“Uber is a bezzle,” says Cory Doctorow.
A “bezzle,” he explains, is “the magic interval when a confidence trickster knows he has the money he has appropriated but the victim does not yet understand that he has lost it.”
“Every bezzle ends,” Doctorow points out. “Uber’s time is up.”
Doctorow made this blunt statement on August 10th on his website “Pluralistic” in a piece subtitled “Accounting tricks and tech gimmickry don’t matter when the coffers are empty.” Visit Doctorow’s site here to read the impressive, exhaustive series of links he has compiled presented with accompanying colourful explanatory text.
Highlights of the piece include:
- “Uber was never going to be profitable. Never. It lured drivers and riders into cars by subsidizing rides with billions and billions of dollars from the Saudi royal family, keeping up the con-artist’s ever-shifting patter about how all of this would some day stand on its own.”
- “Uber didn’t need self-driving cars – it needed us to think it would have self-driving cars. That way the company’s Saudi owners could raise investment capital from subsequent “investors” (AKA “suckers”) all the way up to the IPO, cash out, and walk away, whistling innocently…that’s the bezzle at work – a dazzle op that keeps new money flowing in, convincing people that a pile of shit this big must have a pony beneath it. But as the years went by, the stories that Uber told us about its path to profitability got more and more fanciful.”
- “Meanwhile, Uber predated upon restaurants, using SEO to trick people into thinking they were ordering from restaurants directly, nonconsensually opting restaurants into its delivery service, subsidizing meals to set prices below break-even…once Uber had diverted a restaurant’s customers into relying on its service, it put the screws to restaurants, forcing them to pay “marketing fees” on pain of having searches for their business diverted to Uber-affiliated ghost kitchens.”
- “Uber loses a lot of money. A lot of money. Billions. But it claims it’s making How does it do this? It lies. Uber eschews boring old generally accepted accounting principles (GAAP) and invents fanciful new forms of mathematics where losing money is good, actually.”
- Uber’s cash reserves declined by $4.7b in 2020 and $937m more in the first half of 2021. They’ve got $6.7b in the bank, down from $14.6b in 2019. To increase the appearance of a pony under this shit, Uber’s invented a new field of accounting: “Adjusted EBITDA profitability.”
EBITDA is “earnings before interest, taxes, depreciation, and amortization.””Adjusted EBITDA,” Doctorow notes, “is ‘bullshit.’”
***
Click here to visit the Pluralistic site to read the entire article with all of the accompanying links:
https://pluralistic.net/2021/08/10/unter/#bezzle-no-more
