Tag: Transportation

What, Another Silicon Valley Sharing Economy Scheme Revealed to be a Fraud?

Inspector Renault Says………

Round up the usual suspects, it turns out that food delivery companies are using their piles of venture capital money to dominate the market, and then they will be able to extract monopoly rents:

Ranjan Roy has a great article on Substack about DoorDash and “pizza arbitrage”: Roy’s friend was first annoyed to discover that DoorDash was providing delivery services for his nondelivery pizzeria: taking web orders without his knowledge, phoning in for takeout and sending a DoorDash delivery worker to pay and pick up the food, and often delivering to a customer who would be annoyed that the pizza arrived cold. And then he was surprised to see DoorDash was selling his $24 pizzas for only $16. This meant he had an arbitrage opportunity: Order his own pizzas at $16, sell them to DoorDash for $24 each, and pocket the difference. This worked even better if he didn’t put real pizzas in the delivery boxes. But how on earth was DoorDash ever supposed to make money selling his pizzas at a loss?

Delivery via smartphone is one of those venture-funded sectors where business executives appear to have taken seriously the old joke about “losing money on every transaction but making it up on volume.” Normal rules of capitalism about maximizing profits do not apply. This has led to a strange situation where restaurants feel squeezed by the fees charged by delivery services (when, unlike Roy’s friend, they participate voluntarily on a delivery platform) and yet the delivery services themselves manage to keep losing money. Why is this even happening?


I think the missing element for profitability is different: productivity. The hope with a lot of business models that bring app intermediation to a preexisting element of the economy like ride services or food delivery is that technology will make workers more productive. You can see instances where this is obviously true: a Peloton instructor who teaches a class to tens of thousands of people is more productive than a SoulCycle instructor who can only teach about 60 people at a time. But with a lot of apps, the promised boost to productivity never materializes. The worker still has to render personal service to one customer at a time, and the app doesn’t do much to reduce the worker’s downtime or help him or her complete the task faster. As such, the productivity boost that is needed to make the financial model pencil — paying the worker a high enough hourly rate while charging a fee the customer is willing to pay and still having a positive profit margin — does not materialize.

Consider a few examples. In the traditional model, restaurants use their own employees to deliver food. DoorDash and its competitors offer a different approach: DoorDash contracts with the delivery person, sending him or her to whatever restaurant has orders at any moment. In theory, this should lead to better matching of labor to work: Restaurants don’t get backed up with too many orders, because DoorDash can send over extra staff as necessary; the restaurant also never has to pay a worker to sit around and not deliver food. But there are offsetting disadvantages to this outsourced model. A restaurant-employed delivery person knows the menu and can tell quickly whether a bag appears to contain what is listed on a receipt. He has a rhythm with the staff he’s picking up from. He knows the neighborhood and knows the addresses of frequent customers. He has the right equipment — if he’s delivering pizza, he has an insulated bag so the pizza is hot when it gets to the customer. A third-party delivery person is more likely to screw these things up: slower, less accurate, lower-quality delivery. At the very least, this mutes the productivity gains from better staff matching; it could offset them entirely.


But what if the main reason the value proposition for these services has changed is that a third party is weirdly willing to lose money on the transactions? That doesn’t seem like a sustainable situation — and yet it has been sustained for years at this point. If it ends, if investors in app-based service companies start demanding profits, then we should expect the size of the personal-service part of the economy to contract. Some restaurants that came to rely on app-based delivery may find it makes sense to take delivery in-house. But others may find delivery isn’t worth it if they actually have to employ the delivery person. And then customers, revealed to be unwilling to pay the true economic cost of having their food delivered, may have to go pick it up.

What is going on here is that eventually, one of these companies will be the last one standing, and then they hope to extract even more from fees, with the threat that if your restaurant isn’t a customer, then they will deliver cold pizzas stuck to the top of the boxes and ruin your reputation, because they will hijack your Google and Yelp listing anyway.

This is not innovation, this is a f%$#ing Ponzi scheme.

