Home > Uncategorized > Wait for Act II: Über and Lyft Go Down Hard on the Path to Driverless Taxis

Wait for Act II: Über and Lyft Go Down Hard on the Path to Driverless Taxis

May 8, 2016
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The robot in Fritz Lang’s Metropolis

When Harvard’s Kennedy School studies Über and Lyft’s massive failure to pass their self-regulation by ballot measure in Austin, I think they’ll find one fundamental feedback loop from the data.  One measurable result that is probably the biggest fear of sellers of soap everywhere.  One data point that their expensive political consultants like David Plouffe must have known.

The more Über marketed, the less consumers liked them.

That’s right–Über and Lyft outspent Austin’s cobbled together grassroots opposition by 50:1.  And that’s just the expenditures that Über haven’t lied about.  And the big bad boys from Silicon Valley who brought seemingly overwhelming force to bear against a little band of scrappy irregulars ultimately lost.

Sound familiar?  This is Texas, don’t forget.  Unless you’re Über, then by all means, forget.

uber brigid shea

Travis County Commissioner Brigid Shea

And here’s the other data point that I predict will become part of the story in the coming weeks.  Despite their hand wringing about destroying local jobs, the long term plan of these Silicon Valley merchants of “progress” is exactly the destruction of local jobs.  Not just the destruction of driver jobs in Austin, but around the world.  This is not my imagination as you will see, it is the stated policy of both Über, Lyft and their investors.

Remember–this ballot proposition was their deal.  They wanted direct democracy and they got it.  Now they don’t like the result.

The Election Results

First, let’s look at the election results.  The election was about Proposition 1, a ballot initiative that Über and Lyft drafted in order to avoid compliance with existing City of Austin regulations and new regulations duly enacted by the Austin City Council.  As Susan Crawford once said “[On the Internet, w]e could avoid [government].  These people were irrelevant.”

Über and Lyft’s calculation was that having struck out (in their minds) at City Council, they would pass their own version of the law by a direct vote of the people.  Remember that–direct democracy.  We’ll return to that point.

That meant that a vote “For the Ordinance” was a vote for Über and Lyft, and a vote “Against the Ordinance” was a vote against Über and Lyft.

The ballot initiative idea may work some place, but it did not work in Austin as practiced by Über and Lyft.  Über and Lyft lost by nearly 10% of the vote, 55.71% against Über and Lyft to 44.29% for them.

Prop 1 Results

Conspicuous Consumption and Amplifying a Lost Message

But here’s why Über and Lyft failed. They lost control of their message and they then spent millions promoting a message they couldn’t control.  This is what I bet they’ll study at the Kennedy School for decades to come.

Über and Lyft’s Political Action Committee (Ridesharing Works for Austin) spent approximately $10 million on the campaign which was the most expensive political campaign in the history of the City of Austin. And they did it to amplify a message a majority of Austinites did not want to hear to the point that the mismatch in the money–the amplification system–became so obvious that it overwhelmed the message.

Remember–this was their deal.  Über and Lyft chose to go this route.

I think it is fair to say that the magnitude of the expenditures and the disparity of spending is roughly the psychic equivalent to Austinites–that is, to the electorate that Über and Lyft hoped to persuade with whatever they thought their message was–of driving a red Ferrari in Austin.

There are plenty of Austinites who can afford a Ferrari (or even five).  Until very recently, you never saw a Ferrari on the street.  Not saying there were none, you just didn’t see them.  Why?  If you need an explanation of that, you probably would not see anything wrong on its face with outspending the local opposition 50:1 on a city level ballot initiative.

The Oppressive Campaign

The level of spending on Prop 1 will not surprise anyone who followed two other Silicon Valley vs. the people displays–the anti-eviction campaign in San Francisco opposed by pro-eviction technology companies and of course the Google Bus debacle.

 

Google Flyer

Given these benchmarks, Prop 1 was entirely predictable.  These people want to get their way whether it’s their own creature comfort or replacing drivers with robots.  Yes, I said replacing drivers with robots.  We’ll come to that presently.

F Uber

You have to wonder if the smartest guys in the room, i.e., Über (backed by Google) and Lyft (backed by General Motors) and their high powered and expensive campaign consultants starting with David Plouffe, ever asked themselves why no corporation had ever mounted a public messaging campaign of this magnitude before?  Maybe because their market research told them it wouldn’t produce the desired result?

