09 Dec 2018
Uber apparently thinks it’s worth 120 billion US dollars. One hundred twenty billion. With a ‘B’.
I’d like to say that’s the craziest thing I’ve heard this year, but of course it isn’t, because we live in some sort of rejected Coen Brothers / Mike Judge mashup script world. One where not only is the Pizza Hut Stuffed Crust Pizza™ guy in the White House starting a (not undeserved) trade war, but one where the most exciting companies to investors seem to have in common that they don’t actually… do very much.
A lot of people are coming out of the woodwork to point and laugh at Uber’s insane valuation, and I guess I’m merely one of them at this point, but I just don’t get it. I mean, I have no issue with Uber; I use “ride-hailing services”, as we have politely decided to call what used to be called (offensively, I have been informed) “gypsy cabs”—back in the antediluvian days of the late 20th century—all the time. At least in my area, Uber and Lyft still have the incumbent taxi companies over a barrel in terms of having a decent app-based hailing feature and predictable pricing.
But nothing that I can see justifies that valuation. A few people have tried to defened Uber’s business model, suggesting that they are easily quite profitable in more mature markets. While they may be profitable in the sense of not losing money, I question if they are really making the kind of money anywhere that would lead to the overall $120B number.
It’s not clear why they would be bringing in big profits, anywhere. Perhaps due to name recognition and app ‘stickiness’ (people really hate installing new apps on their phones, almost irrationally so) they can charge a bit more than Lyft or the next clone that pops up in a particular city (and a quick peek shows that they do, in the DC area, right at this moment), but there’s no sustainable advantage there. If Uber consistently charges significantly more than some other app-based rideshare service—e.g. Lyft, Curb—why would I continue to use Uber? Eventually that reluctance to install Yet Another Stupid App is going to fall in the face of the almighty dollar.
On the supply side—which is drivers—they ideally want to push down compensation in order to take more profits. But if they do that, drivers will (understandably) leave for a different app/platform. It’s not like Uber has done anything to promote loyalty among its totally-not-employees. So they can’t extract some large margin there, without creating an identical opportunity for somebody else to spin up a clone service.
Bluntly: what Uber is selling is a nearly-fungible commodity—getting somebody to come pick me up in their car and drive me somewhere. The path to compete with them is very clear, because it’s exactly what they did to begin with: pick some vulnerable markets and start there, doing local advertising, and then slowly expand. There are already a bunch of Uber/Lyft clones in major US cities, basically nipping at their heels if they try to either raise prices for riders (in which case they’ll peel off riders) or lower driver compensation (in which case they’ll peel off drivers).
So I just don’t see the potential for big profits. It’s a ride-hailing app. Everything else—including the possibility of scaling via self-driving cars—is VC-baiting fluff; it seems suspiciously like the “???” part of the Underpants Gnomes business plan. And there are other ride-hailing startups with equally snazzy secret sauces—some with scooters instead of cars, some with only electric BMWs, etc. The market seems primed for fragmentation, not consolidation.
As far as I can see, the only real differentiator they have is the uncanny ability to talk very rich investors out of their money, and then funnel that money to drivers and consumers. Functionally, that’s what Uber has been doing for years: it’s a significant, albeit unintentional, subsidization of consumer transportation, paid for by
greedy rich folks qualified investors with more money than sense.
But now that Uber thoroughly unstuck the logjam that was preventing new entrants from getting into the transportation market, there’s no reason to believe that they’re immune to market pressures. Brand loyalty is only going to carry them so far.
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08 Dec 2018
For reasons not immediately apparent, Verizon has decided to take Tumblr out back and put a bullet in it.
Verizon, in its guise as “Oath Inc.”—a spectacularly villainous-sounding name if I’ve ever heard one—seems to exist as a sort of garbage disposal for formerly good ideas. Their porfolio is a sad list of stuff you could be forgiven for thinking closed up shop years ago—oh, hey, MapQuest!—which they apparently think they can “build” into… something.
Oath Inc. is a weird creature, formed out of the questionable acquisitions by Verizon of the remains of AOL and Yahoo. Their motto is “Build brands people love”, which is the sort of thing that no well-adjusted human being would have come up with or say with a straight face. And their website follows that up with “We are […] pouring our hearts and smarts into building brands” which is just depressing. Jeez, go build killer robots or something, at least it’s an honest living, and probably less embarassing to talk about at a party.
Anyway, exactly how Oath’s business model works is unclear, and it’s got more than a whiff of Underpants Gnomes going on. It seems somewhat unpleasantly reminiscent of the people who allegedly buy old racehorses and run them to death at the minor-leagues racetracks, hoping one might get lucky and win big before it breaks a leg or gets shipped off to become dogfood and glue.
If that’s the proper analogy, and I see little reason why it isn’t, apparently Tumblr has run its last race and is en route to the Mexican horsemeat plant. There’s just no other way to look at banning NSFW content on a platform that’s at least double-digit-percent porn.