Travis Kalanick’s Ghost Haunts Uber

Again and again, despite having given Kalanick the boot, Uber shows that it remains rotten to its core.

Case in point, Uber CEO Dara Khosrowshahi has decided that maintaining the excessive pay of senior executives is worth firing thousands of employees.

At it’s core Uber is still about monetizing the public commons and misery of its employees to enrich the looters at the top:

Uber CEO Dara Khosrowshahi reportedly vetoed a request from the ride-hailing giant’s top executives to cut their own salaries in order to avoid laying off rank-and-file workers, paving the way for thousands of pink slips.

A number of the ride-hail giant’s engineering leaders last month told Khosrowshahi that they and other managers were willing to have their own pay slashed in order to spare their workers from Uber’s wide-ranging culling of its headcount, according to The Information (paywall).

“The answer is no,” Khosrowshahi said in response, according to the report. “What we’re doing through is fundamentally realigning the company so that our cost base matches the new reality of the world post COVID. We do not want to take temporary measures.”

Khosrowshahi likewise signaled that part of his plan includes “remaking the engineering team so that over time more jobs would be located overseas,” according to the report.

Uber earlier this month laid off 3,700 workers from its customer support and recruiting teams, and expects to continue the culling with cuts to its engineering, products, operation and self-driving units that will be completed by May 18. The cuts may end up representing as much as 30 percent of Uber’s workforce.

Uber is pond scum, top to middle management, dedicated to abusing its lower level employees and its customers for a quick buck.

Today in Boneheaded Rent Seeking

The EU Court of Justice has ruled that rental car companies do not have to pay a license fee for the public performance of music when they rent a car, even though every car made today has a radio, and the drivers could theoretically play music on the radio.

These sort of outrageous claims are the rule, not the exception, because there are no penalties for attempting to promulgate this bullsh%$:

Performance Rights Organizations (PROs), sometimes known as “Collection Societies,” have a long history of demanding licensing for just about every damn thing. That’s why there was just some confusion about whether or not those with musical talents would even be allowed to perform from their balconies while in COVID-19 lockdown. And if you thought that it was crazy that anyone would even worry about things like that, it’s because you haven’t spent years following the crazy demands made by PROs, including demanding a license for a woman in a grocery store singing while stocking the shelves, a public performance license for having the radio on in a horse stable (for the horses), or claiming that your ringtone needs a separate “public performance” license, or saying that hotels that have radios in their rooms should pay a public performance license.

Five years ago, we wrote about another such crazy demand — a PRO in Sweden demanding that rental car companies pay a performance license because their cars had radios, and since “the public” could rent their cards and listen to the radio, that constituted “a communication to the public” that required a separate license. The case has bounced around the courts, and finally up to the Court of Justice for the EU which has now, finally, ruled that merely renting cars does not constitute “communication to the public.”

A reevaluation, and a roll-back of implicit and explicit subsidies related to IP needs to happen sooner, rather than later.

Today in Bullsh%$ IP Lawsuits

AM General just had a lawsuit it filed against Activision thrown out.

The lawsuit claimed that the Call of Duty game violated AM General’s trademark on its Humvee truck:

A federal judge ruled this week that Activision has a first amendment right to include Humvees in its Call of Duty titles, despite vehicle manufacturer AM General’s claims of trademark infringement and false advertising for the in-game use of the military vehicles.

The ruling stems from a lawsuit first filed by AMG in 2017, which suggested that Call of Duty players were being “deceived into believing that AM General licenses the games or is somehow connected with or involved in the creation of the games.” That’s not a completely ridiculous idea, since Activision and other major game manufacturers generally arranged licenses for their in-game guns until 2013.

In his ruling this week, though, District Judge George B. Daniels dismissed AM General’s claim. That decision hinged in part on a 1989 precedent that established that artistic works could make reference to outside trademarks as long as the usage was relevant to the work and did not “explicitly mislead as to the source of the content or work.”

We really need to reign in excessive IP protections.

They do not serve the needs of society.