I’d go further to speculate that no corporation has ever done this before–anywhere. Except maybe the British East India Company or United Fruit.

In case you were wondering what the campaign looked like, here’s a couple of screenshots from the websites of Austin’s two leading newspapers, the Austin Chronicle and the Austin American Statesman.  Both newspapers opposed Prop 1, i.e., were quite strongly against Über and Lyft, but both newspapers also made the mistake of allowing Google Ad Services to control the advertising inventory on their respective home pages on Election Day.

Here’s the Statesman‘s Election Day homepage.  Notice the interactive “Vote For Prop 1 Today” ads.  Note the banner ad did not rotate.

Statesman Uber

And here’s the Chronicle’s Election Day homepage with the identical ads by Google:

8 million uber

The Chronicle’s homepage had the Chronicle’s endorsement on the homepage in the ad in the red box above.

Since Google served ads to both pages and at least broadly could control what ads were served where, it’s logical to deduce that the Chronicle either didn’t notice that it’s own editorial policy was being crowded out by homepage advertising (hard to believe), neither the Chronicle nor the Statesman had control over the ads that appeared on the respective homepages (possible), or (more likely) did not want to get into a public spat with Google to try to stop Google serving those ads.  Especially since Google invested $238 million into Über and are likely to (a) ignore the request and (b) say they can’t control the ads.

And then there were the mailers:

prop 1 mailers

Not to mention the yard signs.  I have a theory of elections based on yard signs.  When I start seeing things like this, I start getting the idea that there’s something serious happening:

Uber Yardsigns

Now What?

Mayor Steve Adler was quick to offer a conciliatory hand to Über and Lyft and expressed a willingness “to go back to the table”.  That’s interesting, seeing as how Über and Lyft never wanted to be “at the table”–that’s why they fielded their own regulations in a ballot initiative in the first place, and spent 50 times what their opponents spent on the Prop 1 campaign.

Not only did they not want to be at the table, Über and Lyft employed and still are employing brinksmanship tactics that we are used to seeing from real estate developers, other multinational corporations and strike breaking lockouts.  Both companies have said they’ll leave Austin on Monday, and I expect they will.  (Of course,  Über have been hit with a class action lawsuit in federal court in Austin asserting violations of the federal Telephone Consumer Protection Act, not to mention spamming laws.  So gone but not forgotten.)

The election results are going to be passed off in the grand style of Google’s relentless attack on the music business in general and artists in particular, what I call the Metallicaization of all who oppose the Borg.  You know–resistance is futile.  This is going to come in two flavors: political and modernity.

The political attack has already begun and is best summarized by George P. Bush (Texas Land Commissioner) in a Tweet:

Bush Tweet

Forgive me, but that is just a dumbass thing to say, mostly because it’s circular.  The point is that Über and Lyft wanted the people to vote, the people voted and the corporations lost.  It’s pretty startling to see George P. Bush calling direct democracy a win for “Big Government”.  That’s your basic category error.

What would be nice would be if Über and Lyft now reimbursed the taxpayers for the cost of their ballot initiative election–about $500,000 by some estimates.  Roughly 5% of the total that Über and Lyft spent on the campaign. And then maybe donate $10 million to the Central Texas Food Bank since they love Austin so damn much.

The only reason that the law doesn’t impose a “loser pays” rule on ballot proposition elections is that nobody planned on them being used by multinational corporations to further their own business agendas.

Speaking of, Lee Leffingwell, the former Austin Mayor and Current Lobbyist for Über and Lyft laid out the other prong of the “stupid liberals” attack:  Because Über and Lyft have unilaterally decided to take the brinksmanship approach and leave Austin if Prop 1 fails which it now has, this will hurt the “thousands” of jobs that Über and Lyft create. Well…not “jobs” exactly.  More like “economic opportunity”.   Mr. Leffingwell said this publicly in a very carefully worded statement:

Unfortunately thousands of people who drive with ridesharing companies to earn much needed income will now have to find another way to make ends meet.

Note that words like “job” or “our employees” do not appear anywhere in this statement. That’s because  Über and Lyft treat drivers as independent contractors.  So no mention of “jobs”.

