Big, bad tech: how America’s digital capitalists are taking us all for a ride | John Naughton | Comment is free | The Guardian

San Franciscos's Uber company has disrupted the taxi trade in cities throughout the world. Photograph: Kai Pfaffenbach/Reuters

One useful side-effect of the revelations that a senior executive of the cyber-minicab outfit Uber was caught musing about the attractions of hiring private investigators to dig up dirt on journalists who are critical of the company is that it has lifted the veil on what we might call digital capitalism.

Uber, you may recall, is a lavishly-funded San Francisco startup whose mission is to disrupt taxi services in cities worldwide. It has already sparked protests and demonstrations in its targeted cities, including London, and begun to attract the attention of regulators and municipalities everywhere.

Although Uber’s activities have attracted a good deal of media attention, much of it has been strangely uncritical, admiring, even. It has been portrayed as a standard bearer for Clayton Christensen’s cliched idea of “disruptive innovation”. Existing taxi businesses and franchises are seen as lazy, cosy, sometimes corrupt municipal monopolies that gouge customers (many of whom are, of course, journalists).

Uber, in contrast, is cool, modern (it works via a smartphone app, so it must be cool), a worthy surfer on the wave of creative destruction that is capitalism’s way of renewing itself. And if Uber’s executives are, er, a mite aggressive, well then so are the incumbents whom the company threatens. Did not London cabbies bring the capital to a standstill in a protest a while back?

The problem with this is that Uber is no more a tech company than is UPS or M&S. It’s a company that uses technology in order to intervene/operate in the offline world. It has, however, borrowed two ideas from the pure internet operators. First, it takes the standard tech business model of being a “platform” (translation: intermediary) – putting buyers in touch with sellers, taking a cut, harvesting the data and taking no responsibility for anything.

Second, it is an obsessive user of metrics to keep its self-employed contractors up to scratch. After each ride, customers are invited to “rate” their experience on a scale from one to five stars. “Mentally,” an Uber driver who used to do contract limo work told a reporter from business magazine Quartz last week, “these rating systems affect us a lot… If I am driving somebody who doesn’t live in New York, and they complain that I took the wrong route, how would they know the route that I should have taken?”

He went on to note that in 20 years of working with corporate employees, he hadn’t a single customer complaining. Now he feels he’s living in fear of losing his job: “I have a 4.8 average [out of a possible top average mark of 5]. I can still get fired though, if I go below a 4.6.”

Then there’s the data-harvesting side of the business. An intriguing insight into this could be found in a post that appeared on the company blog on 26 March 2012 under the title “Rides of Glory”. “Recently,” wrote the author, “I have come to understand that some of you may have on occasion found love that you might immediately regret upon waking up the morning after. In times of yore you would have woken up in a panic, scrambling in the dark, trying to find your fur coat or velvet smoking jacket. Then that long walk home. But that was then. One of the neat things we can do with our data is discover rider patterns: are there weekend riders that only use Uber post-party? It was while playing around with this idea of (blind!) rider segmentation that we came up with the Ride of Glory (RoG). A RoGer is anyone who took a ride between 10pm and 4am on a Friday or Saturday night, and then took a second ride from within 1/10th of a mile of the previous night’s drop-off point 4-6 hours later (enough for a quick night’s sleep).”

As Monty Python used to say: “Wink, wink, nudge, nudge, know wot I mean squire?”

Interestingly, the post disappeared from the web sometime last week, so now if you go to http://blog.uber.com/ridesofglory you’ll find only the “Error 404” notice: nothing interesting here. The PR crisis-management team has obviously been combing through the company files, weeding out embarrassing or creepy material that yields insights into how its employees view their customers. (Memo to aspiring journalists: when you find something interesting, scrape the page just in case it gets “disappeared”.)

The real lesson of the Uber exposé, though, is that it’s time to discard the rose-tinted spectacles with which we have hitherto viewed these Silicon Valley outfits. For too long, they have been allowed to trade fraudulently on the afterglow of the hippie libertarianism that supposedly infected the early days of the personal computer industry. The billionaire geeks who currently run the giant internet companies may look and talk like a new species of entrepreneur but it would be more prudent to view them as John D Rockefellers in hoodies.

And the economic philosophy that’s embedded in this new digital capitalism is neoliberalism red in tooth and claw, which is why they minimise the number of “ordinary” (ie non-geek) workers on their payrolls, outsource everything they can, despise trade unions, view regulators as barriers to “innovation” and are outraged by the temerity of European institutions that seek to curb their freedoms of action.

There’s a geopolitical angle to this too. In the wake of the Snowden revelations, the internet companies have been behaving like scandalised maiden aunts up whose skirts the naughty NSA has been putting a hand or two. But what’s really bothering them is that their, er, complicated relationship with US government agencies might eventually lead to their users going elsewhere. They’re already experiencing that in, for example, the way in which US-based cloud computing services are viewed with increasing suspicion by European consumers and companies, and if this were to gather momentum, who knows where it might lead?

So an illusion is being energetically fostered – that it’s the poor companies and their hapless users (that’s you and me) versus the overbearing national security state. This is pure baloney: the bottom line is that all the major technology companies outside of China are American. And as the global influence of the US begins to wane, companies such as Google, Amazon, Yahoo, Microsoft, Facebook, Cisco – and Uber – have metamorphosed into manifestations of what Joe Nye famously christened “soft power”. They know whose side they’re on and it isn’t ours.

http://www.theguardian.com/commentisfree/2014/nov/23/uber-dig-dirt-big-tech-digital-capitalists