments to go along with these hiring plans. You don't buy up an entire skyscraper office building (and several plots of land around it) and open an entirely new office unless you're either 1) actually planning on filling it or 2) in such dire straits that you're willing to do really whacky shit to make people think you are planning on filling it.
With Uber, it could be either one, but I certainly don't think it's just run-of-the-mill 'marketing speak'.
I don't believe Uber is buying a building, rather leasing out space, which can always be re-negotiated. There have many examples of companies promising a certain number of jobs and never fulfilling them, because who is looking. For example, Foxcon. Also, Uber once committed to build a HQ in Oakland and signed a huge lease. Soon after, they abandoned that plan and started building a brand new HQ in SF
The current deal that I've read for Uber's Dallas expansion is that they currently are leasing about 1/3rd of a brand new skyscraper that was just built, have plans to lease 90% of a brand new skyscraper that is currently being built, and also outright purchased several plots of land where they are planning on building office building that they will own.
edit: After reading a few different articles it seems like every article says a different story about how much space Uber is committing to, so maybe you're right, it does sound a little wishy-washy.
There's definitely a tightening of capital happening right now. Investors are pulling back as fear of recession grows.
EDIT: Did I say I believe there's a recession coming? No. I said (accurately) that there are growing FEARS of one. There's definitely tightening of investments and capital happening.
They run on investments (still haven't made a profit). If investors get shy (due to fear of recessions) then they have to cut back the pipe, and uber is forced to layoff.
435 people, especially engineers, is no small sum of money.
I mean there's also the fact that California has pending legislation that seems ready to pass that will kick Uber (and others in the gig economy space) right in the wallet. Next 2 years should be interesting as we see what effect that has on things.
What's funny is that if they were employees then uber would be a lot harder to compete with. As it is now uber drivers will use several apps and often recommend competitors to customers, which they're entitled to do as private contractors.
Uber is publicly traded, they can no longer do funding rounds as they always have. That is more likely a reason for layoffs than uber fearing investors fearing recession. If anything it's a signal that the company is publicly traded, not recession fears.
Not really at the early stages from what I can tell. There is definitely a correction happening in late stage pre-IPO and recent-IPO companies. In part because everyone is realizing that SoftBank are actually the dumb guys in the room, when the prior common view was that they were the smart money. A lot of these crazy valuations (Uber, WeWork, Slack, etc) that are getting cut were set by them.
This is a bold move for sure. It sounds like they might have hired the wrong people so instead of "redeploying" them they just cut pretty deeply. Definitely unfortunate for the employees but also impressive that Uber had the guts to do this. I've seen companies let dead weight hang on for too long. The fact that they are still hiring makes me think that this was not a panic move to address Wall Street.
It seems like technology plays a role in these paradigm shifts, perhaps awareness might inspire folks to leverage the workforce in new ways, maybe with technology.
How does this work with layoffs + hiring? Can you layoff and then hire in the same department? I assume companies agree to pay at least unemployment and possible severance too in the case of layoffs. Can a company say "These 80 employees are under preforming" and justify a reduction in force that way? (I guess in at-will employment you don't need to justify it at all, so long as you meet legal unemployment requirements?)
Are they getting rid of under performers and getting new blood or are they cutting people from certain departments (in which case, they could apply to be rehired in another division?)
Like another poster mentioned, up until 2 years ago (?) Uber was handing out very fat compensation packages even to entry level engineers. It's possible these are employees who've been at Uber for 2+ years and are frankly overpaid even if there were no serious performance issues.
My impression is that at a large company it's easier to cut in broad strokes and then hire for specific roles.
Many companies, certainly Uber as well, do smaller force reductions where the employees have ~60 days to find an internal role, after which they're laid off. It sounds like the same thing, but, it allows you to possibly keep the employees.
The article says they're trying to reduce overlapping and redundant work, and restructuring teams in a way such that they intersect less implies they run more efficiently, so they only options at this point are to lay people off or find new projects for them to do. The former makes the most sense considering how little money Uber is making and how their bottom line might increase if they legally become employees (minimum wage, health insurace, threat of unionization, etc)
I've always wondered if uber were to abandon their ongoing development efforts and focus on support and maintenance, would they would actually be profitable? It seems to me they would need a fraction of the tech workers they currently support.
Fact check: R&D spend for three months ending June 2019 was $3.06B. Reported loss for three months ending June 2019 was $5.24B. So, already false.
Now take away the one-time IPO expense of $3.9B, and we're not even close to being true. Further take away the $300M "IPO driver appreciation award" and you end up with a $1B loss for three months ending June 2019. In other words, the quarterly R&D spend is over three times the size of the quarterly loss.
But that IPO stock-comp expense is largely attributable to R&D, so if you want to subtract that from the losses to look at a more cash-focused analysis you have to substract that cost from the R&D side as well.
Of the $3.95B total stock expense, $2.56B was from R&D, which suggests cash cost that quarter was more like $910m (still a lot!)
To my mind this quarter shouldn't be used at all in this kind of discussion since its so messy. e.g.: I take your point, but that $2.56B is the culmination of over ten years of R&D compensation. It's not at all representative of the company's broader financials.
OP's inference that Uber's quarterly loss is more than double Uber's quarterly R&D costs in general shouldn't be propped up by a moment in time observation.
Based on year 2018 numbers, Uber needs to grow their revenue by 9.3%, and reduce their expenses by 6% to book a 0.1B profit. Assuming an average employee expense of 230k per year, Uber letting go 435 puts them 6.66% on the way to profitable expense reduction.
Uber was actively poaching from our team when I was at Edmunds.com a few years ago; hope my ex-teammates that jumped ship are doing alright.
Uber is in a precarious position and I can't help but wonder what would be different if Travis Kalanick were still in charge. I know it might be an unpopular opinion, but I think his leadership and vision were really instrumental to Uber's early success.
From my experience, singing Travis Kalanick's praises (at least on HN) has generally been met with resistance. I remember everyone piling on him about that (what I thought was a relatively innocuous) company retreat memo a few years ago.
There's a big difference between admiring Kalanick as a person, and admitting he created the über startup. (I think) most people on HN realize that questionable ethics are strongly correlated with success.
> Honest question: Who or what was "really instrumental to Uber's early success"?
Using VC funding to bankroll an unprofitable business model, undercutting existing industry players who didn't have multiple billion dollar rocket boosters, mostly. Ignoring laws and other unethical practices no doubt helped.
For non techy startup nerds, it was probably the fact that the Taxi industry was almost universally loathed, expensive, and unreliable.
The on-demand rides industry (Lyft, Uber, et al) managed to not only lower pricing, but also bring Karma (bi-lateral user ratings) to the whole industry so that a driver can't just say "fuck you" to a passenger without consequence (nor could the passenger to the driver). If this didn't improve the world, I'm not sure what does.
Unless Travis could have pulled off a miracle with self driving cars, Uber would be in exactly the same place it is today. If anything the company is executing better than it did under his leadership. It just cannot win the battle against basic economics, which everyone saw coming.
I don’t get why Uber isn’t profitable. Their marginal cost is only higher than zero because they choose to lose money.
Their fixed costs are servers and engineering. If they set their prices higher than what drivers are willing to accept they should make money.
I don’t see how “basic economics” is the enemy. Their enemy is setting expectations too high. If they were happy with a profit of $100M a year they would be sustainable forever.
Uber should just increase their rates dramatically, increase the driver’s share and offer discount subscriptions to loyal customers. Spontaneous riders pay more, others pay less.
They’re valued on growth, so if they decide to stop growing their valuation will plummet.
If they raise prices then quantity of rides will go down. If quantity of rides goes down, it becomes harder to earn a living as a driver. If it is harder to earn a living as a driver, there are fewer drivers. If there are fewer drivers, then the cost of drivers goes up.
Not to mention the fact that if uber becomes 10% more expensive a large chunk of those customers will just go to lyft.
If Uber pays drivers more than Lyft to a point where drivers stop driving for Lyft, riders won't be able to get a ride on Lyft, so they'll pay Uber's higher prices. Not everyone will; some will opt for a regular taxi, driving themselves, or transit. But I suspect that there is actually some combination of higher ride prices and higher driver salaries that will keep Uber alive and growing, though probably not at the same rate.
I believe that you have the power dynamic reversed. I.e. The drivers will go where the customers are more than the customers will go where the drivers are.
A driver only gets paid if a passenger rides. If Uber increases the costs of their rides over a competitor, the the customers will opt to the competition.
Honestly, the price increase on both platforms recently has pushed my household (Wife + Me) back to Muni/Driving. Previously, if one of us used ride sharing it was ~$5-8 each way. Now for the same ride we regularly hit $12-20. It was so bad the last week of my wife using them that she paid ~$18-20 each way, when I reminder her that that was $200 for the week just to get to work, she was shocked. At 4 weeks in the month thats a decent Mercedes payment, getting close to insurance+gas locally.
Now we only use it for the occasional night out where we just factor in the expense as entertainment. These services only have a marginal value that is approximately 2-3x public transit. In SF that is Muni at $2.50-$3, so $5-9 one way. Once you cross the $10 and creep into $15-20, you have a problem and the business crashes and burns.
In my twenties I remember working at a bar near chinatown. I would get off and my feet would be killing me. It was only maybe 6-8 blocks up Sutter to get to my old place, but every once in a while I would waste money on a Taxi. I remember it killing me that they started the meter at $3.50 and it would end like $8-10. Always felt like if they just flat rated it at $5 for my 6-8 blocks, I would take it everyday to and from (Uber sort of did just that and I rode it like crazy for a while), but at $10 it was a special treat and the rest of the time I schlepped up Sutter, feet be damned.
Driving people from point A to point B is a commodity. The only reason taxi drivers were able to command a premium was restricted supply through licensing/medallions and whatnot. Uber destroyed that, so now competition will drive the prices down to the actual cost of driver wage + petrol/vehicle operating costs.
Uber will see their margin squeezed down to nothing because they add nothing of value to the transaction: Any random cab company can buy a dispatch app.
That is actually the case in many markets - in Russia local city cab companies all have their apps, so you have three-four installed and you're good to go. And Russian Uber (aka Yandex.Taxi) is here as well
The basic economics argument assumes that there are not price points that are both higher than what drivers accept and that consumers are willing to pay. The existence of Lyft plays a role here, but both are in the same boat - they either need a new product line with better margins to take off that has some synergies with the ride-sharing business, or the unit economics of ride-sharing need to get bad enough for both concurrently to decide to raise prices.
The fact that taxi cabs existed for decades and were profitable means that this price point exists. That was the whole reason lyft and uber entered the market in the first place.
It all goes in a circle though: why did city governments sanction taxi cartels (by issuing a fixed number of medallions)?
Because if anyone can be a taxi anytime (aka open market), then you get a race to the bottom, both in quality and availability. Then there isn't a steady supply and a lot of collateral problems (accidents, crime, etc). The solution a century ago was to regulate: limited number of taxis and minimum driver qualifications. In the days before apps and routing, it meant that there were taxis available most of the time, except for maybe at peak times.
My point is that taxis are an extremely good example of why you need regulation. Uber and Lyft will succeed to the point they can replace that regulation (cheap enough fares, good enough cars and drivers).
You could also argue that Uber and Lyft are controlling the taxi market because they don't let drivers set their own fare. From the point of view of the driver, taxi-driving is an Uber-Lyft-sanctioned cartel right now.
This is a worthwhile writeup of how Uber's operating costs are generally higher than the industry it "disrupted" without actually solving the structural problems that industry had found an equilibrium around: https://americanaffairsjournal.org/2019/05/ubers-path-of-des...
Two relevant excerpts from that article on cost and structural problems:
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On Cost:
The cost structure of any urban car service company has four components: vehicle costs (typically 18 percent of total, including acquisition, financing, maintenance, and licensing), corporate costs (15 percent, including dispatching, advertising, overhead functions such as IT and legal, and returns to shareholders), fuel (9 percent), and driver compensation (58 percent, including benefits).5
Uber’s business model shifts the vehicle costs (ownership, maintenance, insurance) that traditional companies used to incur to its “independent contractor” drivers. Passenger fares need to cover total (Uber plus driver) costs. But shifting the burden of vehicle costs and financing onto drivers makes those costs higher, since hundreds of thousands of drivers with limited capital and business experience cannot possibly manage these costs as well as even a typical traditional cab company. Traditional cab companies also have much lower corporate costs, as they avoid Uber’s huge expenditures in areas like political lobbying, global branding, IT development, big corporate headquarters, etc.
Uber should also have higher driver costs than traditional operators, because the huge increase in the demand for drivers should have improved wages, benefits, and working conditions. As will be discussed below, however, Uber initially offered incentives that increased its driver costs, but since 2015 has suppressed take-home pay to minimum wage levels. This exercise of artificial market power cannot be considered an Uber efficiency or productivity advantage.
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On Structural Problems:
Far from revolutionizing the future of transportation, Uber has not solved any of the industry’s long-standing structural problems.
Most taxi demand is low-income; higher fares would shrink traffic and reduce utilization. Taxi demand is sociologically bipolar: 55 percent of demand comes from people earning less than $40,000 per year while 35 percent comes from people earning more than $100,000.10 Demand from lower-income people is driven by access to jobs in areas (or at times of day) when transit service is poor or nonexistent. Given the current income distribution of riders, any attempt to balance supply and demand will either drive lower-income passengers out of the market or result in wealthy customers being charged less than they might be willing to pay. Uber does not have the lower cost structure needed to improve service while keeping fares low, and apparently realizes that only a small portion of the market is willing to pay fares that would cover the true cost of its service. Higher prices would also reduce vehicle utilization and destroy any notion that Uber’s business has exceptional growth potential.
Uneven geographic demand creates unavoidable empty backhaul costs. Taxi demand, as with demand for every other form of urban transport, has extreme temporal and geographic peaks. Most cities have a dense core area where taxi demand is highest, and taxis operating within that zone can maintain reasonably high daily utilization. But the true cost of trips to neighborhoods outside that zone can be as much as twice normal trip costs since they will have an empty backhaul. Low-income neighborhoods receive poor taxi service because drivers rationally avoid trips where they won’t find a return fare. Uber does nothing to create new demand that can fill those empty seats, and has no way to vary fares based on backhaul utilization. People expect that the fare to the airport should be roughly the same at 6 a.m. (when the cab will return empty) as at 4 p.m. (when return fares are queued up).