Boeing Cannot Make Anything Anymore, Part MMMDCCXXIV

It turns out that Boeing, the company that invented the airborne tanker, has mission critical fuel leaks on its new KC-46 tanker.

Seriously, saved this issue 60 years ago, and now, after 25 years of stock buybacks, they can’t even prevent a fuel tanker from leaking fuel:

The U.S. Air Force has upgraded an existing deficiency for the KC-46A Pegasus fuel system to Category 1.

The service’s program office first identified “excessive fuel leaks” in July after an air refueling test. The Air Force and Boeing are working together to determine the root cause and implement corrective actions. A Category 1 deficiency means the government has identified a risk that jeopardizes lives or critical assets.

“The KC-46 Program Office continues to monitor the entire KC-46 fleet and is enhancing acceptance testing of the fuel system to identify potential leaks at the factory where they can be repaired prior to delivery,” according to an Air Force statement.

Every senior executive at the firm needs to be fired, including the board of directors, and stock buybacks need to be banned for the next 4 decades.

In Other Unsurprising News

This has been known for over 80 years.  It’s why New York introduced the medallion system in 1937:

Five years ago, Travis Kalanick was so confident that Uber Technologies Inc.’s rides would prompt people to leave their cars at home that he told a tech conference: “If every car in San Francisco was Ubered there would be no traffic.”

Today, a mounting collection of studies shows the opposite: Far from easing traffic, Uber and its main rival Lyft Inc. are adding to congestion in numerous U.S. downtowns.

Officials in San Francisco, Chicago and New York have cited congestion as the main rationale for new fees they recently enacted on Lyft and Uber rides in each of the cities. Other regulators around the country are considering similar fees. Uber and Lyft no longer pledge ride-hailing will reduce traffic, acknowledging that they add to congestion, though they say some studies overstate their role in the problem.

The app makers initially thought their technology would create seamless trips, with four strangers forsaking their own cars for a shared ride. Cutting-edge algorithms, they believed, would steer behavior through pricing and route-matching, letting drivers spend little time between trips. Riders leaving their cars at home would then increasingly hop on buses, bikes or walk in a gridlock-easing ripple effect.

Seriously, the ability of charlatans to take a pile of crap and give it a shine by calling it disruption.

Same Old Same Old

Following a SEC inquiry of Tesla being closed, the SEC opens up another inquiry, because stock fraud is kind of Tesla’s thing:

Tesla Inc. isn’t yet in the clear with the U.S. Securities and Exchange Commission.

On Dec. 4, the same day the agency closed its second investigation into the electric-car maker in as many years, the SEC sent a subpoena seeking information on a fresh set of matters, Tesla disclosed in a regulatory filing Thursday. The regulator is looking into “certain financial data and contracts including Tesla’s regular financing arrangements,” according to the company.

The investigation the SEC closed in December related to projections and public statements regarding Model 3 production rates. Earlier in 2019, the agency went to court with Chief Executive Officer Elon Musk over tweets he sent about how many cars the company would build for the year. A judge forced the two sides to shore up a settlement reached in 2018 over claims Musk made during his short-lived efforts to take Tesla private.

If we actually enforces securities law in the United States, half of the Silicon Valley masters of the universe would have gone to jail.

How Convenient

As I’ve noted before, this is all about Amazon expanding its monopoly(ies):

The online retailer on Tuesday notified its third-party merchants that they could once again use FedEx’s Ground network to ship orders placed under Amazon’s Prime membership program, nearly a month after imposing a ban on the service because of performance issues.

The move ends a standoff between Amazon and onetime shipping partner FedEx, whose Ground network was blocked for the final rush before Christmas and several weeks thereafter.

An Amazon spokesman said FedEx Ground has been reinstated for Prime shipments fulfilled by third-party sellers now that the services are consistently meeting the retailer’s on-time delivery requirements.

This was not a performance issue.

Governor Ratf%$#

I am not a fan of Maryland Governor Larry Hogan.

