Whew. The episode featuring four white men opining about race and gender in tech is almost over, and the sting of the decision by Uber to cut into early-bird bonuses for some early-stage employees seems gone. But the episode probably won’t be quite over until the public rethinks its relationship with and judgment of the ride-hailing company.
Uber’s bad behavior clearly got a bum rap, but it was no worse than a lot of other tech companies’ bad behavior. Lots of startups have a long way to go before they learn to treat women and minorities in equal and respectful ways.
That said, it does seem that Uber set a hard precedent for other companies when it penalized early-bird bonuses. To me, the more interesting question is what effects that decision will have on Uber’s product — and also on Uber’s prospects.
Uber has been considering price changes for quite a while, which explains a lot of the deck shuffling I’ve been seeing. If Uber wants to introduce new features, or to use higher prices to keep vehicles moving on schedule, it has to get its business to hit another key revenue target. So far, it’s been a bumpy ride, with the number of U.S. drivers dropping substantially in recent years.
Here’s what Uber has said about the shift in the early-bird bonus program, which will go into effect on May 18. As I mentioned, Uber has several major initiatives planned. They include building out the infrastructure for its new part-time drivers and improving the drivers’ experience in what used to be a centralized software system, which may lead to higher prices. And they include some of the things I mentioned above, as well as the use of higher prices to improve management of vehicles that were lower on the to-do list of drivers and customers.
I don’t think the sudden cutoff of early-bird bonuses will reduce the rollout of new features to drivers, however. That’s likely to happen slowly, with improvements as technology keeps improving. Uber may not have much new to offer drivers, but the quicker it can make its service more appealing, the fewer drivers it’ll need.
Taxi drivers — who are understandably annoyed at Uber’s actions, but also should remember that they don’t have the same potential for wholesale employment destruction — have a different picture. Driverless vehicles could put many independent-contractor drivers out of work, since the most logical way for Uber to serve the needs of both drivers and passengers would be to set up a platform for self-driving cars. So they’re curious to see what happens when Uber launches its own self-driving cars, since they may be facing tough competition.
But as we saw last week, Uber now has an immense network of drivers — and presumably plenty of them would join a competing ride-hailing company if Uber switched to self-driving cars. And if Uber expands in New York City, all those drivers who could become transit workers, not Uber drivers, will get a lot more competition there, at an even higher cost to consumers.
Uber could, of course, change course. One possible way is to develop its self-driving technology itself. That would mean staffing up more quickly, with hundreds of people on the Uber X team I wrote about in January. I’m sure they would do a great job, but Uber really needs to start preparing a strategy that doesn’t depend so heavily on licensed drivers, starting now.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.