Extremely high cost of peak capacity. Peak taxi demand occurs during the late evening, especially on Friday and Saturday nights. As with rush-hour transit and expressway peaks, the cost of the capacity needed to serve peak demand is four to five times the cost of serving demand on Tuesday morning. Cab companies cannot afford to provi...
The only point that sounds even remotely correct here is "companies can afford cheaper financing to buy cars than individuals" - although Uber could easily take care of that by buying vehicles and leasing them to drivers.
Otherwise, yeah, Uber did fundamentally improve both productivity and service quality vs. traditional cab companies. Mobile apps are an obvious service quality improvement (predictable waiting times, ease of finding cabs in remote locations, ease of payment), and allow Uber to provide the same level of service (i.e. availability / waiting times) as traditional cab companies, but with less drivers (since a user doesn't need to actually see a cab in order to hail it).
All other issues apply equally to cab companies - e.g. empty backhaul costs, cost of peak capacity, bimodal income distribution of users - except that Uber does, or at least could, solve them better with technological means - e.g. Uber Pool and Uber Eats for backhaul costs, automated and/or predictable surcharge for peak capacity issues, Uber Black to target richer users.
Overcapacity risk: in some locations, cabs were practically unlimited (e.g. Slovenia) so this existed before, in other locations limits were either because of monopoly (e.g. NYC) or skills (e.g. London), both of which Uber improves - breaking monopoly lowers prices for users (without decreasing driver wages, simply by destroying the profits of rent-seeking medalion owners), and there's no need to know every street of London in the era of Google Maps (and I definitely don't want to pay for it).
So, let's not kid ourselves - Uber is strictly better than what was before, and given its global availability, it also has a moat (when you land in city X, are you gonna load and set up local taxi cab that you don't know or trust, or just use Uber?), though there are still some regulatory / monopoly issues (e.g. in London Uber can't use bus lanes, whereas black cabs can). But I want to take Uber whenever I can and I want London cabs to die in fire.
(Having said that, I'm short on Uber as I think it's overvalued - but that doesn't mean without value. Also, I'm not against regulation - cities could improve relevant regulation e.g. preventing Uber from lying about surcharges, driver availability / location and preventing drivers from cancelling rides, but most cities choose to instead serve entrenched interests by (attempting to, yet fortunately often failing) enforcing monopolies.)
>> Otherwise, yeah, Uber did fundamentally improve both productivity and service quality vs. traditional cab companies.
This was true when they started and not really true today. There are many taxi companies with proper licenses and full time employees using the same app model as Uber. Taxify (nowadays Bolt) is one example.
> predictable waiting times, ease of finding cabs in remote locations, ease of payment
As someone who used call cabs in various Polish towns and suburbs since early 2000s, is claiming this was particularly bad is short memory or is the US bad at not just mass transit but also taxi service? I could get a cab within 15 minutes pretty much in any agglomeration, and even close suburbs. I didn't even need an app.
Same in Slovenia, yeah. Call, wait 15 minutes, cab shows up... or not. Again, Uber / Smart Phone tech improves on that, at least they tell you immediately if the driver cancels. (Admittedly, in the old days, the drivers didn't actually cancel, just gave up when they couldn't find your house or you weren't waiting outside at the very right moment... still Uber solves that, mostly.)
> Same in Slovenia, yeah. Call, wait 15 minutes, cab shows up... or not
...I had that happen _once_, and:
> at least they tell you immediately if the driver cancels.
...exactly that happened. Amazing, it's like they ask you for your phone number for a reason. This wasn't much of a problem pretty much since cell phones became a mainstay. I am not sure how Uber improves on that, guesses from the travel path that the driver gave up even if the driver decides not to report?
An Uber can't pick up a new passenger without cancelling their current pickup or picking up their current passenger and finishing the ride. Either way, the passenger both can see if they're coming to pick them up, and are made aware immediately if the driver cancels.
With cabs, you're expecting a cabby to call to dispatch that they're not picking you up. A cabby can easily be on the way to pick you up, find someone on the way and never let you know. That's a big difference in both what's possible, and what the reality is: cabbies never let you know if they're not coming in my experience. That said, many cab companies have an app now.
I don't know if you've ever taken a taxi before but this is nearly impossible for your statement to be true, simply by considering that the shared rides are more efficient from a common sense point of view.
Even if Uber isn't operating with more efficiency right now due to R&D and global expansion, there's no reason why they can't be given that they aren't operated by a guy on a telephone manually dispatching cars.
I have indeed taken a taxi before. I still have the photo in my album of cherished memories. I flip back to it each morning to relive the experience. Ahhh.
"Nearly impossible" is a simultaneously weak and strong claim. Let's try to break it down.
It may be useful to distinguish between shared rides and people using Lyft / Uber / X for a single group riding to a single destination. If there are stats on the distribution of number of parties in a single trip for the major providers, that would be a helpful stat. My anecdotal experience is that most rides I've taken and that I've seen others take are not shared, particularly for those on the higher end of the willingness-to-pay spectrum mentioned in the article. (If you're on your way to an important meeting, do you really want to throw in the variability of maybe picking up someone else along the route?) I don't think Lyft and Uber are perceived primarily as shared-ride services -- they originated as alternatives to single-party, single-destination rides. IOW, as direct alternatives to existing taxi service.
In terms of efficiency, please look at the breakdown of costs in the article -- I even excerpted some of those here. The cost of dispatch is actually quite low among the components of costs to run an urban hail-ride fleet. Look at Uber's R&D costs and, even amortized over the anticipated rides, and compare that to "a guy on a telephone." One fully-loaded Uber engineer's salary would pay for tens of full-time dispatchers in N. Amer. / European cities and hundreds of dispatchers where labor costs are lower. Similarly, the costs of fleet operations in terms of cars are going to be higher. Do you think "some driver with an app" can maintain and utilize a vehicle better than a taxi fleet, which can run the car 24/7 and have centralized maintenance facilities and bulk discounts on supplies and fuel? Efficiency considerations need to take into account both the costs and benefits. I think one of the points the article is trying to make is that Uber has been hiding these costs or relying on subsidies from private investors until recently.
One of the broader points the article attempts to make is that urban ride-hail fleets have attempted to optimize for things other than the pure efficiency of the rides. For example, they optimize for serving otherwise underserved areas (where some taxis won't go or won't take you because they're concerned about the unpaid backhaul). They optimize for some driver protections. I think it's useful to consider what is going into any definition of "efficiency." Is it utilization time of the vehicle? (This doesn't account for number of passengers served if the rides are longer because the rides are in suburbs rather than dense urban cores. It also doesn't account for taxis being utilized 24/7 while a privately-operated Uber maybe is operated 14 or so hours / day -- if the driver is willing to push the margins of safety and sanity.) The number of rides per hour? The time it takes per unit of distance? (On that last point, there's some evidence that the rise of uncapped ride-hailing services in urban cores has led to significant traffic increases s.t. it's actually slower to get around now in dense cities precisely because of Uber.) The article attempts to call attention to some of these other possible dimensions of optimization. Depending on which dimensions are optimized and the transportation network, it is entirely possible for "a guy on a telephone" to be more efficient. And questions of fairness -- for drivers, for pedestrians and mass transit riders, and for others -- will be affected by that choice of optimization.
Uber could be profitable at higher prices. But would we just be left with a higher-priced taxi service that significantly decreased fairness?
I mean resistance to his ideals and methods are based on his relative carelessness towards anything but his and the company's goals.
Incredible leader, amazing CEO with the raw ability to move mountains for the company's growth.
Remarkably bad at human and helping humankind.
If burning the Amazon rainforest helped Uber's goals he would have it torched in the most efficient and rapid method possible by morning light. Perfect CEO for the shareholders and maybe for keeping the lights on, not so much for the rest of us.
> CEO with the raw ability to move mountains for the company's growth.
Perhaps to a fault. He seemed to be so singularly focused on increasing revenue that, when it became clear that people would line up around the block to buy crisp new dollar bills for $0.75 apiece, he didn't hesitate for a second.
I would say that the way how Uber aggressively expanded throughout the world has massively helped humankind. Because of Uber, many countries have changed their taxi laws, and many local competitors have sprouted up. More efficient taxi and ride-sharing services help save the environment and make cities nicer. Of course this is quite theoretical but I believe Uber was the needed company to push the mass transit development forward.
Was making more taxis on the road with more downtime and increasing congestion really an improvement in cities?
A Recent study found that 50% of all cars in lower manhattan were rideshares. Is that really a better world? Ridesharing in cities has been absolutely proven to increase pollution rather than reduce while carpooling in rural areas helps reduce pollution. The problem with rideshares is that they are jobs based on time rather than efficiency. You drop someone off and then you are available to pick someone up, so you drive to them, drive them where they need to go and drive to the next person, the points between passengers are reductions in efficiency vs single cars and add to congestion in high congestion areas. In any case mass transit is much better in cities.
In most of the US, probably. It's not so clear cut in London. The tube is usually faster and more pleasant. (London's air quality is pretty bad, and many Uber drivers have an annoying habit of driving through heavy traffic with the windows open.)
Sure, but London has always had taxis, too, because sometimes they're the better tool. It's not like some people are taxi-takers and others are subway-takers. You use whatever's best at the time. When I lived in Boston I took the T every day -- but on some occasions, a taxi was the better choice.
And the negative externalities of all those additional cars on the road are far worse than if you just have more people using the existing subway, too.
If you're going to do a full accounting of all the costs of all those additional cars on the road, and all that additional congestion, then rideshare doesn't come out looking so rosy.
He was absolutely instrumental to the early success. In some places they were actively breaking the law just to operate there, and Kalanick was able disrupt the system and make Uber important enough to change the laws.
However, that doesn't mean he should still be CEO. Kalanick also created a company culture that became more and more toxic as it grew larger. Lyft was arguably on the ropes and might've failed without the #DeleteUber movement caused by all of the Uber scandals. Without Lyft for competition Uber might actually have the pricing power to be profitable now, but as it stands I'm not sure how viable they are in the long-term.
You've reminded me of an observation I made recently about Star Wars: the behavior of Han Solo (pre-Greedo-shoots-first-bs) and Darth Vader aren't that different. It's the context that matters. If you're small and scrappy, antisocial behavior makes you a charming scoundrel. If you're big, the same behavior makes you evil.
But the difference is that Han came around at the end of A New Hope, joined the Rebellion, and saved Luke’s ass, which lead to the Death Star’s destruction. This proved he wasn’t a complete scoundrel and had good within him.
Uber’s corporate culture was ugly and toxic from the start. And it never got better or “came around” to a good cause. A better analogy would be Anakin moving from small-time massacres of Sand People to blowing up planets as Vader. The scale changed, but it was still evil all along.
I think it’s misleading to defend Travis as some misunderstood scoundrel whose enabling of sexual harassment didn’t “scale”. He’s just a shitty person who initially had less power to be shitty.
Not to mention the stories of early stage Uber engaging in shady tactics like hailing and cancelling Lyft rides as a manual DDOS, or ripping mustaches off parked Lyft cars.
Unfortunately many people lose close family members, even parents, in tragic, horrible, unfair circumstances that never see justice all the time. Most of them - I would wager almost absolutely all of them - do not commit mass murder afterwards. I vehemently disagree with your opinion about what I would have done in his place and register my unease with how you raise it as an obvious general norm.
Vader moved fast and broke things sure, but he succeeded in disrupting the Old Republic. That’s why he’s the real hero of Star Wars, and a role model for the tech community in general.
Not sure if you’re joking, but I think “moving fast and breaking things” is a bit of an understatement. I mean Vader enabled a heartless dictator to take over the galaxy and personally saw to it that a whole planet of billions of people blew up. Doubtless in the years after Order 66 Vader was responsible for millions of other deaths. I mean he personally strangled Captain Antilles for god’s sake.
The Old Republic was flawed, but disruption in this manner was clearly a step towards a new, shittier status quo. Disrupting something and making it worse doesn’t make him a hero.
The Death Star's destruction also killed thousands and thousands of soldiers, bureaucrats, and construction workers. A lot of who is good/bad in Star Wars is perspective. The Jedi can also be seen as religious extremists that kidnap children to indoctrinate in their ways, to lead in terrorist missions that help impose their view on an entire galaxy. Darth Vader is an emperor protecting his empire from a growing threat.
By creating a weapon of mass destruction that destroys whole planets? I think the scale of that endeavor and the resulting destruction of Alderaan is justification enough for destroying the Death Star. But destroying Alderaan itself? I don't see any justification for that in the vein of him protecting his empire. They certainly didn't seem to pose a threat big enough for the planet to be destroyed.
When one side escalates to that point, and the other side takes away their weapon of escalation, it's false equivalency to try to equate the two.
Han shooting first is totally legitimate. Greedo is an organized crime thug who is going to take Han to an incredibly painful and certain death. It's self-defense even if he shot first.
You're completely ignoring the most important data. Han Solo and Darth Vader are not the same person. Maybe one is just more likable than the other?
You can have two different comedians tell identical jokes, word for word, and only one of them will be funny. Jim Jefferies does an entire bit about a journalist who reviews his jokes harshly after transcribing them to text. His conclusion is (paraphrasing) "my entire job is to say offensive things while still being likable."
...because it is different? If you're a small fry, you hurt fewer people, and any claims that it's a survival necessity are at least plausible. It's also quite likely that people you hurt are actually worse than you, as is possible with Greedo.
If you do the same as the director of FBI, _excuse me_, Lord of the Sith, things are quite different.
Edit: but also, Uber and Kalanick were never small fries. So that's where it breaks down.
Perhaps the next question is, what do 4000 engineers do? Not aimed as a troll-y question: an informed idea of what the breakdown of that many engineers do would be enlightening. For example, there were about 200 iOS engineers the last I heard. Assuming similar levels for Android, that leaves 3,500-3,600 engineers.
Uber doesn't just make apps for phones.
They also have an entire self-driving car division (computer vision, etc), car routing, maps folks, payments, the separate driver apps, etc. A company that size and complexity has plenty of work for engineers.