He is implacably opposed to mass transit, and has made his political career on deliberately targeting minorities.

Well, now we learn that there is a corrupt method to his madness. The money hat he has diverted from mass transit, has gone to build roads going to his real estate holdings.

It appears that Donald Trump’s self dealing in office is not a norm that he has subverted.

It’s just what our corrupt political elites do:

For years, Never Trump Republicans have courted Larry Hogan to run for president. It’s easy to see why. He’s won two gubernatorial elections in Maryland, where Democrats outnumber Republicans two to one; he’s currently one of the most popular governors in America; and he’s widely viewed as a moderate who’s willing to reach across the aisle. The late-night talk-show host Seth Meyers recently described him as “a Republican who believes in climate change.” In June, he’s publishing a memoir—a move that suggests he’s laying the groundwork for a 2024 presidential bid. Last spring, he launched a national advocacy group, An America United, designed to break partisan gridlock and “bring people together to advance bold, common-sense solutions for all Americans.” Simply put, everything about Larry Hogan’s public image would lead you to believe he’s the opposite of Donald Trump.

But Hogan, it turns out, has more in common with Trump than his reputation suggests.

Both are real-estate executives who have refused to relinquish their private businesses while in office. Just as Trump maintained his ownership of the Trump Organization when he became president, Hogan maintained ownership of HOGAN, a multipurpose real-estate brokerage firm, when he became governor. Both have left close family members in charge of their businesses—Trump with his children; Hogan with his brother, Timothy—and created arrangements that allow them to be apprised of the company’s dealings. In other words, they have set up situations in which they can use their powerful government positions to increase their private profits.


Hogan has advanced a number of major state transportation projects that are near properties his company owns, a development that can boost the value of those properties. Before canceling the Red Line, he approved construction of an interchange down the road from a parcel of land his company controlled. Later, he approved millions of dollars in road and sidewalk improvements near property he had bought approximately two years earlier and was turning into a housing development.

Maryland law says that an official may not partake in a decision if the official or a qualifying relative—defined as a parent, spouse, child, or sibling—has an economic interest in the matter and the official or employee knows of the interest. These decisions “certainly seem to implicate the statute,” said Virginia Canter, the chief ethics counsel for Citizens for Responsibility and Ethics in Washington and a former ethics adviser for the International Monetary Fund. “It looks like there’s credible evidence of a violation.”


But Hogan has not revealed payments he has received from specific real-estate transactions while in office. “He’s getting paid by developers all across the state—who he’s in charge of regulating in one way or another—and the public has no idea who they are,” said Democrat John Willis, a former Maryland secretary of state and now a University of Baltimore politics professor and a historian of Maryland politics and government.


In February 2018, Maryland Matters, a state-based politics and policy website, reported that Hogan held ownership in a company called Brandywine Crossing Realty Partners LLC. The company was chartered on March 9, 2015, and it became a controlling partner for a parcel of land behind the Brandywine Crossing Shopping Center in Prince George’s County. The land was just down the road from a major state transportation project: a new highway interchange.


Multiple legislators said they were not informed of the governor’s nearby real-estate interests before voting on his transportation budget. “I certainly had none of this information when working on the budget committees or in discussions,” said Bill Ferguson, a Democratic Maryland state senator, when we spoke in September. (In October, Ferguson was selected to become the Maryland Senate’s next president.) “Had I known this information, I think there would have been much more targeted and purposeful questions about the necessity of projects that appear to have a financial benefit to the governor.” (Hogan listed his holdings in real-estate LLCs in his submission to the Maryland State Ethics Commission, filed 17 days after the legislature approved his first budget, but he did not identify specific properties, let alone the dates of acquisition.)


Experts I spoke with who reviewed Maryland’s ethics laws were alarmed by the Hogan administration’s decisions around Brandywine and other properties. Richard Painter, a professor of corporate law at the University of Minnesota Law School and a former chief ethics lawyer for President George W. Bush, said that Hogan should have been prohibited from participating in the decision. “The [ethics law] language suggests that he should recuse because the official or employee or qualifying relative—he himself—has an interest in the matter and he knows of the interest,” Painter told me.


