Date: 2024-09-27 Page is: DBtxt003.php txt00013603
Technology / Governance
Rapid Change
Nuber – The End of Uber and Central Authority
Rapid Change
Nuber – The End of Uber and Central Authority
Original article: https://www.shellypalmer.com/2017/08/nuber-end-uber-central-authority/
Peter Burgess COMMENTARY
When I was in the middle of 'management' a long time ago, I became very aware that few big decisions were simple ... there were always a complicated mix of 'pros' and 'cons'.
In many ways the modern world has become more difficult to navigate and to choose the optimal mix of policy options. In addition to what one might call the tangible real world is supplemented by a massive 'algorithmic' world that offers an unpredictable mix of brilliance and total dumbness with zero judgement.
Going back to my early career ... I was responsible for a number of main-frame computer installations in the early years of corporate computerization and I remember advocating for less volume of data and better utility of data. I saw company after company get into operational and financial trouble because their computerized data was quick, voluminous and wrong. I remember Yale Trucking going out-of-business because of its computerized truck loading system that had most trucks travelling with only about 30% of the optimum load. Yes ... computers can be great ... and they can also create disaster, and do these things very rapidly.
Fast forward 50 years or so and there is a similar mix of amazing and absolutely awful in the tech space. A small number of companies have figured out how to make an enormous amount of profit from technology, but they have done rather little to ensure that the technology enabled benefits are not offset by all sorts of negative impacts that are also happening, but not put into the record in a useful way if at all.
Peter Burgess
Written by Shelly Palmer
August 6, 2017
A recent study found that “drivers were finding ways to trick the algorithms that Uber uses to control them to cancel fares they didn’t want and to avoid the unpopular UberPOOL.” The same study found that drivers “also organise mass ‘switch-offs’ so the lack of drivers in a certain area causes surge pricing.”
This should surprise no one. Many Uber drivers feel (rightly or wrongly) that they are underpaid, overworked, and generally treated unfairly. The drivers have tried to unionize, they ad hoc collectively bargain, and they have vigorously campaigned on social media to protest their work conditions.
A Central Authority
At a macro level, they are not unhappy with Uber; they are unhappy being subservient to a central authority. This is not a new story. History is replete with tales of the oppressed proletariat rising up against their aristocratic overlords. Revolts of this type have not, historically speaking, ended well for the noble-born.
As I have previously written, “The entire Internet is highly centralized. Data are routed through trusted servers on trusted networks. You trust Google with your Gmail. You trust Facebook with your friends. You trust your online banker with your money. You trust your credit card and shopping data to Amazon. You trust Verizon when you access its network. To do business online today is to trust central entities with everything about you and your actions.”
What If There Was No Central Authority?
Here’s an idea … I’ll call it “Nuber.” You can think of it as a technology that offers all the value Uber offers, but the drivers get all the money. Here’s how it would work.
At Nuber, a licensed ride-sharing service driver (an individual with a local business license, a commercial driver’s license, and the required insurance) could be summoned through a meta-ride-sharing app and paid directly with no central authority such as Uber, Lyft, or Didi Chuxing. There would be no middleman, just you and a licensed, customer-reviewed driver. Nuber would work exactly like Uber, but all the value captured by Uber would be recaptured by the drivers. Great for the drivers, not so great for the central authority, Uber.
Now, apply this idea (a trusted decentralized network) to every type of on-demand business. In this new sharing economy, chatbots or meta-apps or a simple search would yield a list of accurately reviewed (only by customers who had purchased the goods or services as verified by the underlying technology) vendors in merit order.
Now, imagine if you had software on your smartphone that would do some quick math (optimal stopping or multi-armed bandit calculations) to determine which offer was best for you at the moment you were in the market. How different would the sharing economy be if everything you wanted to share was offered in a giant real-time auction with no middleman, no central authority, just a free market based on supply and demand?
Blockchain
The technology that will empower trusted decentralized marketplaces is here. It’s called blockchain, and this may be the year that it breaks free from the shackles of super-hype.
As you know, blockchain is closely associated with Bitcoin and other cryptocurrencies. That’s because, as of this writing, all cryptocurrencies require blockchain. However, there are many other uses for blockchain that have nothing to do with cryptocurrencies. There are hundreds of startups (and internal projects inside big corporations) working hard to make blockchain mainstream – there are too many to mention. Just Google “blockchain startups.” They’re all the rage.
What Is Blockchain?