+1 Appreciate you avoiding the usual "it's just a little smartphone app"
I'm not going to try and give an exhaustive list, but as a rough explanation: things get really, really hard when you're operating at Uber scale (hundreds of thousands of riders on trip at any one time, each demanding low latency and reliability):
- Product: native clients for each side of the marketplace in each vertical (rides, eats, freight, atg, et al), maps, localization for every country with a presence (not just language, but tax, legal, hundreds of region-specific modes e.g.: tuk tuks)
- Infrastructure: hardware teams to build on-prem DCs (cloud can get very expensive at scale), software networking to deal with said low-latency traffic, storage to optimize for reliability/latency/cost, observability (metrics, logging, alerting, tracing), security, et al
- Data: insights, operational support, routing, et al
I still feel like this is a ridiculous amount of workers when one takes into account that the product they're offering is essentially a smartphone app with a backend service that pairs drivers and customers, which regular cab markets do without almost a single person.
To me Uber feels like some sort of soviet-era experiment of replacing a market with someone micromanaging cars
But of course, when you just oversimplify what the app actually does it sounds like it should be so darn easy to make and maintain.
It's like saying Microsoft Office is "just an app that writes documents" or that GMail is "just an email client."
Uber and Lyft do a whole lot more than what you described on the scale of millions of concurrent users in dozens of countries.
Your comparison to a taxi isn't really a great one because you see taxis sitting around on curbs and driving around empty looking for a passengers all the time. A lot of the cost of a taxi is you paying for idle time.
>Uber and Lyft do a whole lot more than what you described on the scale of millions of concurrent users in dozens of countries.
which is my point. There's no use in engineering and coordinating something that organises itself. The utility of a centrally managed service needs to be balanced against the resources it costs to run the operation.
Taxis actually don't spent as much time sitting around as you think, traffic organises quite spontaneously, drivers know where to wait and downtime is usually quite low. Which is why it is so difficult for Uber to make a profit, the efficiency gains compared to the engineering effort that goes into them are miniscule, which is the disease of all centrally managed systems. The Soviet planning buro managed millions of factories which sounds impressive, it doesn't mean that they were any good at it.
If Uber would realise such huge efficiency gains in organising rides the result would either be higher wages than taxi companies or lower prices, which would make them instantly profitable, no billions of subsidies required.
I work for a company that does kinda similar software stuff for vehicles - Uber has about two orders of magnitude more drivers than my company, but about three orders of magnitude more engineers - it's almost like they've got diseconomies of scale.
Two orders of magnitude are a lot of orders of magnitude. It could be the difference between using really easy off-the-shelf solutions to having to architect your own technology to solve scaling issues like Google has.
Uber operates in many more countries than us. Enough to necessitate ten times more engineers per driver? I can't really say without more insight into what they're doing.
One thing I've learned time and time again in software is if something seems super simple on the surface, it almost always means there was a hell of a lot of engineering and attention to detail to make it seem that simple.
this is a good question, not just for Uber but for many companies. It would be interesting to see how large companies utilize large scale employment, seeing the breakdown of what needs to be done, how much of it is R&D, how much of it actually moves the needle on assisting in company operations.
I work in a big organization of over 1K people and although most people work extremely hard, I still don't see how most of what we do helps the company enough to warrant a decent ROI.
This strikes me as a sort of "Uber? I could build that over a weekend" kind of comment.
27k does sound like a lot, but your figures seem arbitrary if you've never looked at their internal software, operations, what's being developed that we don't know about, etc.
Because otherwise they're not ``growing''. A company with just enough people to maintain what they already have can't promise to take over the world or whatever.
Google is pretty well-known for maintaining a very deep bench-- if an engineer isn't effective in some role, they'll just move them to some other team. Heck, a lot of hires (especially 3rd/last attempt) go directly to the bench. This strategy pays off well when a new competitor (like Facebook or Uber) comes along and snatches up people in the lead roles, or if the company feels the need to pivot to something really fast (e.g. Google+, which drew from many teams across the entire company).
Moreover, hiring a long-term employee today versus tomorrow might save money for a place like Google, assuming we expect competition and wages to continue to increase.
It strikes me that if Uber is laying off software engineers, their company outlook must be very, very dire. A layoff is perhaps better strategy than firing the bottom 5%, which would likely preclude the departed from re-joining at a better time. But probably the wrong message to send to a cohort like software engineers-- a layoff is a legal confirmation that the company made a big mistake.
Im not sure how much one can extrapolate from this. Google also has the massive scale, in terms of both headcount and profit, to smooth out things like this and hold onto talent for the longterm. As huge and well-capitalized as Uber is, Google really is on another level.
This strategy works very well if you have a gigantic money printing machine, which Google does. Uber has a gigantic money incinerating machine. They don't have the ability to just have engineers spinning their wheels on non-business critical projects like Google does.
Or in the case of Amazon you have both, printing money with an awful culture of churning through employees. They even structured their stock vesting around it.
Google makes a ridiculous amount of profit. Uber loses a ridiculous amount of money. They can’t afford a back bench of expensive California engineers that do not help to quickly reverse the huge losses.
Yeah, if you work for Facebook on something Google wants, you can flunk 10 onsite interviews in a row... There was some blog post from a guy who flunked like 7 onsite interviews, year after year, before he got into Google...
I was told by a Google HR that on average a candidate tries 4 times before passing the interview. That's believable because when any of the 5 interviewers saying "probably not" translates to a no hire, stars really need to align even for stellar candidates.
I believe it's 3 times per level or role. One could interview 3 times for l5 SWE role and thrice more for l6 when they are deemed eligible again.(With more experience etc.)
I mean one company prints money, and the other has some of the biggest losses in tech industry. What do you expect?
If anything, Uber has invested in too much tech for the sake of being tech heavy, which may not be best suited for their business (outside self-driving, which needs heavy tech investment).
I've been wondering about this for years, do you have any data to actually back that up? Seeing how teslas are "very close" to self driving why doesn't uber up the game and go full self driving with lidar.
I never said it was impossible, it's just not an absolute certainty or just around the corner as people make it out to be. It's at best a research project.
Google invests in a lot of moonshot projects, and also shuts down projects regularly. To their credit, they are willing to invest in high risk/high reward stuff, so the fact that Google is investing in something doesn't actually mean that this thing will succeed, or not be cancelled in the future.
But remember that there is a lot of value between "no computer on board" and "fully self-driving". Cars already have things like lane assist technology, smarter cruising technology, collision avoidance, software to help maintain distance between the car ahead of you, smarter breaking, better mapping and routing technology.
These are valuable features that can generate revenue even if fully automated self-driving cars never happen, or happen in 100 years. These are also features that can help older drivers with slower reaction times stay behind the wheel and keep driving, thus increasing the number of human drivers.
No, that was closer to “more wood/fewer arrows” (but that was more about aimless toys than deliberate moonshots), which was several years before Alphabet.
Alphabet was to more cleanly separate (in branding and organizationally) the core Google business from other ventures, which moved the moonshots out of Google proper. It wasn't to kill moonshots, though it may be accurate to say it was in part about being better at maturing them.
This is untrue. It doesn't take into account the fact Uber has externalised a bunch of stuff like maintenance onto its drivers. Bringing it in house would sink them imo, human capital or not.
> If the maintenance of cars out weighted the profitability for the driver there would be no Uber drivers at all.
This assumes drivers that correctly allocate the source of maintenance costs among all uses of the vehicle in assessing cost/benefit of driving for Uber.
No, it assumes that when a driver can no longer make ends meet since they are paying more in maintenance than they are earning, they will no longer have money for gas to be an Uber driver, thus quitting.
> No, it assumes that when a driver can no longer make ends meet since they are paying more in maintenance than they are earning, they will no longer have money for gas to be an Uber driver, thus quitting.
So, it assumes no new supply of drivers misjudging costs, and no drivers with multiple income streams that fail to recognize the source of maintenance costs and that Uber is losing money.
It's basically a “no one will buy lottery tickets or engage in other less-than-break-even gambling for non-entertainment purposes” argument, except that gambling venues are usually required to publish their net payout stats, while Uber isn't.
Car maintenance is something that's done already, i.e. by people who want to actually use their own car? I still maintain Uber is something for free here.
Why would Uber necessarily reap outsized benefits from self driving though? In my mind, "ridesharing" would be even more commoditized, with price and safety being the two main factors in consumer choice.
You can't actually terminate that many people without a planned layoff, according to CA labor law. It's to protect workers from mass firings (at least a little) https://www.shouselaw.com/employment/warn-act.html
The press release mentions the hires were the result of "decentralized hyper-growth".
That is basically code word for political fiefdoms seizing power.
No cloud-hosted or SaaS company should allow silos or redundancy around communal services.
This is long overdue and Dara is making the right move to clean up.
But to your point.... should the Engineers be reallocated to a bench until properly utilized? Yes. Moves like this can be poisonous to culture long-term.
I mean Google and Facebook want the option to prevent their engineers from building something that may compete with it n the ad space. Rest and vest right? Uber competitors would need to do something in the delivery, leasing, transportation and ride sharing space to be specific threats. Maybe ride share could be disrupted with a peer to peer model. I always thought that the carpools across the bay bridge where interesting. That's basically self organized and very effective.
> It strikes me that if Uber is laying off software engineers, their company outlook must be very, very dire
I doubt that. Uber's place in the market is very much theirs to lose. It's more reasonable to think that this is the market for software engineers in SV/SF starting to correct itself.
The Dallas office is an administrative office and will not have eng roles. Also, these are all "promises", we really have to see how it plays out. Promises are cheap. Remember how Foxcon was going to hire 10k people in Wisconsin
I know many engineers who want to get out of the Bay Area. San Francisco is a disaster, they’re priced out of the the peninsula, and commuting one or two hours each way from the hinterlands loses its appeal real fast.
That said, getting laid off like this would be much harder to bounce back from if you were not in a tech hub.
Kinda interesting that they chose to do the layoffs during the Apple event. I wish companies would just own what's going on instead of trying to bury it.
"Of those laid off, more than 85% are based in the U.S., 10% in the Asia-Pacific and 5% in Europe, the Middle East and Africa, according to the source."
Interesting. This hit seems to be mostly localized to the US. During their last mass layoff in July, employees from all over the world were affected.
Probably some reality shaking out. Uber's engineering team puts out some impressive stuff, often as OSS. Their engineering blogs are regularly on HN. I've been genuinely surprised that they churn out some of these things and release them for free given their relatively extreme financial situation.
In contrast to companies like Google, Apple, Microsoft, Amazon etc. that have mountains of their own money to burn (rather than investors') on research and OSS side-projects, it always seemed to me that Uber was trying to play the same game, but far too early. Paying lavish SF engineer salaries to generate cool, but not revenue generating, software is probably excellent for morale, culture and recruiting, but a dubious use of resources when you are losing money seemingly faster than it would be logistically possible to literally burn it.
Saying they're ~ "culling the low performers" can be entirely true, but it is also a Silicon Valley, meritocracy-culture-friendly way of saying "we're losing far too much money to pay bloated growth-stage poaching-game salaries to engineers, so if you're not working on something that generates revenue, glhf"
It doesn't really cost anything to open source something though. These are all projects which are developed for a reason: the commercial version might be prohibitively expensive at Uber scale, or not technically capable of operating at Uber scale, or just plain doesn't exist yet. At that point you can engage with the tech community and offer it as OSS (not to mention make your engineers happy), or you can keep it to yourself and eventually lose that opportunity to somebody else.
That's not true. It costs quite a bit to open source a product if you're a commercial entity.. It needs to be reviewed (by legal, security, engineering, etc) and approved..
You're not just flipping the public/private flag on the repo.
Also, the doc, blog posts, feedback from the community, evangelization at conferences, thinking out the API design so it answers enough cases, not just yours, all take engineering time, that's not free.
Of course. But compare that cost to (say) six full time engineers pumping out code for a couple of years. It's not the dominant cost by any means. Not to mention you're paying those other folks a salary regardless.
If it helps you attract better talent, well - there's a financial incentive there through increased efficiency which I'm sure on its own is more than equal to the review cost.
Not disagreeing but elaborating: The costs are higher when it's an already existing product of which parts the company doesn't fully own enough rights of for publishing. Even higher when it's not known which parts are fully owned by the company and which parts are of foreign origin. The costs are lower when it's meant to be open sourced from the start and it's been a project constraint since before the first line was written.
Why would you give your open source code a tighter security and engineering review than your in-house code? Are you hoping for security through obscurity? And quality through obscurity?
We open sourced my team's project a few years ago ( https://nomulus.foo ) and it was a substantial amount of work. There's everything you're saying plus a fair amount of engineering to get the darn thing working externally; we were built/hosted within the Google monorepo which is obviously not externalizable. And you end up spending lots of time writing documentation that you hadn't ever gotten around to when it was just a project being worked on by a handful of engineers all sharing adjacent desks.
Depending on context, sure this could be true. Like if you're comparing the cost of releasing some small OSS module of Uber's to Uber's annual revenue, sure, it's going to be a negligible cost. But if you compare against the cost of developing the module in the first place, it can easily be an equal expense. For example I spent several months on a BLE library for Android (https://github.com/iDevicesInc/SweetBlue) and asked my company to open source it. It took several more months to get the library to a point that was suitable for a proper OSS release. So cleaning up code, making sure no sensitive info, swear words and such, documentation, lawyery stuff, icons, PR copy, blog post, basic website, wiki, and much more nitty gritty I'm glossing over.
I mean a company can just throw code over the wall into GitHub and call it OSS, but I associate a basic level of polish with a proper OSS release that does indeed take a good amount of effort. And that's just initial effort! If it becomes at all popular then you have further ongoing overhead.
I'd say a general rule is that open-sourcing something is at least 50% of overall cost of the project.
100% agreed, I started doing this for a small project my company has. We don't really use it anymore, but it would be helpful to many hobby projects however we are now sitting here saying 3 weeks work to just give this code away? ick.
> So cleaning up code, making sure no sensitive info, swear words and such, documentation, lawyery stuff, icons, PR copy, blog post, basic website, wiki, and much more nitty gritty I'm glossing over.
I'm the manager of one of Uber's OSS projects, and all that the things you listed here ring true. I just know that in our case at least, OSS prep absolutely pales in comparison to the feature/operational work put in by the team.
To be clear, when I added "really" to that first sentence it was meant to communicate that there is some cost, but in the sense that it's negligible to Uber's losses, as you point out. I was responding to OP's "dubious use of resources" comment. But I can see that wasn't clear.
Yeah absolutely! It's a successful project and pretty integral to Uber, I love what I do and have a lot of faith in my manager/director. I don't anticipate any reason for our situation to change.
> If it becomes at all popular then you have further ongoing overhead.