Brandywine isn’t the only place where Hogan has advanced construction projects near his existing property interests. On November 12, 2014, just eight days after his election, Hogan’s company bought a parcel of land from Maryland’s State Highway Administration in Severn, Maryland, for $400,000. The sale was conducted through a public auction, and only one bid was made: by Timothy Hogan. In November 2014, HOGAN created a new LLC called the Villas at Severn Crest. Since Larry Hogan took office, the State Highway Administration has begun a number of transportation projects that could boost the value of that property, including intersection improvements and road resurfacing less than a mile away, which started in 2018.


But Hogan’s election came with an immediate complication: What would he do with his real-estate business? Maryland ethics law bans officials or employees from making decisions on matters in which they have an economic interest. But the law states that this prohibition does “not apply if participation is allowed as to officials and employees subject to the authority of the [Maryland State] Ethics Commission.” Hogan reached out to the ethics commission for advice.


In December 2015, Hogan entered into a trust agreement that he asserted would prevent conflicts of interest. On April 15, 2016, the trust was approved by the state ethics commission. Between Hogan’s inauguration and the trust agreement’s approval, the governor submitted two transportation budgets—including the one advancing the Brandywine interchange—and gained ownership of at least seven newly created real-estate LLCs. In other words, Hogan’s real-estate business was growing just as he was supposed to be separating himself from it.


But even after Hogan began talks with the ethics commission, there were signs that he had not made a clear break from his business. In February 2015, while serving as governor, Hogan himself announced a $3.4 million real-estate transaction in a press release issued by his private company. His administration began construction on projects near both the Villas at Severn Crest and the Riverfront at West Hyattsville after his trust went into place.


But Hogan’s trust is not blind. The ethics commission granted the governor a “financial-interest exemption,” which allows him to continue to own real-estate projects and to be apprised of his company’s business dealings, as well as how much money he’s making. In a letter to Lord, Hogan wrote that the arrangement “will not prevent me from requesting or receiving information about the status of the Hogan Companies . . . including the status of its current investments and, [sic] the identity of the investors and the locations of real property in which the Hogan Companies have an investment.”


But the trustees Hogan chose to manage his holdings are not just experts in the real-estate field—they are his previous business associates: Victor White, the chief operating officer of HOGAN; Jacob Ermer, the executive vice president of HOGAN; and David Weiss, a former broker at HOGAN. According to public records, all of them are Hogan campaign contributors. His brother, Timothy, is in charge of his company.

As governor, Hogan has maintained a close relationship with all four of these individuals. He had at least eight meetings with them between 2015 and 2018, according to his meeting calendar, obtained by the Washington Monthly through a Public Information Act request.


In its specific guidance to Hogan, the commission stated that Hogan could, and should, identify “a specific person within the Governor’s Office to act in his place on any such matters that come to the Office while he continues to retain his financial interest in his businesses.” Yet when I asked Ricci, Hogan’s spokesperson, if the governor had ever recused himself from a decision in his transportation budget that could impact his properties, he was clear that Hogan had not. “The answer is no,” Ricci said. “The governor does not make decisions on individual projects, so he has no decisions to recuse himself from.”


But Hogan has been, at best, silent over the president’s alleged violations of the Emoluments Clause. In fact, in 2018, he withheld $1 million from the Maryland attorney general’s office to stop a series of lawsuits against Trump, the most prominent of which alleged that the president was using his position to bolster his real-estate empire’s profits.

The governor justified his decision on fiscal grounds. “The administration takes its responsibility to find efficiency and savings in the state budget extremely seriously,” Doug Mayer, a spokesperson for Hogan at the time, told The Baltimore Sun. “This is a perfect example of that.”

Have I mentioned that Governor ratf%$# is a corrupt racist SOB who has no shame or decency?

Paging John Sherman. Please Come to the White Courtesy Phone.

