Uber’s fuzzy pricing math, racist host on Airbnb, and sharing economy dos and don’ts

LIII

If you’re returning from last week, thanks! If you’re new—and there are a lot of you, thanks to a very kind writeup from the folks at Business Insider—nice to have you! I worked at BI once and made lots of lists but never imagined I’d one day end up on one. I can tell you I like it better from this side.

Dos and don’ts.

We talked in the first issue of this newsletter about how to define the sharing economy. It’s a tricky question and “sharing economy” a pretty clear misnomer, as is ride-sharing, home-sharing, dog-sharing, and every other so-called sharing arrangement in which a not-insubstantial amount of money changes hands. One of the best explanations I ever heard came from an investor, who described the sharing economy as “everything that replaces mom.” (Rides, meals, laundry, etc.)

Much better defined is what the sharing economy is not. Uber is a services platform that, per its terms of service, is explicitly not a “provider of transportation, logistics or delivery services.” Cleaning startup Handy “provides a web-based and mobile application-based portal” but “does not provide the Services” or “employ individuals to perform said services.” Postmates, an on-demand delivery company, “DOES NOT PROVIDE DELIVERY SERVICES.”

The latest study in this comes from Deliveroo, a UK-based delivery service, which has a six-page list of “dos and don’ts” that it provides to staff as guidelines for speaking with couriers. Don’t say “employee,” do say “independent supplier.” Don’t say “hiring,” do say “onboarding.” Don’t: “uniform,” “wages,” “firing.” Do: “branded clothing,” “fees,” “termination.” Use it in a sentence: “We are terminating your Supplier Agreement due to your failure to meet Service Delivery Standards.”

The sharing economy is a negative space composition, defined best by what isn’t there. It’s also a linguistic game of Twister, with startups performing endless contortions to avoid being seen as service providers or traditional employers. The one thing the sharing economy loves to give away for free is liability. 

Elsewhere: These Startups Are Ditching the Uber Model and Hiring Full-Time Workers. DoorDash Will Pay $5 Million to Settle Class-Action Lawsuit Over Independent Contractors.

Basically existential.

Last summer, when Uber debuted its self-driving cars in Pittsburgh, CEO Travis Kalanick said the project was “basically existential for us.” Last week, Uber upgraded that to fully existential. “To hinder Uber’s continued progress in its independent development of an in-house LiDAR that is fundamentally different than Waymo’s, when Uber has not used any of Waymo’s trade secrets, would impede Uber’s efforts to remain a viable business,” the company said in a court filing on Friday (April 7).

For those of you who are just joining us, Waymo, the driverless car unit spun off by Alphabet née Google, sued Uber in late February for allegedly stealing its self-driving car technology. More specifically, the suit alleges that Uber conspired with former Waymo employee Anthony Levandowski, now head of self-driving technologies at Uber, and Otto, the startup Levandowski founded and Uber acquired last summer, to copy its proprietary Lidar technology and jumpstart their own autonomous efforts. Lidar, as in “light radar,” is a crucial component of driverless technologies that essentially allows the vehicle to see. Waymo is seeking a preliminary injunction that could force Uber to suspend work on its self-driving car project indefinitely.

Since February the case has amassed more than 200 court filings, an abundance of adjectives (Waymo called Uber’s actions “intentional, knowing, willful, malicious, fraudulent, and oppressive”), and enough redactions to get both companies chided by the judge, e.g.,

Waymo has alleged that Levandowski downloaded 14,000 confidential files amounting to 9.7 GB of “highly confidential data” before leaving his job in January 2016. Uber on Friday filed testimony from several current Uber and former Otto employees who say, uniformly, that they “had never heard of the 14,000 files allegedly downloaded by Anthony Levandowski” and “have never seen any evidence of any use of Google or Waymo information” during their Otto and/or Uber employment. “Waymo’s preliminary injunction motion is a misfire,” Uber writes in its filing. “A cursory inspection of Uber’s LiDAR and Waymo’s allegations fall like a house of cards.” Uber is also arguing that a preliminary injunction would “risk delaying the implementation of technology that could prevent car accidents, and that Waymo has “no commercial urgency” for its request because Uber’s Lidar is still being developed and—jk, that’s redacted.

Upfront pricing.

Is not always so upfront! Here is a story I did last week about weird discrepancies between the price Uber charges to riders, and the fares it later shows to drivers. I experienced this in an UberPool on the way home from Brooklyn’s Williamsburg one night in January, and drivers across the US have documented similar incidents. It works like this: Uber charges riders at the time of booking by guessing what a trip will cost. But it calculates driver pay based on actual miles and minutes driven. Sometimes riders overpay and Uber pockets the difference. Other times, the rider gets off cheaply, the driver is still paid for the full trip duration, and Uber eats the cost. As with so many things Uber does, multiple lawsuits are pending on the matter.

Uber wouldn’t say whether these fare disparities net out in its favor, though a spokesman did offer a lot of off-the-record commentary, which I unfortunately can’t share with you here. But I find it unlikely that the company doesn’t know the answer to that question. Uber has high volume and low margins. Even a slight difference in its favor could nicely pad the bottom line. 

#AirbnbWhileAsian.

Airbnb has struggled to address racial discrimination in the past, but the company took quick action last week against a Bay Area host who cancelled a reservation minutes before her guest arrived because the woman was Asian. “I wouldn’t rent it to u if u were the last person on earth,” the host reportedly texted Dyne Suh, a law student on vacation with her fiancé. “One word says it all. Asian.” Airbnb has banned the host, Tami, from its platform and called her behavior “abhorrent and unacceptable.” Suh has since posted about the experience on Facebook. “Believe it or not, discrimination happens against people who happen to be studying law, critical race studies, and have organized against racism in the past too, as much as it happens to people who are not active in politics,” she wrote. “Tami happened to make a very bad decision that day.”

Other stuff.

Italy bans Uber. Anthony Levandowski is an evil genius. Trump taps Lyft exec for transportation role. Which Tech CEO Would Make the Best Supervillain? Uber finds stolen Waymo file on employee’s personal computer. Uber says it never used custom Lidar. Why Uber Won’t Fire Its CEO. Uber’s New HR Policies for Female Employees. More than 8,000 Uber and Lyft drivers failed Massachusetts’ background check. London plans test of driverless shuttle. Ride-hailing may reduce drunk driving, study finds. Udacity spins out driverless taxi service. Online ratings are totally meaningless. Pregnant Uber driver drives straight into debt. Uber bans rider for threatening to accuse driver of rape. The Man Who Has Travis Kalanick’s Ear. MetroResidences raises $2.8 million. TaskRabbit explores sale. Instacart loses top exec. Airbnb shuts down Russian subsidiary. Ofo launch delayed in Cambridge. An Uber Model for Manufacturing Is Ready to Upend the Industry. My week as an Uber courier.