THIS is the one that comes into play. All that stuff you listed before is a slog to go through when you go to open-source, but unless you're parking the thing as a proof-of-concept/end-of-life, you're now signed up for maintaining the repo. That means triaging issues, pull requests, helping out when contributors don't understand why their build is breaking, etc.
And there's the PM aspect of it: you don't just want to develop a bunch of features without talking to your community, so communicating (in a public friendly way) what you're planning to work on, when folks might reasonably expect that, how they might be able to help out, which of their contributed features you might be able to take depending on where you're at in your lifecycle, and RESPONDING TO COMMENTS all takes way more time than just "building [closed-source] product" in a team of 5-20.
And of course, one of the hardest of all: telling people "no, we can't take that change" when they've spent hours and hours doing work for your project for free. In that regard, we're still very much iterating on a transparent design process that allows for consensus BEFORE too much work has been done (though as we all know, building prototypes is often one of the best ways to find out if a design works right or not).
If you're doing it all right, everyone involved in the project should be doing some amount of all of this every single day. There's no compartmentalizing an engineer on an OSS project as "someone who just writes feature code" vs. "someone who does the repo stuff".
So going back to OP's point: no, it doesn't literally "cost anything" (or very much) to do the basic act of open-sourcing, doing it the "right way" at scale where you're truly engaging and working with the bazaar is very expensive.
Full disclosure: I'm a PM at Microsoft working on PowerShell and was heavily involved in it being open-sourced and ported to macOS/Linux.
Tangent: Could you explain why I might want PowerShell on MacOS or Linux, if I use those as my primary OS? (I usually only open my windows VM for checking that my websites work in IE 11).
Linux is actually half of our usage on PS Core[1], so it's a great question. A lot of folks use PowerShell inside of CI/CD pipelines, especially for cross-platform app development of .NET Core applications (having a single build/test/deploy script is often cited as vastly preferable to trying to maintain a split of .ps1/.cmd/.bat and .sh/.py/.rb).
But also, lots of folks prefer an object-oriented pipeline. Many of those folks (our primary use case for 10+ years has been IT management) are used to PowerShell on Windows and starting to learn or be exposed to other environments.
We've also got lots zsh-style optimizations in PSReadline. In some cases, we've got some catching up to do, but there's also lots of unique interactive optimizations hiding around[2].
It's also great for interactively exploring REST APIs and building scripts via that experimentation. Try running
And then look at all the properties you can explore:
$a | Get-Member [or gm]
$a.<tab><tab><tab>
Oh, and of course, one of the big reasons is "so you don't have to open a Windows VM to remote into your Windows Server boxes and manage them from a Macbook".
This is obviously not an exhaustive list, but it'd take a lot more time to write about every benefit and scenario here. In any case, it turns out that our user base is pretty spread out among different scenarios, but between our repo and usage numbers, we've been really happy with how excited that such a diverse group of folks really love PowerShell.
And feel free to reach out to me on Twitter @joeyaiello if you ever want to talk more about your experience (or just hop into our GitHub repo). :)
This was far more detailed than I expected. You seem very passionate for PowerShell. The rest method exploration looks very cool, I knew I might learn something cool by asking. Thanks!
> It doesn't really cost anything to open source something though.
Yes, it costs next to nothing to just open source a project if you mean literally just putting the source on some hosting site.
However, open sourcing something properly, where you respond to issues, document things properly, and provide build/test infrastructure to external developers is much more work. Not only that but you have to be much more careful when creating APIs and be much more vigilant about keeping backwards compatibility.
There was the fixed cost of developing it, and then the potential lost revenue of not selling it, similar to an opportunity cost.
If the presumption is that the software would be useful ("developed for a reason") economics suggests there is some price people would be willing to pay for it, and you forfeit that when you make it OSS. That absolutely costs something.
Sure you may not want to be in the business of commercial software (support, maintenance, ultimately just responsibility) which is a completely sane thing to avoid. However when you are bleeding money at the rate of a small country's GDP per year, avoiding opportunities to generate profit based on intangibles like community engagement can come off as ill-advised. In fact, if your company is declared bloated, it stands to reason that you should have the capacity to take on the additional overhead of selling the software. It is not that contributing to OSS is wrong, or that your points are wrong, just that there is a time and situation for this kind of strategy.
Contrast with Amazon, whose entire development of AWS was for the reasons you point out. Instead of open-sourcing it, to the extent that would be possible, they made it into a product and almost in a single move turned consistent overall loss into a massively profitable company.
So this is not at all to argue against the merits of having healthy OSS contribution at a company, but more to say that a company can't contribute to OSS if they are bankrupt - so avoiding the latter should be prioritized over the former.
They did some impressive stuff, but internally the eng org was bloated as hell, thanks to Thuan's leadership. Ironicaly, Thuan recently asked his directors to tell him which departments are bloated so he could decide who to cut. So much for the "amazing leadership".
It's especially a dick move when everybody already knows they're hurting for cash, and the official position could be "we just can't afford all these people" without the company losing any face. They aren't fooling anybody by pretending it's not about the cost.
You can just say something like "we're restructuring to focus on our core competencies". If you fire a bunch of non-critical staff, you just told investors "our revenue to cost ratio is about to get a lot better" and so if anything investors who have been watching the decline are going to recognize you are doing something about the problem.
Indeed, HP (or HPE and HP Inc.) has done many layoffs in the past few decades. I just narrowly dodged one a number of years ago. Pretty much always the goal is to simply reduce costs without reducing revenue (as much). Investors don't care how much staff you have, they just care if you are making money.
People who aren't critical to the core product, or whose projects aren't big revenue generators. They might be high performers while being technically unprofitable.
Any number of reasons. They might be high performers in skill sets not needed in those business critical projects. You might be leery of the time needed to get up to speed on something completely different.
You can't just swap out members of a team, or add more members to a team, and expect the result to be faster execution (in short run) even if the new team members are high performers.
In the first case, you're losing team members with tribal knowledge of the system and its requirements. In the second case, you're exponentially increasing the pathways of communication. In either case, you still have the ramp-up time for new team members.
I'm implying that rather than laying off top performers you find them a different role in your organization.
Granted if the skill set is incredibly niche--such as hand optimizing HC12 assembly and you've moved to ARM then perhaps not.
It's hard to imagine a scenario where an entire project teams skillset is so niche that they couldn't find a home for top developers in other parts of the org.
Not necessarily a bad idea, but disrupting those business critical teams by just swapping out people could actually slow down execution and hurt revenue.
If you could chose low performers, lay them off, and be more focused and higher productivity with the remaining people...
_Why haven't you already done that?_
Nobody likes low-performers, even when you're flush with cash. Fixing their mistakes is demoralizing for your high-performers. The word gets around that you have low standards, and it's hard to recruit.
The only way to get your money's worth from them is to put them in death marches and grind them down until they burn out and quit.
I am always extremely suspicious of claims that a company is going to lay off its poor performers and magically be better. If they're telling the truth, they are actually saying that their existing managers are incompetent.
There's a reason that all tech companies try to brag that they only hire the top performers.
Fine, but laying off people who don’t work out is an ongoing process in all companies. If people haven’t already been let go as a part of the company’s existing management review process, what changed suddenly that the company can suddenly lay off a bunch of people in one go and “improve?”
Another way to think about it is that everyone has some productivity, some contribution to the company’s net progress. If someone’s contribution is negative, they should already have been let go.
If their contribution is less than others, maybe “bottom 10%,” but it is still positive, you may be letting go a relatively poor performer in a round of layoffs, but you’re still shedding a person with a positive contribution.
You are going to be worse off, no matter how you sugar-coat it.
> Nobody likes low-performers, even when you're flush with cash. Fixing their mistakes is demoralizing for your high-performers.
If you define performance as change over time then this would seem to have nothing to do with mistakes. From what I've read about the space shuttle programmers, they would have been classified as low performance (low change over time) but who also made with very few mistakes (as I understand their process). At the other end you could have high performing programmers (lots of change) with high defects that they're always fixing (which could in turn qualify as still more change).
Well, the colloquial understanding of a “layoff” is that it is not based on underperformers, but based on changing business conditions.
For example, closing a plant, or getting out of a line of business. If Uber decides not to have anything more to do with self-driving vehicles, they might lay off everyone in its division.
That would have nothing to do with poor performance on the part of individuals.
On the other hand, there is “These people are underperformers,” which is part of Uber’s allegation as they throw their former employees under the bus rather than take responsibility for their management choices.
I contend that if people are underperformers, a constant trickle of letting such people go is not bad for morale. It’s perfectly normal.
“Did you hear they let Dave go?” “Yeah. What took them so long?” That’s the usual talk.
Whereas, “Did you hear that they shut down ML?” “Yeah, and it was half the database tuning group last month, who’ll be next?” “I dunno, but I’m not hanging around to find out...” is the thing you are describing.
Long story short, I agree that a trickle of layoffs is not good, but I suggest that this is true when the people being let go are not thought of as holding the company back.
I disagree that it doesn’t matter who it is. If they are underperforming in the sense of being bottom 10% but still carrying their costs, I agree with you about trickle, but then we can’t claim that letting them go makes the company stronger.
But if they are underperforming to the extent that letting them go makes the engineering group more effective, then management should have identified them earlier, done everything in its power to make them perform, and let them go if they didn’t improve.
Ignoring net negative employees, or being blind to whether they are net negative, or keeping them around even though they are known to be net negative is bad for the company’s bottom line and bad for its morale.
Hello Reginald, I am a fan and a fellow Torontonian!
I agree with your points, but optics might depend on a company. In a startup or smaller company being aware that underperforming employees are let go might actually improve morale. For bigger companies it is a typical situation that you notice or get to know that people from other teams are gone, but you may not be aware of their performance.
True, but then again you probably don't notice so much. Every month there is a new face here and a new face there, and one old face has... Quit? Retired? Been fired? Who knows...
I like reading your writing so I would appreciate your input/feedback either here or you can email me at gmail, whichever is more convenient.
> Nobody likes low-performers, even when you're flush with cash. Fixing their mistakes is demoralizing for your high-performers. The word gets around that you have low standards, and it's hard to recruit.
Fixing mistakes is part of development. I am yet to be part of a team that never made a mistake. Mistakes are how we learn and get better.
If the same mistakes repeat, THEN you have a problem but if a single individual is to blame everytime, then it's not the individual's problem - you have a bad team. Your team has failed at teamwork - the primary focus of any team.
If you have a team of dozen engineers making a car, the car does not drive until all the parts are not only in place but they all work well together.
The way to make all parts work well together is to have the designers of the parts communicate and work together, well.
If the engine guy is not talking to the intake and exhaust guys, don't be surprised if there are leaks at best or the engine blows up at worst.
I AM assuming each team member went through an interview process. If the going was tough where you could not interview and had to let just any person in, hopefully this person helped you through the tough times.
What value does the interview process provide if you can't figure out if your candidate is a high-performer or not?
Why did your interview process select a low-performer?
Also, performance is the output of a team - a single person should not be expected to provide high-performance day in and day out.
That's impractical to expect out of a human being. A machine and a person have vastly different characteristics.
If my team is working well, we will have a high performance team. There is no other way to have high performance sustained over a long term.
Each team member needs to actually looking forward to working with each other.
The other extreme is programmers work in these silos and come up with solutions that barely work well with each other and then there's blame game being played.
Why do that nonsense? Save money? No - of course not!
Just work as a team!
> The only way to get your money's worth from them is to put them in death marches and grind them down until they burn out and quit.
I don't follow.
Death marches?
First of all WHY do this at all?
What's wrong with the alternative "Hey, it looks like it's not working out. We will be letting you go and support you in looking for a job elsewhere over the next X days"
At one point in time in the past, you and your team interviewed this person and found them useful - what changed that they are no longer useful?
Was an error in hiring made?
Own up, take responsibility and move on. Make the interview process better.
Did the person expect to get a larger bump come bonus/review time that did not happen and now they are demoralized and upset?
Own up, take responsibility and move on. Clarify better what bumps and bonus would be like and how much effort that would entail next time.
> I am always extremely suspicious of claims that a company is going to lay off its poor performers and magically be better. If they're telling the truth, they are actually saying that their existing managers are incompetent.
I also don't follow this and want to hear more about this perspective.
What happens to the people working in mining, transporting and delivering ice from Iceland to California when refrigerators get invented?
Are those people inherently low performers or has the industry they work for shifted beneath them?
We (developers) work in an area of high specialization and the market values us for it (to the tune of six figures).
I have worked at both product and service companies before where entire departments were laid off because a contract did not get renewed or the market changed.
You can't be a unicorn and not be able to afford the people. This is not a story for people in the tech who know about the industry and the six figure salaries engineers at unicorns make.
This is a story for retail that will be buying stock. "We cannot afford X" can be an stock buster.
I completely disagree. Which would you rather have:
(a) Business is booming, but leadership holds off on hiring because they believe the boom won't last forever.
(b) Business is booming, so leadership hires to support the boom. The boom eventually subsides, so leadership decides to lay off as the business is no longer there.
Fortunately, even as an employee, I'd much rather have (b) (assuming the timeframe was relatively decent, i.e. I didn't get hired and laid off in 3 months).
I've said this before, but in growing industries, I do not believe lay offs are something to fear. I mean, given the desire for experienced engineers and product people, I have no doubt these Uber folks will get snatched up extremely quickly. (and to emphasize, I certainly do NOT believe this is the case with shrinking industries)
So?
They could lie (which is far worse) or say nothing and let people speculate.
A job candidate with solid skills will be able to show their value to employers, and if an employer puts more weight on this quote over a candidate's qualifications then it was a bullet dodged.
Certainly that should be part of it, but the goal is to reduce costs without reducing revenue. Low performers are certainly a cost, but there's only an indirect relationship between job performance rating and revenue.
Good point - didn't think about that at all. Did you mean think before I speak, or Uber?
In any case, yeah, in that respect it is a massively shitty and unnecessary thing to do to employees. They could have easily left it as "re-structuring" without a risk of tainting the reputation of former employees.
> that have mountains of their own money to burn (rather than investors')
I totally agree with everything you're saying. But I'm going to quibble with your phrasing. Apple's cash reserves belong to the shareholders just as much as Uber's funding rounds.
Too many CEOs operate under the mistaken belief that retained earnings is "play money" in the way that paid-in-capital is not. For investors, retained earnings are subject to the same opportunity cost of capital as funds raised by equity or debt.