Tell me that this is not monopoly power being abused:

Amazon.com Inc. is blocking its third-party sellers from using FedEx Corp.’s ground delivery network for Prime shipments, citing a decline in performance heading into the final stretch of the holiday shopping season.

The ban on using FedEx’s Ground and Home services starts this week and will last “until the delivery performance of these ship methods improves,” according to an email Amazon sent Sunday to merchants that was reviewed by The Wall Street Journal.

Amazon has stopped using FedEx for its own deliveries in the U.S., but third-party merchants had still been able to use FedEx. Such sellers now account for more than half of the merchandise sold on Amazon’s website, including many items listed as eligible for Prime.

FedEx said the decision impacts a small number of shippers but “limits the options for those small businesses on some of the highest shipping days in history.” The carrier said it still expects to handle a record number of packages this holiday season. “The overall impact to our business is minuscule,” a FedEx spokeswoman said.

An Amazon spokesman said the policy change is to ensure customers receive their packages on time and the e-commerce company is managing delivery cutoffs so that orders arrive by Christmas. He said the ban is temporary and will be lifted once FedEx service levels improve.

In its email to merchants, Amazon said sellers can use FedEx’s speedier and more expensive Express service for Prime orders or FedEx Ground for non-Prime shipments.


Earlier this year, Amazon and FedEx ended two major shipping contracts, totaling some $900 million in revenue for FedEx. The overnight-delivery pioneer is shifting its focus to retailers such as Walmart Inc. and Target Corp. that compete with Amazon.

If you believe that this was not an anti-competitive effort coming from Amazon, I have a helipad in Brooklyn that I want to sell you.

The Other Problem With Self-Driving Cars

There are a number of claims as to the benefits, and one, that it would make transportation more efficient, has been shown to be objectively false in a study.

The study was fairly straightforward, they have people cars with drivers, and studied how their vehicle use changed.

Many more trips and many more miles driven, meaning more congestion and more waste and pollution:

A few years ago, Mustapha Harb realized there was a problem in his field of research about how autonomous cars will change the way people travel. The solution to the problem he settled on was as simple as it was revealing.


One did not have to look far for studies and articles suggesting fleets of self-driving cars could, for example, reduce traffic. These techno-utopian articles claimed the same highways we use today could, with slight modifications, accommodate many more autonomous vehicles than they do human-driven cars. AVs could, using more precise control systems, follow one another at much closer distances. Similarly, lanes could be narrowed, accommodating perhaps six lanes where there are only five today.

These promises were, and remain, the foundation upon which AV utopianism has been built: a greener, safer, faster, and more pleasant transportation future just around the corner.

But, Harb found, these promises couldn’t be checked. After all, self-driving cars didn’t exist yet.

Harb, a Ph.D. candidate at the University of California Berkeley’s Department of Civil and Environmental Engineering, was intimately familiar with the research already done on the subject in his field. Most of it consisted of surveying which, while far from perfect, was the best approach available.

“You would send people a survey,” Harb described, “like, hey, there’s a self-driving car in the future, how do you think your travel will change in the future?”

These studies, flawed as they were, found something very different from the rosy future AV companies wanted investors and the public to imagine. They found reason to believe AVs would drastically increase the number of vehicle miles traveled, commonly shortened to “VMT” in academic literature.

And the more vehicles miles traveled, all else being equal, the more traffic and emissions we can expect, canceling out many of the AV’s touted benefits.


While the survey results were potentially alarming, it was difficult for researchers like Harb to put too much stock into them. Some surveys predicted only a few percentage points increase in VMT in a self-driving car future. Others, upwards of 90 percent.


But his advisor, Professor Joan Walker, had an idea. What if they hired chauffeurs to drive random people around?

The chauffeur, Walker outlined, will do the driving for you. And, just like the most optimistic AV future of fully autonomous robot cars zooming around, you don’t even have to be in the car.

“All these things the self-driving car can do for you in the future,” Harb summarized, “a chauffeur can do for you today.”