The reason to ban porn is because advertisers don’t like it. For a variety of reasons, companies don’t think that ad impressions on porn sites are worth as much as non-porn sites, although I’m not exactly convinced that this is based on hard (ahem, sorry) data. But the NSFW content on Tumblr, which existed because of a conscious choice on the part of the original owners to take a tolerant approach, was one of the site’s key differentiators.
Even people who didn’t go to Tumblr for porn were, in many cases, going because of the presence of communities—those all-important “network effects”—which were on Tumblr because of either the tolerance for NSFW content directly, or in some cases the tolerant attitude more generally. Tumblr built a reputation as a ‘safe space’ (though not always), in some cases for highly-marginalized communities, including folks who often end up on the wrong side of content cops. (Sites that allow users to “flag” content for removal, which Tumblr has done, are often particularly biased against even nonsexual GLBT content. It turns out that people are very bad about deciding why something offends them, once they decide that it does.)
So the Great Tumblr NSFW Purge has begun, and like a bonfire of a billion Playboy magazines, some of the content will doubtless just go offline and never be recovered. Even if most of that content isn’t to your personal taste, that’s still unfortunate.
More unfortunately, it’s not clear yet where disaffected Tumblr users—and at this point even the most milquetoast Tumblr users should probably be considering what’s next—are going to go.
Movim has positioned itself as one path off of Tumblr; it’s a fully-decentralized (or at least, decentralizable) solution based on XMPP. Apparently it uses XMPP to propagate updates and hashtags from one instance to another, allowing a user experience similar to an integrated platform like Tumblr, even though each user’s blog could be running on a separate machine (which could be a Raspberry Pi in their bathroom, for all you know). It also does chat and other real-time messaging, since it is XMPP under the hood. And they even have a Docker image!
Plume also seems like a possibility, but a quick glance seems to put it more in the vein of Wordpress than Tumblr. But Tumblr users who were actually using Tumblr for blogs, as opposed to images with small amounts of commentary, might find it a good match. (I’m keeping an eye on Plume as a possible down-the-road replacement for this blog.)
Either way, much community-building stands to be lost in the transition, unless groups of users can decide on an alternative platform and move en masse.
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09 Nov 2018
Reading a Metafilter post on “The End of Big Ag” (spoiler alert: probably not the end of Big Ag) got me curious about the feasibility of cities growing their own food, and exactly how much land it takes to keep a person fed. So I did a little napkin math.
tl;dr: It’s theoretically possible, I suppose, for a city to grow its own food, but it would be a huge challenge. Current cities can’t do it.
Dent corn has the highest calorie yield per acre of any row crop, at least of those commonly farmed today. (Potatoes are close, and the highest-performing root crop. I think the highest-yielding perennials are bananas/plantains, but not sure.) The average yield for field corn is 171 bushels/acre (although that’s always going up, and probably with effort it could go higher—but we’ll stick with typical US farming practices), at 56 pounds per bushel of edible corn, and ~1500 nutritional calories per pound, that’s about 14 million calories per acre under cultivation. An active person needs about 1 million calories per year (though at 2k calories/day it’s actually only 730k, but we’ll assume city-dwellers walk more than us lazy suburban schlubs).
So just as a low bound, absolute minimum, you’d need 1 acre under intensive row-crop-style cultivation for each 15 people, and that assumes zero waste during food preparation and service, etc. (Also, hope people figure out how to make hominy, or pellagra is going to be the cool new look next season.)
There are supposedly 1200 acres of flat-roofed commercial buildings in New York City suitable for rooftop farming. So without changing existing land-use patterns, you’d only be able to feed about 18,000 people.
This report on land use and tree cover in NYC (PDF) suggests that there are about 30,000 acres of land currently covered with “Grass or shrub area that is theoretically available for the establishment of tree canopy.” Or, in a pinch, food crops. And that’s without cutting down any trees. That’s another 900k people. If you’re willing to bust out the chainsaws and jackhammers and start using all the land currently covered by trees and arguably-useless impervious surfaces (not buildings or roads, but parking lots, plazas and the like), the sort of thing you might do out of desperation, you can get 120,000 acres. At two harvests per year — which is probably doable with the right type of corn — that’s 3.6M people fed. In a city of 8.5 million I’d still be very suspicious of what the hotdog vendors were selling.
Basically, there’s no way to do it given how cities are currently structured. If the transportation system that brings food into a major city like NYC stopped working, at best you’d be able to sustain a fraction — not an insignificant fraction, but under half, best case — of the current population. This shouldn’t be a surprise: modern cities are shaped, by transportation, so we’d expect that they wouldn’t exist without it.
It’s probably possible to design a city that isn’t as dependent on long-distance transportation as current US cities are, perhaps by using greenbelts, but there’s no real current-day economic incentive to do so. Long-haul transportation, particularly of bulk foodstuffs like grain, is very cheap — even a significant uptick in the price of oil probably wouldn’t do it. Only some other incentive, or top-down restrictions on development, would keep farming close to cities.
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