Its management's responsibility to deliver returns exceeding the firm's weighted-average cost of capital. If they can't do that, then they should return capital to the shareholders, who can then use it an alternative higher-returning venture.
Why would someone whose been tasked with a job that is involved with gathering as much money as possible, be willing and able to just turn that part of their personality off and start giving money to someone else? Why would they do this just because its investor's money rather than customer's money?
Good point. I didn't have that perspective in mind so the wording was off.
My sentiment was that if a company is losing money consistently and egregiously, they are on borrowed time and a borrowed dime in very real terms as the trajectory is towards 0 - but the context is largely psychological. To your point, waste is waste. I agree wasting cash generated from profits is equivalent to wasting it from earnings.
I'd insist there is some practically relevant difference in there though.
Wasting money during a trajectory to bankruptcy creates a narrative of negligence that accelerates failure, while wasting it during a consistently profitable trajectory seems like sub-optimal management. The kind of thing that is theoretically identical, but in the real world of behavioral economics, the former seems more certain due to how easily the trajectory to failure can be estimated. The latter creates a weak narrative because of hidden information - nobody will ever know what "could have been" and so can never quantify how sub-optimal the management was.
E.g. nobody is dragging GE executives out of retirement/the grave to answer for long-term effects of sub-optimal management, and further nobody could prove at the time it was sub-optimal, only hypothesize. On the other hand, everything Elon Musk does at Tesla is torn apart and front page news, because they have a trajectory towards failure a high school student could easily calculate.
So "management's responsibility" to optimally allocate capital is sound in theory, but in the real world of imperfect and outright unknowable information, nobody ever really knows what optimal is. Sub-optimal comes to be expected as normal, but accelerating a trend towards failure is a powerful defining narrative. Somehow this matters.
Alternatively, management could be inclined to not give piles of wealth to people who had zero hand in its creation (shareholders, modulo some employees who also own shares [rounding error]) and use it to pay engineers to do interesting things.
You need 4 things to run a company, in small companies some roles may overlap. In no particular order Workers, customers, management and shareholders/capital. When one gets too much power the company goes rotten. Usually but not always, it’s management.
Shareholders pick the board, board picks CEO. If CEO wants to spend money that his choice until the board gets rid of him.
It's not some sacred pile of cash that 'belongs to investors/shareholders'
I get that this is the normal ideological description of firms post-70s neoliberal whatever, but if that’s true, like why not just say firms suck, we need communism? Like your description makes Pikkety look like an optimist. “The purpose of a firm is to help rich people get money faster than other rich people” logically implies that eventually a small group of rich people will have all the wealth. That’s feudalism. If that’s the goal, let’s start a revolution instead.
Put it this way, if the standard theory of why capitalism beat Soviet communism is that competition created better products etc. none of that requires that the goal of firms is to create better than market average returns to shareholders rather than the goal of firms being a) earn sufficient profit to continue to exist b) benefit consumers c) benefit employees d) benefit shareholders. Yes shareholder would prefer to invest in companies that prioritize them over all else, but why should we the public not say “that’s not an acceptable charter. We don’t want feudalism to happen again, so we are not allowing firms to prioritize shareholders over consumers.”
If the only defense of capitalism is competition, why not market socialism? As in, markets, competition, and entrepreneurship still exist, but all firms must be worker-owned.
Because then you would be forcing everyone to be an equity partner, even if they would rather take a higher salary than share in the risk. Doesn't sound like freedom to me.
Quibble: I don't really see worker-owned firms as a form of socialism, which I understand as the government ownership of the means of production. Worker-owned firms I associate more with distributism.
Worker-owned firms are a great idea, but if that's the only ownership model then you lose some ability to diversify your investments. Everyone's 401k goes poof.
Thinking through this, what are the alternatives? Simple cash reserves are out (because most societies can't seem to shake the tendency towards inflation). Bank savings accounts are a good idea, although impractical in our current society because interest rates are so low.
I agree, but the theory "firms exist to maximize shareholder value" ensures that they will be.
Put it this way: gravity turns space dust into supernovas. Dust is just ever so slightly attracted to other dust, so it accumulates and accumulates, and eventually it becomes so massive that it forms a star.
The theory that firms should beat the market makes money gravitational. A shareholder who beats the market will get more money than other shareholders. Now they have more money that they can use to invest in other market beating schemes, etc. If whether a firm beats the market is random, then some investors will win and some will lose but it all balances out. But if beating the market is not random (and how could it be totally random?) then those with the most money can invest in the best firms faster and more easily than smaller investors and crowd them out. Remember that companies only have a finite number of shares, so not everyone can invest in a winner. If there's even a slight bias towards having more money making it easier to beat the market, then eventually you will get a supernova.
We all understand this on some level. Why is insider trading illegal? Because it makes it trivial to beat the market!
Airbnb seems to do similar things, but has a better business model to support it. I kind of get it from a recruiting standpoint and they probably did need to build some customized software given the scale they have. My guess is they spent far more money trying to conquer rideshare in multiple countries, self driving, and side businesses. At the same time, they did look like they were also developing some pretty low level software that was probably not necessary.
Can someone explain to me what are the technical challenges at Airbnb? They need to handle less requests than the top airlines or hotel booking websites.
Airbnb is a business innovation with a shiny website frontend. But I really don't get all the hype around Airbnb engineering.
>> In contrast to companies like Google, Apple, Microsoft, Amazon etc. that have mountains of their own money to burn (rather than investors') on research and OSS side-projects
You are assuming that these companies are letting engineers to do side-projects that are unrelated to their day to day work?
As far as I know the OSS projects these companies put out are in line what they use internally for day to day work and it is absolutely core to their business.
A side-project isn't by definition irrelevant, and of course by sheer probability the engineers at those companies are, on average, going to create things that are within their area of expertise which is usually related to what the company they work at does :).
The motivations for making software OSS are varied and often strategic. For example software is often open sourced to:
* deliberately commoditize it - to eliminate competition and differentiation in that area / stack layer
* leverage additional (free) testing and development.
* Drive ecosystem / platform adoption
* Literally free up customer budgets to be spent with them, rather than on licensing 3rd party software
* Intangible benefits like community image, employee satisfaction, etc.
* Some combination of above when the software is useful internally, but simply not in a market that the company wants to compete in, or a market worth their time
In any case, the point was that they are "side-projects" from a business perspective in that they cost money but don't generate revenue - the benefits are hard to quantify. Successful, stable companies have much more breathing room for strategic and the "hard to quantify" ROIs than does a company on a trajectory towards bankruptcy. It is kind of like an individual out-of-work engineer with a month's expenses left in the bank choosing to contribute to OSS instead of seeking out paid work. It is not that contributing to OSS is wrong, it is that the priorities in that situation are backwards.
RE: "Nobody is forcing Uber to employ people in California." That is entirely true, but I'm not sure what your point is. My comment is a post-mortem on what led to the layoffs. It is a priori that nobody has forced Uber to do anything that it did...
I have also been impressed by everything they are producing and I'm actually really wondering why do they need all of those new OSS projects. They need to scale but to an order of magnitude lower than most other webscales. None of their application is data heavy
I have said this before but they seem to have a strong "must be built here" culture. You typically see this in highly political environments where engineers are trying to create projects as a career highlight and as a justification for promotion.
While not a "tiny amount of data" Uber's problem seems like one of those embarrassingly parallel ones where partitioning by location is trivial, and accuracy of all the data isn't as important as knowing everyone's location right now. I'd guess any relatively popular MMO deals with similar things under much tighter latency constraints.
Data heavy to me means terabytes of data with potentially multiple dimensions, like Google or Facebook.
Not to say that Uber's problem isn't challenging, but I don't expect that the amount of data is necessarily the problem.
Can't speak for OP, but I'd imagine most of the data in the system is metadata - i.e. very tiny. Sure they're moving a lot of packets, but an entire ride's data could probably fit in 100KB. If they have a million drivers active, what data do they actually need on them? Profile, GPS location, type? Few KB. Keeping the log of all rides probably takes up the most, but still, relatively small. In any case they essentially deal with small, highly compressible metadata.
Think of that vs. a company like Instragram where people are uploading probably terabytes of media content every day, and they have to maintain/host all that content to be served on-demand basically forever. This is probably a low-key reason for pushing "stories" - they get a reprieve by only having to store that for 24 hours. In any case, you're looking at orders of magnitude larger data usage in all aspects.
Or YouTube, with 1000s of hours of video uploaded per minute.
FWIW an Instagram pic, 1080x1080 is around 100kb.
Uber has to do a lot more processing on it's data. I'm sure there are real challenges and the OSS projects from Uber I've seen/remembered on HN seem to be the type one builds because existing tools don't solve the problem well enough for their cases.
In the grand scheme of things it just isn't. 14 million rides a day, giving them a generous 1MB of data per ride, is "only" 14TB, 420TB/month. The data relevant to a ride for the clients like GPS location and ETA can fit into a few bytes...
A single video doorbell can use 200GB / month. With only 10,000 users that is 2 Petabytes of data traffic per month. Not to mention recordings that have to be stored and hosted for streaming later on.
Maybe, but the problem is that in a restructure like this the high performers often leave in protest to the culture problems that a restructure creates and austerity measures.
Often though they don't cull low performers, they give each department a budget or a head count they have to hit. A department made up of high performers will have to cull a high performer to hit budget, a department which is overloaded will become more overloaded and people will quit in response.
In a company the size of Uber a restructure is often a pretty blunt instrument.
I suspect when the economy takes a downturn luxury purchases like this will be the first to go. If I think I might be laid off do I spend 10 dollars to Uber home or walk the 5 blocks and have one less drink? I would personally have one less drink and walk, or take the train/bus... Those 7 dollars Starbucks venti iced white chocolate mochas with 5 shots will slow also.
I wonder about Uber, they have spent lots of money branding and getting everything in place, that they overshot the whole making money aspect and now playing catchup. Problem is, will they reach that balance before they bleed beyond the point that they become vulture targets for another large company to step in, cherry pick what they want and discard the rest.
With all that said, I wonder if maybe Amazon or some self driving car startup steps in and buys them up for a lot less than it would to build that penetration. Can imagine your Amazon owned Uber driver bus picking you up, with half a dozen stops on the way, some people, some packages, doing the rounds. Things change, how will Uber adapt and more so, all those drivers on zero hour contracts, are just as easily laid off and much cheaper as well. Self driving cars are a case of when, not if as so much being done in the field, progress has become a hot competition and slowly getting there.
Uber was very profitable when they just had Uber Black. The problem is they were disrupted themselves by Lyft and had to launch UberX (give Travis credit for launching this before Lyft even though it was their idea).
Are you sure?
In the recent book about Uber written by Mike Isaac,the author stated that Lyft was the first to launch a low cost ride service with non professional drivers and Uber rushed to copy them.
I read the book last weekend and am going with my memory (I’ve since lent it out). In the book Travis found out about Lyft’s planned rideshare service and raced to launch UberX first.
Alas google has become useless for finding useful information so I hope somebody who still has the book can confirm.
Sidecar was the first service I remember that explicitly used the current UberX/Lyft business model when all these companies kicked off in SF. Back then your payment to your Lyft driver was still called a “donation” because it was originally intended as a carpooling app like what WaZe has now.
> Self driving cars are a case of when, not if as so much being done in the field, progress has become a hot competition and slowly getting there.
My skepticism of self driving vehicles in general is in desert climates. I really want to see a self driving taxi the day after a blizzard in Chicago (or elsewhere in the upper midwest... or even NYC when there's a good storm) where on some streets two lanes in each direction become one, and intersections can become "well, I'm not stoping because the car isn't stoping, thankfully the other drivers understand this and aren't asserting right of way when things are slippery". Some roads are closed and the smart drivers are happily driving 20 under the speed limit on the highway behind a snow plow.
Until then, self driving really strikes me as more of a California or summer time thing.
> Snowy conditions are a serious challenge for the laser-based Lidar and other sensors that self-driving cars use to see objects in their path. Waymo said it’ll start working to overcome weather issues in Detroit’s notoriously tough winter months.
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[ 3.0 ms ] story [ 268 ms ] thread[1]: https://www.chicagotribune.com/business/ct-biz-uber-hiring-o...
On the database side, there's a place in my city that has some permanent bad data in the db so that it won't allow anyone to get picked up or taken there. I go there frequently by Uber and have to set the pin a few blocks away from the corrupted area then explain to the driver where I am or where I am going. It's like there's a ghost car attached to that place because every time I try to get a ride from there, it says it's finding me a ride, followed by an error message that the driver is unavailable. Had a painful back-and-forth with support about this and of course nothing every got done.
While the Android app is of poor quality and no one is rushing to fix it, Uber engineers are busy putting out open source software and plenty of it. Talk about resource mismanagement!
1: https://www.nbcdfw.com/news/local/Dallas-Leaders-Approve-Abo...
I still see zero reason a company like Uber should be based in San Francisco. We landed a man on the moon with parts built all over the United States, so it's not "that's where the talent is".
It's exceptionally difficult to get investment money if a tech company isn't located in the Bay Area or Seattle.
With Uber, it could be either one, but I certainly don't think it's just run-of-the-mill 'marketing speak'.
edit: After reading a few different articles it seems like every article says a different story about how much space Uber is committing to, so maybe you're right, it does sound a little wishy-washy.
It's really so tone deaf to have recruiters to be talking about their unique culture and rapid growth right after HQ lays off hundreds of people.
Wow
EDIT: Did I say I believe there's a recession coming? No. I said (accurately) that there are growing FEARS of one. There's definitely tightening of investments and capital happening.
Recessions happen on a somewhat consistent cycle (https://en.wikipedia.org/wiki/Business_cycle, https://en.wikipedia.org/wiki/Lists_of_recessions); people would be less fearful if they were better prepared for their inevitability. Antifragility would be a good concept to be familiar with.
The broader discussions within the markets are that one is on the horizon. I'm not so confident.
435 people, especially engineers, is no small sum of money.
That's how.
Are they getting rid of under performers and getting new blood or are they cutting people from certain departments (in which case, they could apply to be rehired in another division?)
Many companies, certainly Uber as well, do smaller force reductions where the employees have ~60 days to find an internal role, after which they're laid off. It sounds like the same thing, but, it allows you to possibly keep the employees.