The concept, once it reached published form, elicited praise and jealousy from other researchers. “It’s delightfully clever and brazenly simple,” gushed Don MacKenzie, head of their Sustainable Transportation Lab at the University of Washington. “I wish I had thought of it.”


For example, the chauffeur could bring the kids to soccer practice and back or drive a friend home and then return to the house. They could even pick up groceries and make a Target run to simulate a driverless car future where items could get bought online and loaded into your AV by a store employee before returning home.

Harb readily admits the study is not perfect, nor is it likely to prove the most accurate predictor of what our autonomous vehicle future looks like. But it is, by many estimates, the best first approximation we have.

And that approximation is, in key ways, a vision of things to come.

Harb thought they would see people sending their cars out more than if they were driving themselves, something like a 20 or 30 percent increase in VMT with the chauffeurs. Nothing to sneeze at, of course, but towards the middle of the wide range of the results the surveys had suggested.

He was wrong. The subjects increased how many miles their cars covered by a collective 83 percent when they had the chauffeur versus the week prior.

To put these findings in perspective, when researchers looked into the impact Uber and Lyft have had on urban congestion, they reported an increase in VMT in the single digits. San Francisco, which has seen some of the largest percentage increase of cars driving around in its downtown thanks to Uber and Lyft, had an increased VMT of 12.8 percent.

Knowing how much gridlock and traffic those rideshare cars have added to the city, imagine six and a half times as much car driving as that is almost impossible.


But none of the researchers Jalopnik spoke to believe those flaws detract from the overarching, real-world conclusion: AVs will change people’s behavior in profound ways. MacKenzie called it “probably the best data we have based on actual, measured behavior.”

There are places for self-driving cars, but the reality envisioned by folks like Elon Musk is a looks to be rather dystopian.

Little Bobby Droptables Lives!

It looks like someone has been reading the “webcomic of romance, sarcasm, math, and language, xkcd, and had developed, and has developed an SQL injection attack to wipe traffic cameras.

I am not sure if would actually work, but I am profoundly impressed about how life mirrors one of the most popular web-comics on the web:

Typical speed camera traps have built-in OCR software that is used to recognize license plates. A clever hacker decided to see if he could defeat the system by using SQL Injection…

The basic premise of this hack is that the hacker has created a simple SQL statement which will hopefully cause the database to delete any record of his license plate. Or so he (she?) hopes. Talk about getting off scot-free!

I do not know if it will work, but I am profoundly amused.

Link to XKCD cartoon:

Another Uber Setback

Now that governments are no longer terrified of Uber, much of the regulatory forbearance that has been essential to the success of their business is ending.

Case in point, New Jersey is now demanding back taxes and fines in the amount of $650,000,000.00:

Uber Technologies Inc. has been hit with an almost $650 million bill in unpaid employment taxes and fines from New Jersey, marking another setback for the ride-sharing firm as it struggles to prevent its drivers from being classified as employees.

Earlier this week, the state’s Department of Labor and Workforce Development demanded Uber and a subsidiary, Rasier LLC, hand over the amount for failing to pay employment taxes by, the state argues, misclassifying drivers as independent contractors.

The Labor Department said in letters sent to the firms that they owe $523 million in unemployment and disability insurance taxes for 2014 through 2018. The state added $119 million in penalties and interest.


New Jersey officials say that misclassifying employees isn’t fair to workers. They also estimate that misclassification across the workforce costs the state’s almost 250,000 employers an additional $300 per employee because of insufficient funding of the state’s unemployment insurance trust fund.

This is a company whose business plan was dependent on impunity for law breaking for their success, and now that regulators are no longer looking the other way, they are in a world of well-deserved hurt.

Scooters Break Down and Wear Out? Hoocoodanode?

It turns out that, much like the Gypsy cab companies Uber and Lyft, e-scooters have no path to profitability.

