Remember when Uber was not only the “next big thing” but was hailed as the ultimate and permanent disruption of the transportation industry? Halcyon days. And it was, to a point. In just nine years it went from charming San Francisco novelty to global behemoth with its hands in everything from food delivery to freight. Through a process of local strong-arming and almost boundless funding, they made it to the very top of the heap.
A Heap of TroubleAnd yet, all this time they have been losing piles of money, as has their closest competitor, Lyft. Last week they announced a quarterly loss of $5 billion (that’s “billion” with a “b”), their largest to date. Couple that with their seemingly endless stream of woes – tax missteps, worker protests, super sketchy drivers, and of course one of the least-successful IPOs in stock history … I mean, it’s pretty hard to see a silver lining there. Economist John Kenneth Galbraith called these companies “bezzles” – wildly popular investment traps where the losses have yet to be recognized by the average investor. That sounds a little harsh, but remember – neither Uber nor Lyft have ever made a profit. They both have near-complete market penetration, masses of funding, and millions of riders. But they’re in the red every single quarter.
The Next Next Big Thing?And with SoftBank increasingly pouring buckets of money in peer-to-peer car-sharing companies, we wonder if car-sharing is poised to rise out of the shadows and present itself as a real alternative to ride-hailing. Listen, there are certainly some analysts who think Uber will find its stride and start turning a profit. And Dara Khosrowshahi states, with all the confidence of a man who just laid off 400 members of his marketing team, 2019 will be a “peak investment year” and that losses should come down in 2020 and 2021. He’s also certain “the business will eventually be a break-even and profitable business.” Maybe. Or, maybe folks are just tired of getting bezzled.
Cores of CompetitionWe’ve been loyal iPhone users for 12 years. And it seemed for a while there that iPhones would rule the phone world for the duration. Not so. In the second quarter of this year, Apple fell to fourth place in the list of global smartphone makers after years of clear dominance.
But why?Even here at BiTE HQ opinions differ. Some think Apple got lost in search of the next tech blockbuster that has yet to appear. And iPhones have now reached that creative wasteland called “good enough.” There will never be another 2007. Keeping consumers interested means, if not giving them groundbreaking technology, then at least keeping the “good enough” technology priced within reach of the populace. And that’s the part, some of us argue, they’ve failed at. Apple has always been a premium product, but their unwillingness to build in any price elasticity into their older models is a killer. The three-year-old iPhone 7 is only $200 bucks less than the new Xs. And even with the Xs, nice as the coral is (it is really pretty), consumers are hard-pressed to drop almost a grand for a phone that isn’t appreciably different from the one they have already. Now it was always inevitable that the iPhone wouldn’t grow forever. Nothing does. But forget handsets for a while and look at wrists and ears. While pundits hand-wring over the loss of iPhone dominance, Apple is the only company to have had real success in wearables. Wearables are now almost as big as the Mac and bigger than the iPad. AirPods are a cultural phenomenon like white earbuds were in the iPod days (he who controls the memes controls the market). In fact, the Apple Watch alone is a far, far bigger business than iPod ever was. What does that mean? It means Apple stock is jumping even as smartphone sales are slumping for every manufacturer. It means their other offerings, even if I keep losing my AirPods and I forget to use my Apple Watch, are making up for any lost ground, and then some.
CloudflareThe last piece for this week comes without snark and without criticism. We’re living at a time when the whole of the world’s knowledge is available in your pocket, and we’re navigating our way through a moment in history where any idea or any emotion can be expressed to the world. And answered in kind. That’s an incredible thing. It’s also a terrifying thing. This tool has created a problem we don’t yet know how to solve: The dissemination of hate. Enter Cloudflare. In 2017 the middling-large web security company found itself in the position of having to decide whether to drop neo-Nazi, holocaust-denial disinformation site Daily Stormer from its platform. They did. In his blog post on the topic, CEO Matthew Prince said:
“It’s powerful to be able to say you’ve never done something. And, after today, make no mistake, it will be a little bit harder for us to argue against a government somewhere pressuring us into taking down a site they don’t like.”Prince’s ambivalence is understandable. Because as absolutely as we all believe in the protections of the First Amendment, we have to acknowledge that at some point it becomes our duty to stand up against hate speech. Where that point lies is hard to determine. In the wake of the El Paso massacre, Prince, whose platform also provided web security for notorious, anonymous site 8chan found himself in the middle of a free speech shitstorm once again. The El Paso shooter, along with the Christchurch shooter, both found their compatriots on 8chan. It was there that they honed their hate and gave voice to their increasing radicalization.
In his statement announcing the denial of services for 8chan, Prince had lost the worry that rang through his 2017 decision: “The rationale is simple: they have proven themselves to be lawless and that lawlessness has caused multiple tragic deaths. Even if 8chan may not have violated the letter of the law in refusing to moderate their hate-filled community, they have created an environment that revels in violating its spirit.”Losing their protection doesn’t make these sites go away, but as business owners and as human beings we face a decision on whether or not to prop up their platform or to make a stand, however symbolic, against white supremacy. The moment when business becomes political is never comfortable, but in times like these we are required to take a stand. Cloudflare did, and they earned our eternal respect.