Except by implication of course, because when a lobbyist says he won’t stop “fighting,” he means he likes being employed and he won’t stop taking the king’s shilling for shilling.  (Leffingwell got $50,000 so far according to press reports.)  He goes on:

“We’re disappointed in tonight’s results. The benefits of ridesharing are clear: reduced drunk driving and economic opportunity. And we won’t stop fighting to bring it back [and that means continued employment for me].”

Mr. Leffingwell has this one down, no doubt, because he’s had it run on him so many times by Chamber of Commerce types who wanted to attract companies to Austin who were employers.  The problem for Mr. Leffingwell is that Über and Lyft do backflips to keep from being employers–all these drivers are part-time independent contractors.  Why?  This graphic from Fortune explains what happens if Über acted like an actual employer.

uber-pie-chart-ft

However ridiculous Mr. Bush’s statement is, you can count on this being the attack that Über and Lyft will run in the Texas Legislature when they try to wrest local control away from Texas cities to further Silicon Valley’s driverless car agenda.

Oh wait…did I say driverless?  As in without drivers?

They Robot

This is where the modernity attack comes in, but since robots don’t vote (yet), it will probably come in stages.  The first step will be to distract the people and the Legislature from the driverless bit.  Austin is just not hip enough to grok the Valley Boys cool apps that just can’t be used to figure out how to get the fingerprints that the overbearing cities want.  (Disregard that biometric stuff that smartphones routinely perform like TouchID on your iPhone.)

But the next step is the real play.  That step is Über and Lyft using apps to summon robots in driverless cars.  You think this is robot business is a joke, right?  You think I’ve kind of lost it, gone off the deep end?  Actually not at all.  It’s big business.

Friday’s Wall Street Journal page 1: General Motors and Lyft plan on having driverless taxis on the road pronto:

General Motors Co. and Lyft Inc. within a year will begin testing a fleet of self-driving Chevrolet Bolt electric taxis on public roads, a move central to the companies’ joint efforts to challenge Silicon Valley giants in the battle to reshape the auto industry.

Über CEO Travis Kalanick lets us in on the Über strategy, as reported by the Verge back in 2014:

Über will eventually replace the people who drive its cars with cars that drive themselves, CEO Travis Kalanick said today at the Code Conference. A day after Google unveiled the prototype for its own driverless vehicle, Kalanick was visibly excited at the prospect of developing a fleet of driverless vehicles, which he said would make car ownership rare. [And which Uber would presumably buy from Google or a vendor like Ford or Volvo using Google’s technology.]

“The reason Über could be expensive is because you’re not just paying for the car — you’re paying for the other dude in the car [meaning the driver],” Kalanick said. “When there’s no other dude in the car, the cost of taking an Über anywhere becomes cheaper than owning a vehicle. So the magic there is, you basically bring the cost below the cost of ownership for everybody, and then car ownership goes away.”

And according to Reuters, Google, Ford, Volvo, Über and Lyft announced last week that they have formed an alliance to lobby for federalization of driverless car regulations.  The alliance hired an Obama Administration revolving door lobbyist, one David L. Strickland, to lead the federalization of their driverless car effort.  (Volvo is owned by owned by China’s Zhejiang Geely Holding Group Co.)

Strickland joins the coalition from the high roller Washington, DC lobby shop Venable where he’s worked since 2014 after leaving the post of –where else–Administrator of the National Highway Traffic Safety Administration (NHTSA) in the Obama Administration.

So these guys ain’t playin.  They hire the NHTSA administrator for DC, former mayor for Austin.  Mr. Leffingwell can tell us we’re unhip (remember “Fire good, Napster bad“?).  He can shade the definition of employer to avoid his client paying the employer’s share of payroll tax, unemployment insurance and workers compensation.  George P. Bush can tell us it’s all a liberal conspiracy and that an act of direct democracy is a triumph of big government.  You know–“ignorance is strength”, etc.

But one thing they cannot tell us is what good employers Über and Lyft are.  Or should I say “providers of economic opportunity” for “people who drive with ridesharing companies”.

Because whatever the Austin City Council is doing, it is not forming an alliance with Ford and Volvo and GM to replace “people who drive with ridesharing companies” with robots owned by ridesharing companies.

Brace yourself.  The second act is a bitch.

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