Scooters break, and they break after only a few months, which makes the plague of rental scooters unsustainable:

E-scooters really are the vaping of public transportation. They’re a safe alternative that’s somehow even more dangerous, and they’re incredibly popular despite being despised by every human being on the planet. They also make you look like a spoiled 15-year-old douche. But that’s not what’s hurting the e-scooter brand, which claims it’s close to becoming a billion-dollar industry … if only they could stop burning through scooters at breakneck speed.

I just love the phrase, “E-scooters really are the vaping of public transportation.”

It nails the situation in a nutshell:


So what’s causing Lime to leak money faster than the fluid out of one of their scooter’s cut brakes? According to them, it’s a matter of scooter “depreciation” — a shareholder-friendly way of saying that their product gets treated like crap. Rideshare companies have to spend a fortune picking up their scooters from whatever random patch of sidewalk their scootees ditched them like so much spent chewing gum. And then there are the constant repairs. According to Lime, their scooters only survive the mean city streets for five months (which is about four months longer than some other reports), thanks to a corrosive combination of elemental wear and tear, heavy/irresponsible usage, and people getting so mad at douches dropping them in front of their homes that they’ve started sabotaging them.

I’ve increasingly come to believe that Silicon Valley venture capitalists have no interest in the viability of a business, they just want to just hype the company until sufficiently stupid people purchase shares at the IPO.

As strange as it seem, it appears that they have actually begun to start run out of stupid people.

I do not see how this does not meet the legal definition of fraud.

Ha Ha!

If Uber loses its appeal on driver status, it faces over £1 billion in VAT to HM Revenue and Customs:

Earlier this week Uber London Ltd filed its full accounts up until December 2018 at Companies House.

The big news wasn’t that the division made a relatively meagre profit of £5.1m. (The profit is hardly indicative of anything due to the group’s structural complexity.)

It was Note 13 which recounted the following about Uber London’s contingent liabilities:


The most newsworthy part was arguably this one: “the Uber Group is involved in an ongoing dialog with HMRC, which is seeking to classify the Uber Group as a transportation provider. Being classified as a transportation provider would result in a VAT (20%) on Gross Bookings or on the service fee that the Company charges Drivers, both retroactively and prospectively.”

Uber London’s accounts do not provide any indication of the total sum being recorded as a contingent liability at Uber London’s parent, the Uber Group.

But various sources tell us the bill could be as large as £1bn, or more. These are not small sums.


This is a big deal because the threshold for UK businesses having to pay VAT at the time was a turnover of more than £81K (it’s now £85k).

Since Uber drivers mostly earn much less than that, most do not incur VAT liabilities. If Uber is deemed an employer, however, those revenues would then be deemed Uber’s rather than drivers’ — more than surpassing the VAT threshold and thus exposing the company to potentially huge VAT liabilities from then on.

So, in addition to cheating their drivers, they have been using their “Gig Economy” structure to evade taxes, and now it’s coming back to bite them in the butt.  Quelle surprise.

In related news, another scheme to cheat their drivers Uber’s auto insurance division has lost one of its underwriters, probably either because of the gypsy cab firm’s increasingly toxic public image, or because their risk reduction protocols, which would involve things like driver background checks, are woefully inadequate.

In either case, James River Group is claiming, “Pre-tax, adverse development of between $55 and $60 million,” which was enough for them to dump their largest customer and tank their own stock:

PEMBROKE, Bermuda, Oct. 08, 2019 (GLOBE NEWSWIRE) — James River Group Holdings, Ltd. (the “Company”) (NASDAQ: “JRVR”) today announced that it delivered a notice of early cancellation, effective December 31, 2019, of all insurance policies issued to its largest customer, Rasier LLC and its affiliates.  All insurance policies related to this customer are included in the Company’s commercial auto line of business within its Excess and Surplus Lines segment, and a majority of the insurance policies were due to expire on February 29, 2020.

“This account has not met our expectations for profitability, and we think it best to terminate the underwriting relationship as of year end,” said J. Adam Abram, Chairman and Chief Executive Officer of James River.

Uber doesn’t just f%$# its drivers, it f%$#s its suppliers as well.

H/t naked capitalism.