Now take away the one-time IPO expense of $3.9B, and we're not even close to being true. Further take away the $300M "IPO driver appreciation award" and you end up with a $1B loss for three months ending June 2019. In other words, the quarterly R&D spend is over three times the size of the quarterly loss.
https://investor.uber.com/news-events/news/press-release-det...
Of the $3.95B total stock expense, $2.56B was from R&D, which suggests cash cost that quarter was more like $910m (still a lot!)
OP's inference that Uber's quarterly loss is more than double Uber's quarterly R&D costs in general shouldn't be propped up by a moment in time observation.
Uber is in a precarious position and I can't help but wonder what would be different if Travis Kalanick were still in charge. I know it might be an unpopular opinion, but I think his leadership and vision were really instrumental to Uber's early success.
I don't think that's an unpopular opinion at all.
Never heard someone say otherwise.
EDIT: From the the downvotes I can tell I am wrong.
Please help educate me: Honest question: Who or what was "really instrumental to Uber's early success"?
Using VC funding to bankroll an unprofitable business model, undercutting existing industry players who didn't have multiple billion dollar rocket boosters, mostly. Ignoring laws and other unethical practices no doubt helped.
The on-demand rides industry (Lyft, Uber, et al) managed to not only lower pricing, but also bring Karma (bi-lateral user ratings) to the whole industry so that a driver can't just say "fuck you" to a passenger without consequence (nor could the passenger to the driver). If this didn't improve the world, I'm not sure what does.
Their fixed costs are servers and engineering. If they set their prices higher than what drivers are willing to accept they should make money.
I don’t see how “basic economics” is the enemy. Their enemy is setting expectations too high. If they were happy with a profit of $100M a year they would be sustainable forever.
If they raise prices then quantity of rides will go down. If quantity of rides goes down, it becomes harder to earn a living as a driver. If it is harder to earn a living as a driver, there are fewer drivers. If there are fewer drivers, then the cost of drivers goes up.
Not to mention the fact that if uber becomes 10% more expensive a large chunk of those customers will just go to lyft.
A driver only gets paid if a passenger rides. If Uber increases the costs of their rides over a competitor, the the customers will opt to the competition.
Uber will see their margin squeezed down to nothing because they add nothing of value to the transaction: Any random cab company can buy a dispatch app.
That is actually the case in many markets - in Russia local city cab companies all have their apps, so you have three-four installed and you're good to go. And Russian Uber (aka Yandex.Taxi) is here as well
Because if anyone can be a taxi anytime (aka open market), then you get a race to the bottom, both in quality and availability. Then there isn't a steady supply and a lot of collateral problems (accidents, crime, etc). The solution a century ago was to regulate: limited number of taxis and minimum driver qualifications. In the days before apps and routing, it meant that there were taxis available most of the time, except for maybe at peak times.
My point is that taxis are an extremely good example of why you need regulation. Uber and Lyft will succeed to the point they can replace that regulation (cheap enough fares, good enough cars and drivers).
You could also argue that Uber and Lyft are controlling the taxi market because they don't let drivers set their own fare. From the point of view of the driver, taxi-driving is an Uber-Lyft-sanctioned cartel right now.
The cost structure of any urban car service company has four components: vehicle costs (typically 18 percent of total, including acquisition, financing, maintenance, and licensing), corporate costs (15 percent, including dispatching, advertising, overhead functions such as IT and legal, and returns to shareholders), fuel (9 percent), and driver compensation (58 percent, including benefits).5
Uber’s business model shifts the vehicle costs (ownership, maintenance, insurance) that traditional companies used to incur to its “independent contractor” drivers. Passenger fares need to cover total (Uber plus driver) costs. But shifting the burden of vehicle costs and financing onto drivers makes those costs higher, since hundreds of thousands of drivers with limited capital and business experience cannot possibly manage these costs as well as even a typical traditional cab company. Traditional cab companies also have much lower corporate costs, as they avoid Uber’s huge expenditures in areas like political lobbying, global branding, IT development, big corporate headquarters, etc.
Uber should also have higher driver costs than traditional operators, because the huge increase in the demand for drivers should have improved wages, benefits, and working conditions. As will be discussed below, however, Uber initially offered incentives that increased its driver costs, but since 2015 has suppressed take-home pay to minimum wage levels. This exercise of artificial market power cannot be considered an Uber efficiency or productivity advantage.
===== On Structural Problems:
Far from revolutionizing the future of transportation, Uber has not solved any of the industry’s long-standing structural problems.
Most taxi demand is low-income; higher fares would shrink traffic and reduce utilization. Taxi demand is sociologically bipolar: 55 percent of demand comes from people earning less than $40,000 per year while 35 percent comes from people earning more than $100,000.10 Demand from lower-income people is driven by access to jobs in areas (or at times of day) when transit service is poor or nonexistent. Given the current income distribution of riders, any attempt to balance supply and demand will either drive lower-income passengers out of the market or result in wealthy customers being charged less than they might be willing to pay. Uber does not have the lower cost structure needed to improve service while keeping fares low, and apparently realizes that only a small portion of the market is willing to pay fares that would cover the true cost of its service. Higher prices would also reduce vehicle utilization and destroy any notion that Uber’s business has exceptional growth potential.
Uneven geographic demand creates unavoidable empty backhaul costs. Taxi demand, as with demand for every other form of urban transport, has extreme temporal and geographic peaks. Most cities have a dense core area where taxi demand is highest, and taxis operating within that zone can maintain reasonably high daily utilization. But the true cost of trips to neighborhoods outside that zone can be as much as twice normal trip costs since they will have an empty backhaul. Low-income neighborhoods receive poor taxi service because drivers rationally avoid trips where they won’t find a return fare. Uber does nothing to create new demand that can fill those empty seats, and has no way to vary fares based on backhaul utilization. People expect that the fare to the airport should be roughly the same at 6 a.m. (when the cab will return empty) as at 4 p.m. (when return fares are queued up).
Extremely high cost of peak capacity. Peak taxi demand occurs during the late evening, especially on Friday and Saturday nights. As with rush-hour transit and expressway peaks, the cost of the capacity needed to serve peak demand is four to five times the cost of serving demand on Tuesday morning. Cab companies cannot afford to provi...
Otherwise, yeah, Uber did fundamentally improve both productivity and service quality vs. traditional cab companies. Mobile apps are an obvious service quality improvement (predictable waiting times, ease of finding cabs in remote locations, ease of payment), and allow Uber to provide the same level of service (i.e. availability / waiting times) as traditional cab companies, but with less drivers (since a user doesn't need to actually see a cab in order to hail it).
All other issues apply equally to cab companies - e.g. empty backhaul costs, cost of peak capacity, bimodal income distribution of users - except that Uber does, or at least could, solve them better with technological means - e.g. Uber Pool and Uber Eats for backhaul costs, automated and/or predictable surcharge for peak capacity issues, Uber Black to target richer users.
Overcapacity risk: in some locations, cabs were practically unlimited (e.g. Slovenia) so this existed before, in other locations limits were either because of monopoly (e.g. NYC) or skills (e.g. London), both of which Uber improves - breaking monopoly lowers prices for users (without decreasing driver wages, simply by destroying the profits of rent-seeking medalion owners), and there's no need to know every street of London in the era of Google Maps (and I definitely don't want to pay for it).
So, let's not kid ourselves - Uber is strictly better than what was before, and given its global availability, it also has a moat (when you land in city X, are you gonna load and set up local taxi cab that you don't know or trust, or just use Uber?), though there are still some regulatory / monopoly issues (e.g. in London Uber can't use bus lanes, whereas black cabs can). But I want to take Uber whenever I can and I want London cabs to die in fire.
(Having said that, I'm short on Uber as I think it's overvalued - but that doesn't mean without value. Also, I'm not against regulation - cities could improve relevant regulation e.g. preventing Uber from lying about surcharges, driver availability / location and preventing drivers from cancelling rides, but most cities choose to instead serve entrenched interests by (attempting to, yet fortunately often failing) enforcing monopolies.)
TL;DR: quoted part of article is mostly wrong.
This was true when they started and not really true today. There are many taxi companies with proper licenses and full time employees using the same app model as Uber. Taxify (nowadays Bolt) is one example.
https://en.wikipedia.org/wiki/Bolt_(company)
As someone who used call cabs in various Polish towns and suburbs since early 2000s, is claiming this was particularly bad is short memory or is the US bad at not just mass transit but also taxi service? I could get a cab within 15 minutes pretty much in any agglomeration, and even close suburbs. I didn't even need an app.
...I had that happen _once_, and:
> at least they tell you immediately if the driver cancels.
...exactly that happened. Amazing, it's like they ask you for your phone number for a reason. This wasn't much of a problem pretty much since cell phones became a mainstay. I am not sure how Uber improves on that, guesses from the travel path that the driver gave up even if the driver decides not to report?
With cabs, you're expecting a cabby to call to dispatch that they're not picking you up. A cabby can easily be on the way to pick you up, find someone on the way and never let you know. That's a big difference in both what's possible, and what the reality is: cabbies never let you know if they're not coming in my experience. That said, many cab companies have an app now.
...what? That sounds really unlikely.
> cabbies never let you know if they're not coming in my experience.
Well, that's opposite of mine.
Even if Uber isn't operating with more efficiency right now due to R&D and global expansion, there's no reason why they can't be given that they aren't operated by a guy on a telephone manually dispatching cars.
"Nearly impossible" is a simultaneously weak and strong claim. Let's try to break it down.
It may be useful to distinguish between shared rides and people using Lyft / Uber / X for a single group riding to a single destination. If there are stats on the distribution of number of parties in a single trip for the major providers, that would be a helpful stat. My anecdotal experience is that most rides I've taken and that I've seen others take are not shared, particularly for those on the higher end of the willingness-to-pay spectrum mentioned in the article. (If you're on your way to an important meeting, do you really want to throw in the variability of maybe picking up someone else along the route?) I don't think Lyft and Uber are perceived primarily as shared-ride services -- they originated as alternatives to single-party, single-destination rides. IOW, as direct alternatives to existing taxi service.
In terms of efficiency, please look at the breakdown of costs in the article -- I even excerpted some of those here. The cost of dispatch is actually quite low among the components of costs to run an urban hail-ride fleet. Look at Uber's R&D costs and, even amortized over the anticipated rides, and compare that to "a guy on a telephone." One fully-loaded Uber engineer's salary would pay for tens of full-time dispatchers in N. Amer. / European cities and hundreds of dispatchers where labor costs are lower. Similarly, the costs of fleet operations in terms of cars are going to be higher. Do you think "some driver with an app" can maintain and utilize a vehicle better than a taxi fleet, which can run the car 24/7 and have centralized maintenance facilities and bulk discounts on supplies and fuel? Efficiency considerations need to take into account both the costs and benefits. I think one of the points the article is trying to make is that Uber has been hiding these costs or relying on subsidies from private investors until recently.
One of the broader points the article attempts to make is that urban ride-hail fleets have attempted to optimize for things other than the pure efficiency of the rides. For example, they optimize for serving otherwise underserved areas (where some taxis won't go or won't take you because they're concerned about the unpaid backhaul). They optimize for some driver protections. I think it's useful to consider what is going into any definition of "efficiency." Is it utilization time of the vehicle? (This doesn't account for number of passengers served if the rides are longer because the rides are in suburbs rather than dense urban cores. It also doesn't account for taxis being utilized 24/7 while a privately-operated Uber maybe is operated 14 or so hours / day -- if the driver is willing to push the margins of safety and sanity.) The number of rides per hour? The time it takes per unit of distance? (On that last point, there's some evidence that the rise of uncapped ride-hailing services in urban cores has led to significant traffic increases s.t. it's actually slower to get around now in dense cities precisely because of Uber.) The article attempts to call attention to some of these other possible dimensions of optimization. Depending on which dimensions are optimized and the transportation network, it is entirely possible for "a guy on a telephone" to be more efficient. And questions of fairness -- for drivers, for pedestrians and mass transit riders, and for others -- will be affected by that choice of optimization.
Uber could be profitable at higher prices. But would we just be left with a higher-priced taxi service that significantly decreased fairness?
Incredible leader, amazing CEO with the raw ability to move mountains for the company's growth.
Remarkably bad at human and helping humankind.
If burning the Amazon rainforest helped Uber's goals he would have it torched in the most efficient and rapid method possible by morning light. Perfect CEO for the shareholders and maybe for keeping the lights on, not so much for the rest of us.
Perhaps to a fault. He seemed to be so singularly focused on increasing revenue that, when it became clear that people would line up around the block to buy crisp new dollar bills for $0.75 apiece, he didn't hesitate for a second.
I would say that the way how Uber aggressively expanded throughout the world has massively helped humankind. Because of Uber, many countries have changed their taxi laws, and many local competitors have sprouted up. More efficient taxi and ride-sharing services help save the environment and make cities nicer. Of course this is quite theoretical but I believe Uber was the needed company to push the mass transit development forward.
(More empty cars cruising around)
If you're going to do a full accounting of all the costs of all those additional cars on the road, and all that additional congestion, then rideshare doesn't come out looking so rosy.
I hope!
However, that doesn't mean he should still be CEO. Kalanick also created a company culture that became more and more toxic as it grew larger. Lyft was arguably on the ropes and might've failed without the #DeleteUber movement caused by all of the Uber scandals. Without Lyft for competition Uber might actually have the pricing power to be profitable now, but as it stands I'm not sure how viable they are in the long-term.
Uber’s corporate culture was ugly and toxic from the start. And it never got better or “came around” to a good cause. A better analogy would be Anakin moving from small-time massacres of Sand People to blowing up planets as Vader. The scale changed, but it was still evil all along.
I think it’s misleading to defend Travis as some misunderstood scoundrel whose enabling of sexual harassment didn’t “scale”. He’s just a shitty person who initially had less power to be shitty.
The Old Republic was flawed, but disruption in this manner was clearly a step towards a new, shittier status quo. Disrupting something and making it worse doesn’t make him a hero.
Disrupting something and making it worse doesn’t make him a hero.
Put it this way: I am posting this on a thread about Uber ;-)
The moral is, multiple things can be true.
When one side escalates to that point, and the other side takes away their weapon of escalation, it's false equivalency to try to equate the two.
You can have two different comedians tell identical jokes, word for word, and only one of them will be funny. Jim Jefferies does an entire bit about a journalist who reviews his jokes harshly after transcribing them to text. His conclusion is (paraphrasing) "my entire job is to say offensive things while still being likable."
This is with regards to businesses only, though. With people, it’s flipped. Poor? Bad behavior is vilified. Rich? Bad behavior is justified.
(Just an observation of a weird social phenomenon, without agenda).
If you do the same as the director of FBI, _excuse me_, Lord of the Sith, things are quite different.
Edit: but also, Uber and Kalanick were never small fries. So that's where it breaks down.
* Fire people from department X.
* Hire people for department X.
* And sell it as "lean, exceptionally high-performing teams, with clear mandates and the ability to execute faster than our competitors".
LOL
1k people to run the show in the main headquarters + some small-ish ~50-100 people regional offices should be enough to keep the company running.
I'm not going to try and give an exhaustive list, but as a rough explanation: things get really, really hard when you're operating at Uber scale (hundreds of thousands of riders on trip at any one time, each demanding low latency and reliability):
- Product: native clients for each side of the marketplace in each vertical (rides, eats, freight, atg, et al), maps, localization for every country with a presence (not just language, but tax, legal, hundreds of region-specific modes e.g.: tuk tuks)
- Infrastructure: hardware teams to build on-prem DCs (cloud can get very expensive at scale), software networking to deal with said low-latency traffic, storage to optimize for reliability/latency/cost, observability (metrics, logging, alerting, tracing), security, et al
- Data: insights, operational support, routing, et al
- ATG
Hope that gives a better idea.
VMware for example, assuming they don't use ProxMox lol, is super expensive, hardware maintenance, network, power, building, etc.
I still feel like this is a ridiculous amount of workers when one takes into account that the product they're offering is essentially a smartphone app with a backend service that pairs drivers and customers, which regular cab markets do without almost a single person.
To me Uber feels like some sort of soviet-era experiment of replacing a market with someone micromanaging cars
It's like saying Microsoft Office is "just an app that writes documents" or that GMail is "just an email client."
Uber and Lyft do a whole lot more than what you described on the scale of millions of concurrent users in dozens of countries.
Your comparison to a taxi isn't really a great one because you see taxis sitting around on curbs and driving around empty looking for a passengers all the time. A lot of the cost of a taxi is you paying for idle time.
which is my point. There's no use in engineering and coordinating something that organises itself. The utility of a centrally managed service needs to be balanced against the resources it costs to run the operation.
Taxis actually don't spent as much time sitting around as you think, traffic organises quite spontaneously, drivers know where to wait and downtime is usually quite low. Which is why it is so difficult for Uber to make a profit, the efficiency gains compared to the engineering effort that goes into them are miniscule, which is the disease of all centrally managed systems. The Soviet planning buro managed millions of factories which sounds impressive, it doesn't mean that they were any good at it.
If Uber would realise such huge efficiency gains in organising rides the result would either be higher wages than taxi companies or lower prices, which would make them instantly profitable, no billions of subsidies required.
I work in a big organization of over 1K people and although most people work extremely hard, I still don't see how most of what we do helps the company enough to warrant a decent ROI.
27k does sound like a lot, but your figures seem arbitrary if you've never looked at their internal software, operations, what's being developed that we don't know about, etc.
Moreover, hiring a long-term employee today versus tomorrow might save money for a place like Google, assuming we expect competition and wages to continue to increase.
It strikes me that if Uber is laying off software engineers, their company outlook must be very, very dire. A layoff is perhaps better strategy than firing the bottom 5%, which would likely preclude the departed from re-joining at a better time. But probably the wrong message to send to a cohort like software engineers-- a layoff is a legal confirmation that the company made a big mistake.
(edit: sorry, see below too)
If anything, Uber has invested in too much tech for the sake of being tech heavy, which may not be best suited for their business (outside self-driving, which needs heavy tech investment).
Edit: By not that far away I'm talking 5-15 years. I'm not talking next week. Amazon burned cash for at least 20 years.
[Citation needed]
I wasn't referring to Uber's technology specifically, only that self-driving cars are what is required to make Uber as successful as they hope to be.
That's a pretty optimistic view; many people don't seem to share it.
But remember that there is a lot of value between "no computer on board" and "fully self-driving". Cars already have things like lane assist technology, smarter cruising technology, collision avoidance, software to help maintain distance between the car ahead of you, smarter breaking, better mapping and routing technology.
These are valuable features that can generate revenue even if fully automated self-driving cars never happen, or happen in 100 years. These are also features that can help older drivers with slower reaction times stay behind the wheel and keep driving, thus increasing the number of human drivers.
Alphabet was to more cleanly separate (in branding and organizationally) the core Google business from other ventures, which moved the moonshots out of Google proper. It wasn't to kill moonshots, though it may be accurate to say it was in part about being better at maturing them.
This assumes drivers that correctly allocate the source of maintenance costs among all uses of the vehicle in assessing cost/benefit of driving for Uber.
So, it assumes no new supply of drivers misjudging costs, and no drivers with multiple income streams that fail to recognize the source of maintenance costs and that Uber is losing money.
It's basically a “no one will buy lottery tickets or engage in other less-than-break-even gambling for non-entertainment purposes” argument, except that gambling venues are usually required to publish their net payout stats, while Uber isn't.
That is basically code word for political fiefdoms seizing power.
No cloud-hosted or SaaS company should allow silos or redundancy around communal services.
This is long overdue and Dara is making the right move to clean up.
But to your point.... should the Engineers be reallocated to a bench until properly utilized? Yes. Moves like this can be poisonous to culture long-term.
I doubt that. Uber's place in the market is very much theirs to lose. It's more reasonable to think that this is the market for software engineers in SV/SF starting to correct itself.
https://news.ycombinator.com/item?id=20558490
Edit: Guess not, that initial group was just marketing. From the article:
>These layoffs come shortly after Uber laid off 400 people from its marketing team.
"...create 3,000 full-time jobs and pay employees an average salary of at least $100,000..."
Considering the lower cost to operate in TX it would make sense to move IT roles to that area.
https://www.dallasnews.com/business/technology/2019/08/09/ub...
>The office would include engineers, finance executives, salespeople and other roles across Uber's business.
This directly quoted an Uber exec saying that it will be focused on HR, sales, and ops
That said, getting laid off like this would be much harder to bounce back from if you were not in a tech hub.
¯\_(ツ)_/¯
Interesting. This hit seems to be mostly localized to the US. During their last mass layoff in July, employees from all over the world were affected.
[1] https://www.reddit.com/r/dataisbeautiful/comments/cwutan/oc_...
In contrast to companies like Google, Apple, Microsoft, Amazon etc. that have mountains of their own money to burn (rather than investors') on research and OSS side-projects, it always seemed to me that Uber was trying to play the same game, but far too early. Paying lavish SF engineer salaries to generate cool, but not revenue generating, software is probably excellent for morale, culture and recruiting, but a dubious use of resources when you are losing money seemingly faster than it would be logistically possible to literally burn it.
Saying they're ~ "culling the low performers" can be entirely true, but it is also a Silicon Valley, meritocracy-culture-friendly way of saying "we're losing far too much money to pay bloated growth-stage poaching-game salaries to engineers, so if you're not working on something that generates revenue, glhf"
You're not just flipping the public/private flag on the repo.
If it helps you attract better talent, well - there's a financial incentive there through increased efficiency which I'm sure on its own is more than equal to the review cost.
Depending on context, sure this could be true. Like if you're comparing the cost of releasing some small OSS module of Uber's to Uber's annual revenue, sure, it's going to be a negligible cost. But if you compare against the cost of developing the module in the first place, it can easily be an equal expense. For example I spent several months on a BLE library for Android (https://github.com/iDevicesInc/SweetBlue) and asked my company to open source it. It took several more months to get the library to a point that was suitable for a proper OSS release. So cleaning up code, making sure no sensitive info, swear words and such, documentation, lawyery stuff, icons, PR copy, blog post, basic website, wiki, and much more nitty gritty I'm glossing over.
I mean a company can just throw code over the wall into GitHub and call it OSS, but I associate a basic level of polish with a proper OSS release that does indeed take a good amount of effort. And that's just initial effort! If it becomes at all popular then you have further ongoing overhead.
I'd say a general rule is that open-sourcing something is at least 50% of overall cost of the project.
I'm the manager of one of Uber's OSS projects, and all that the things you listed here ring true. I just know that in our case at least, OSS prep absolutely pales in comparison to the feature/operational work put in by the team.
To be clear, when I added "really" to that first sentence it was meant to communicate that there is some cost, but in the sense that it's negligible to Uber's losses, as you point out. I was responding to OP's "dubious use of resources" comment. But I can see that wasn't clear.
Do you expect to still be doing this same job (or one step higher) in 6 months?
THIS is the one that comes into play. All that stuff you listed before is a slog to go through when you go to open-source, but unless you're parking the thing as a proof-of-concept/end-of-life, you're now signed up for maintaining the repo. That means triaging issues, pull requests, helping out when contributors don't understand why their build is breaking, etc.
And there's the PM aspect of it: you don't just want to develop a bunch of features without talking to your community, so communicating (in a public friendly way) what you're planning to work on, when folks might reasonably expect that, how they might be able to help out, which of their contributed features you might be able to take depending on where you're at in your lifecycle, and RESPONDING TO COMMENTS all takes way more time than just "building [closed-source] product" in a team of 5-20.
And of course, one of the hardest of all: telling people "no, we can't take that change" when they've spent hours and hours doing work for your project for free. In that regard, we're still very much iterating on a transparent design process that allows for consensus BEFORE too much work has been done (though as we all know, building prototypes is often one of the best ways to find out if a design works right or not).
If you're doing it all right, everyone involved in the project should be doing some amount of all of this every single day. There's no compartmentalizing an engineer on an OSS project as "someone who just writes feature code" vs. "someone who does the repo stuff".
So going back to OP's point: no, it doesn't literally "cost anything" (or very much) to do the basic act of open-sourcing, doing it the "right way" at scale where you're truly engaging and working with the bazaar is very expensive.
Full disclosure: I'm a PM at Microsoft working on PowerShell and was heavily involved in it being open-sourced and ported to macOS/Linux.
But also, lots of folks prefer an object-oriented pipeline. Many of those folks (our primary use case for 10+ years has been IT management) are used to PowerShell on Windows and starting to learn or be exposed to other environments.
We've also got lots zsh-style optimizations in PSReadline. In some cases, we've got some catching up to do, but there's also lots of unique interactive optimizations hiding around[2].
It's also great for interactively exploring REST APIs and building scripts via that experimentation. Try running
Invoke-RestMethod [or irm] https://api.github.com/.
Store that as a variable:
$a = irm https://api.github.com
And then look at all the properties you can explore:
$a | Get-Member [or gm] $a.<tab><tab><tab>
Oh, and of course, one of the big reasons is "so you don't have to open a Windows VM to remote into your Windows Server boxes and manage them from a Macbook".
This is obviously not an exhaustive list, but it'd take a lot more time to write about every benefit and scenario here. In any case, it turns out that our user base is pretty spread out among different scenarios, but between our repo and usage numbers, we've been really happy with how excited that such a diverse group of folks really love PowerShell.
And feel free to reach out to me on Twitter @joeyaiello if you ever want to talk more about your experience (or just hop into our GitHub repo). :)
[1] https://aka.ms/PSGitHubBI [2] https://docs.microsoft.com/en-us/powershell/module/psreadlin...
Yes, it costs next to nothing to just open source a project if you mean literally just putting the source on some hosting site.
However, open sourcing something properly, where you respond to issues, document things properly, and provide build/test infrastructure to external developers is much more work. Not only that but you have to be much more careful when creating APIs and be much more vigilant about keeping backwards compatibility.
If the presumption is that the software would be useful ("developed for a reason") economics suggests there is some price people would be willing to pay for it, and you forfeit that when you make it OSS. That absolutely costs something.
Sure you may not want to be in the business of commercial software (support, maintenance, ultimately just responsibility) which is a completely sane thing to avoid. However when you are bleeding money at the rate of a small country's GDP per year, avoiding opportunities to generate profit based on intangibles like community engagement can come off as ill-advised. In fact, if your company is declared bloated, it stands to reason that you should have the capacity to take on the additional overhead of selling the software. It is not that contributing to OSS is wrong, or that your points are wrong, just that there is a time and situation for this kind of strategy.
Contrast with Amazon, whose entire development of AWS was for the reasons you point out. Instead of open-sourcing it, to the extent that would be possible, they made it into a product and almost in a single move turned consistent overall loss into a massively profitable company.
So this is not at all to argue against the merits of having healthy OSS contribution at a company, but more to say that a company can't contribute to OSS if they are bankrupt - so avoiding the latter should be prioritized over the former.
Even if it isn't they have just branded everybody with 'Uber' on their CV that is on the market a low performer. Think before you speak.
Why would you do that vs moving the high performers to the business critical projects?
In the first case, you're losing team members with tribal knowledge of the system and its requirements. In the second case, you're exponentially increasing the pathways of communication. In either case, you still have the ramp-up time for new team members.
I'm implying that rather than laying off top performers you find them a different role in your organization.
Granted if the skill set is incredibly niche--such as hand optimizing HC12 assembly and you've moved to ARM then perhaps not.
It's hard to imagine a scenario where an entire project teams skillset is so niche that they couldn't find a home for top developers in other parts of the org.
_Why haven't you already done that?_
Nobody likes low-performers, even when you're flush with cash. Fixing their mistakes is demoralizing for your high-performers. The word gets around that you have low standards, and it's hard to recruit.
The only way to get your money's worth from them is to put them in death marches and grind them down until they burn out and quit.
I am always extremely suspicious of claims that a company is going to lay off its poor performers and magically be better. If they're telling the truth, they are actually saying that their existing managers are incompetent.
There's a reason that all tech companies try to brag that they only hire the top performers.
There's a reason that all tech companies try to brag that they only hire the top performers.
Performance of an engineer is relative to his environment. I was a top performer on some teams/projects and a low performer on others.
Even if they ace your hiring process, you still can't know how they'll fit with the team long term.
Another way to think about it is that everyone has some productivity, some contribution to the company’s net progress. If someone’s contribution is negative, they should already have been let go.
If their contribution is less than others, maybe “bottom 10%,” but it is still positive, you may be letting go a relatively poor performer in a round of layoffs, but you’re still shedding a person with a positive contribution.
You are going to be worse off, no matter how you sugar-coat it.
If you define performance as change over time then this would seem to have nothing to do with mistakes. From what I've read about the space shuttle programmers, they would have been classified as low performance (low change over time) but who also made with very few mistakes (as I understand their process). At the other end you could have high performing programmers (lots of change) with high defects that they're always fixing (which could in turn qualify as still more change).
With layoffs you want to apply “cut once” approach or at least as rarely as possible, in batches.
Constant trickle of layoffs is very bad for morale, no matter who is laid off. It is also bad for an external image of management.
For example, closing a plant, or getting out of a line of business. If Uber decides not to have anything more to do with self-driving vehicles, they might lay off everyone in its division.
That would have nothing to do with poor performance on the part of individuals.
On the other hand, there is “These people are underperformers,” which is part of Uber’s allegation as they throw their former employees under the bus rather than take responsibility for their management choices.
I contend that if people are underperformers, a constant trickle of letting such people go is not bad for morale. It’s perfectly normal.
“Did you hear they let Dave go?” “Yeah. What took them so long?” That’s the usual talk.
Whereas, “Did you hear that they shut down ML?” “Yeah, and it was half the database tuning group last month, who’ll be next?” “I dunno, but I’m not hanging around to find out...” is the thing you are describing.
Long story short, I agree that a trickle of layoffs is not good, but I suggest that this is true when the people being let go are not thought of as holding the company back.
I disagree that it doesn’t matter who it is. If they are underperforming in the sense of being bottom 10% but still carrying their costs, I agree with you about trickle, but then we can’t claim that letting them go makes the company stronger.
But if they are underperforming to the extent that letting them go makes the engineering group more effective, then management should have identified them earlier, done everything in its power to make them perform, and let them go if they didn’t improve.
Ignoring net negative employees, or being blind to whether they are net negative, or keeping them around even though they are known to be net negative is bad for the company’s bottom line and bad for its morale.
I agree with your points, but optics might depend on a company. In a startup or smaller company being aware that underperforming employees are let go might actually improve morale. For bigger companies it is a typical situation that you notice or get to know that people from other teams are gone, but you may not be aware of their performance.
> Nobody likes low-performers, even when you're flush with cash. Fixing their mistakes is demoralizing for your high-performers. The word gets around that you have low standards, and it's hard to recruit.
Fixing mistakes is part of development. I am yet to be part of a team that never made a mistake. Mistakes are how we learn and get better.
If the same mistakes repeat, THEN you have a problem but if a single individual is to blame everytime, then it's not the individual's problem - you have a bad team. Your team has failed at teamwork - the primary focus of any team.
If you have a team of dozen engineers making a car, the car does not drive until all the parts are not only in place but they all work well together.
The way to make all parts work well together is to have the designers of the parts communicate and work together, well.
If the engine guy is not talking to the intake and exhaust guys, don't be surprised if there are leaks at best or the engine blows up at worst.
I AM assuming each team member went through an interview process. If the going was tough where you could not interview and had to let just any person in, hopefully this person helped you through the tough times.
What value does the interview process provide if you can't figure out if your candidate is a high-performer or not?
Why did your interview process select a low-performer?
Also, performance is the output of a team - a single person should not be expected to provide high-performance day in and day out.
That's impractical to expect out of a human being. A machine and a person have vastly different characteristics.
If my team is working well, we will have a high performance team. There is no other way to have high performance sustained over a long term.
Each team member needs to actually looking forward to working with each other.
The other extreme is programmers work in these silos and come up with solutions that barely work well with each other and then there's blame game being played.
Why do that nonsense? Save money? No - of course not!
Just work as a team!
> The only way to get your money's worth from them is to put them in death marches and grind them down until they burn out and quit.
I don't follow.
Death marches?
First of all WHY do this at all?
What's wrong with the alternative "Hey, it looks like it's not working out. We will be letting you go and support you in looking for a job elsewhere over the next X days"
At one point in time in the past, you and your team interviewed this person and found them useful - what changed that they are no longer useful?
Was an error in hiring made?
Own up, take responsibility and move on. Make the interview process better.
Did the person expect to get a larger bump come bonus/review time that did not happen and now they are demoralized and upset?
Own up, take responsibility and move on. Clarify better what bumps and bonus would be like and how much effort that would entail next time.
> I am always extremely suspicious of claims that a company is going to lay off its poor performers and magically be better. If they're telling the truth, they are actually saying that their existing managers are incompetent.
I also don't follow this and want to hear more about this perspective.
What happens to the people working in mining, transporting and delivering ice from Iceland to California when refrigerators get invented?
Are those people inherently low performers or has the industry they work for shifted beneath them?
We (developers) work in an area of high specialization and the market values us for it (to the tune of six figures).
I have worked at both product and service companies before where entire departments were laid off because a contract did not get renewed or the market changed.
Most employees AND m...
This is a story for retail that will be buying stock. "We cannot afford X" can be an stock buster.
I completely disagree. Which would you rather have:
(a) Business is booming, but leadership holds off on hiring because they believe the boom won't last forever.
(b) Business is booming, so leadership hires to support the boom. The boom eventually subsides, so leadership decides to lay off as the business is no longer there.
Fortunately, even as an employee, I'd much rather have (b) (assuming the timeframe was relatively decent, i.e. I didn't get hired and laid off in 3 months).
I've said this before, but in growing industries, I do not believe lay offs are something to fear. I mean, given the desire for experienced engineers and product people, I have no doubt these Uber folks will get snatched up extremely quickly. (and to emphasize, I certainly do NOT believe this is the case with shrinking industries)
A job candidate with solid skills will be able to show their value to employers, and if an employer puts more weight on this quote over a candidate's qualifications then it was a bullet dodged.
I generally agree with this, except when the candidate in question needs the money paid from a job more than they need a good job.
Edit: In reality, if someone leaves uber and cannot find a job, and willing to take a bad job just to make money, they are doing something wrong.
In any case, yeah, in that respect it is a massively shitty and unnecessary thing to do to employees. They could have easily left it as "re-structuring" without a risk of tainting the reputation of former employees.
I totally agree with everything you're saying. But I'm going to quibble with your phrasing. Apple's cash reserves belong to the shareholders just as much as Uber's funding rounds.
Too many CEOs operate under the mistaken belief that retained earnings is "play money" in the way that paid-in-capital is not. For investors, retained earnings are subject to the same opportunity cost of capital as funds raised by equity or debt.
Its management's responsibility to deliver returns exceeding the firm's weighted-average cost of capital. If they can't do that, then they should return capital to the shareholders, who can then use it an alternative higher-returning venture.
My sentiment was that if a company is losing money consistently and egregiously, they are on borrowed time and a borrowed dime in very real terms as the trajectory is towards 0 - but the context is largely psychological. To your point, waste is waste. I agree wasting cash generated from profits is equivalent to wasting it from earnings.
I'd insist there is some practically relevant difference in there though.
Wasting money during a trajectory to bankruptcy creates a narrative of negligence that accelerates failure, while wasting it during a consistently profitable trajectory seems like sub-optimal management. The kind of thing that is theoretically identical, but in the real world of behavioral economics, the former seems more certain due to how easily the trajectory to failure can be estimated. The latter creates a weak narrative because of hidden information - nobody will ever know what "could have been" and so can never quantify how sub-optimal the management was.
E.g. nobody is dragging GE executives out of retirement/the grave to answer for long-term effects of sub-optimal management, and further nobody could prove at the time it was sub-optimal, only hypothesize. On the other hand, everything Elon Musk does at Tesla is torn apart and front page news, because they have a trajectory towards failure a high school student could easily calculate.
So "management's responsibility" to optimally allocate capital is sound in theory, but in the real world of imperfect and outright unknowable information, nobody ever really knows what optimal is. Sub-optimal comes to be expected as normal, but accelerating a trend towards failure is a powerful defining narrative. Somehow this matters.
Worker-owned firms are a great idea, but if that's the only ownership model then you lose some ability to diversify your investments. Everyone's 401k goes poof.
Thinking through this, what are the alternatives? Simple cash reserves are out (because most societies can't seem to shake the tendency towards inflation). Bank savings accounts are a good idea, although impractical in our current society because interest rates are so low.
Put it this way: gravity turns space dust into supernovas. Dust is just ever so slightly attracted to other dust, so it accumulates and accumulates, and eventually it becomes so massive that it forms a star.
The theory that firms should beat the market makes money gravitational. A shareholder who beats the market will get more money than other shareholders. Now they have more money that they can use to invest in other market beating schemes, etc. If whether a firm beats the market is random, then some investors will win and some will lose but it all balances out. But if beating the market is not random (and how could it be totally random?) then those with the most money can invest in the best firms faster and more easily than smaller investors and crowd them out. Remember that companies only have a finite number of shares, so not everyone can invest in a winner. If there's even a slight bias towards having more money making it easier to beat the market, then eventually you will get a supernova.
We all understand this on some level. Why is insider trading illegal? Because it makes it trivial to beat the market!
Airbnb is a business innovation with a shiny website frontend. But I really don't get all the hype around Airbnb engineering.
You are assuming that these companies are letting engineers to do side-projects that are unrelated to their day to day work?
As far as I know the OSS projects these companies put out are in line what they use internally for day to day work and it is absolutely core to their business.
Examples:
- Amazon: https://firecracker-microvm.github.io - Google: https://github.com/google/guava - Microsoft: https://github.com/microsoft/vscode - Apple: https://github.com/apple/foundationdb
Am I missing the point? Are OSS projects from these companies that are side-projects?
While on the subject, I am not sure about Uber's contribution to OSS. Their projects tend to be outside of my purview.
>> Paying lavish SF engineer salaries to generate cool, but not revenue generating, software
Nobody is forcing Uber to employ people in California.
The motivations for making software OSS are varied and often strategic. For example software is often open sourced to:
* deliberately commoditize it - to eliminate competition and differentiation in that area / stack layer * leverage additional (free) testing and development. * Drive ecosystem / platform adoption * Literally free up customer budgets to be spent with them, rather than on licensing 3rd party software * Intangible benefits like community image, employee satisfaction, etc. * Some combination of above when the software is useful internally, but simply not in a market that the company wants to compete in, or a market worth their time
In any case, the point was that they are "side-projects" from a business perspective in that they cost money but don't generate revenue - the benefits are hard to quantify. Successful, stable companies have much more breathing room for strategic and the "hard to quantify" ROIs than does a company on a trajectory towards bankruptcy. It is kind of like an individual out-of-work engineer with a month's expenses left in the bank choosing to contribute to OSS instead of seeking out paid work. It is not that contributing to OSS is wrong, it is that the priorities in that situation are backwards.
RE: "Nobody is forcing Uber to employ people in California." That is entirely true, but I'm not sure what your point is. My comment is a post-mortem on what led to the layoffs. It is a priori that nobody has forced Uber to do anything that it did...
I have said this before but they seem to have a strong "must be built here" culture. You typically see this in highly political environments where engineers are trying to create projects as a career highlight and as a justification for promotion.
Really?? They have O(thousands) of drivers in O(hundreds) of cities with the app open, sending and receiving data approximately all day.
What companies in your mind are data heavy?
The "data heavy" businesses often have the ability to cache their data in CDNs. Uber's data is realtime and dynamic, you scale that the hard way.
Data heavy to me means terabytes of data with potentially multiple dimensions, like Google or Facebook.
Not to say that Uber's problem isn't challenging, but I don't expect that the amount of data is necessarily the problem.
Think of that vs. a company like Instragram where people are uploading probably terabytes of media content every day, and they have to maintain/host all that content to be served on-demand basically forever. This is probably a low-key reason for pushing "stories" - they get a reprieve by only having to store that for 24 hours. In any case, you're looking at orders of magnitude larger data usage in all aspects.
Uber gives estimates of when your ride will show up.
They do lots of stuff in fairly real time with that data and a lot of it is probably compute intense.
Not at all comparable to Instagram.
FWIW an Instagram pic, 1080x1080 is around 100kb.
Uber has to do a lot more processing on it's data. I'm sure there are real challenges and the OSS projects from Uber I've seen/remembered on HN seem to be the type one builds because existing tools don't solve the problem well enough for their cases.
https://instagram-press.com/blog/2017/12/05/introducing-stor...
5 billion rides in 2017. That's 14 million a day on average. I would guesstimate peak days have at least double the average.
That is data heavy to me. (-;
https://muchneeded.com/uber-statistics/
A single video doorbell can use 200GB / month. With only 10,000 users that is 2 Petabytes of data traffic per month. Not to mention recordings that have to be stored and hosted for streaming later on.
Everything is relative (-;
Often though they don't cull low performers, they give each department a budget or a head count they have to hit. A department made up of high performers will have to cull a high performer to hit budget, a department which is overloaded will become more overloaded and people will quit in response.
In a company the size of Uber a restructure is often a pretty blunt instrument.
<joke>On the plus side, this may slightly delay the onset of type II diabetes related healthcare expenses!</joke>
With all that said, I wonder if maybe Amazon or some self driving car startup steps in and buys them up for a lot less than it would to build that penetration. Can imagine your Amazon owned Uber driver bus picking you up, with half a dozen stops on the way, some people, some packages, doing the rounds. Things change, how will Uber adapt and more so, all those drivers on zero hour contracts, are just as easily laid off and much cheaper as well. Self driving cars are a case of when, not if as so much being done in the field, progress has become a hot competition and slowly getting there.
Alas google has become useless for finding useful information so I hope somebody who still has the book can confirm.
As others said, Sidecar was technically the first to the "ridesharing" model
Zimride (lyft) started the first rideshare site. Unless you count craigslist ads.
My skepticism of self driving vehicles in general is in desert climates. I really want to see a self driving taxi the day after a blizzard in Chicago (or elsewhere in the upper midwest... or even NYC when there's a good storm) where on some streets two lanes in each direction become one, and intersections can become "well, I'm not stoping because the car isn't stoping, thankfully the other drivers understand this and aren't asserting right of way when things are slippery". Some roads are closed and the smart drivers are happily driving 20 under the speed limit on the highway behind a snow plow.
Until then, self driving really strikes me as more of a California or summer time thing.
They say they're working on it ( https://www.bloomberg.com/news/articles/2019-04-23/alphabet-... )
> Snowy conditions are a serious challenge for the laser-based Lidar and other sensors that self-driving cars use to see objects in their path. Waymo said it’ll start working to overcome weather issues in Detroit’s notoriously tough winter months.
but I'll believe it when I see it.