Often referred to as a “distributed ledger,” blockchain is a continuously growing list (digital file) of encrypted transactions (called “blocks”) that are distributed (copied) to a peer-to-peer (P2P) network of computers.
Encrypted transactions are the key to blockchain’s value. The user’s “public key” is stored in the block and becomes an “address” on the blockchain. Files, such as cryptocurrencies or other digital assets, are recorded as belonging to a specific block. A corresponding “private key” is required to access the associated digital assets. (Keeping your private key private is so important that to protect their digital assets from hackers, many people do not keep digital copies of their private keys. They write the number on a piece of paper and keep the paper in a secure location, like a wall safe.)
P2P or mesh networks are decentralized computer networks where each computer (node) acts as both a client (a computer that accesses information on a server) and a server (a computer that serves information to clients). At scale, P2P networks are self-healing and very stable because the information is replicated in thousands, and in some cases millions, of places.
There are two general types of blockchain networks: anonymous networks, where each user has a copy of the entire blockchain and helps process and confirm transactions; and permission-based (non-anonymous) networks, where permission is required to possess a copy of the blockchain and to help process and confirm transactions.
When Will Nuber Exist?
Blockchain is about to transition from a potentially valuable technology to a revenue-generating technology. This will occur as the hundreds of startups working with blockchain and smart contracts (contracts that digitally report whether or not their conditions have been met) start to bring their solutions to market this year.
The only things standing in the way of the new Nuber are a few motivated individuals, a GitHub account, and enough chocolate-covered coffee beans to keep the teams awake while they work on it. Which is the whole point. There’s basically nothing standing in the way of this new approach to economic equality. Is this really the end of Uber? Probably not. Nuber is just an idea (and a trademark infringement lawsuit waiting to happen). But it will be exciting to see how trusted, decentralized network technologies change the world.
Uber drivers are gaming the system and even going offline en masse to force ‘surge’ pricing.
In an extensive study researchers found that drivers were finding ways to trick the algorithms that Uber uses to control them to cancel fares they didn’t want and to avoid the unpopular UberPOOL – where drivers have to take multiple passengers who are heading in the same direction.
Drivers also organise mass ‘switch-offs’ so the lack of drivers in a certain area causes surge pricing where Uber can charge passengers more because of the high demand of customers but little supply of drivers, giving drivers a bigger slice too.
The ride-hailing app, which operates in 570 cities worldwide and is valued at $68 billion, has been plagued by controversy about its questionable management practices. Now a new study by Mareike Möhlmann and Ola Henfridsson, of Warwick Business School, and Lior Zalmanson, of New York University, has unearthed details on how Uber drivers are fighting back against the “algorithmic management” used by Uber.
Dr Moehlmann said: “Uber uses software algorithms for oversight, governance and to control drivers, who are tracked and their performance constantly evaluated. “In response, drivers have developed practices to regain control, even gaming the system.
Mareike Mohlmann ... “It shows that ‘algorithmic management’ that Uber uses may not only be ethically questionable but may also hurt the company itself.”The researchers interviewed drivers in New York and London and analysed 1,012 blogs on the UberPeople.net platform and found a mass deactivation organised. On the platform Driver A said: “Guys stay logged off until surge.” Driver B said: “Uber will find out if people are manipulating the system.” Driver A added: “They already know cos it happens every week. Deactivation en masse coming soon. Watch this space.”
Professor Henfridsson added: “Drivers also either accept the first passenger on UberPOOL then log off, or just ignore requests, so they don’t have to make a detour to pick anybody else up. They then still pocket the 30 per cent commission for UberPOOL, rather than the usual 10 per cent.”
And despite it being part of the agreement drivers ignored UberPOOL requests. Driver A said: “After about 2-3 days of ignoring them you will not receive anymore. I have not received an uberpool request in months. I guess uber thinks they are punishing me by not sending me any more… poor me. LOL.”
“There are real tensions between drivers’ need for autonomy and a platform programmed to be always in control,” said Professor Henridsson. “Uber’s algorithmic management system may even be counterproductive as drivers try to break free of it.
Ola Henfridsson ... “Indeed we found most also operated alternative ride-hailing platforms such as Lyft, Juno, and Gett, using whoever provides a ride first.”Under constant surveillance through their phones and customer reviews, drivers’ behaviour is ranked automatically and any anomalies reported for further review, with automatic bans for not obeying orders or low grades. Drivers receive different commission rates and bonus targets, being left in the dark as to how it is all calculated. Plus drivers believe they are not given rides when they near reaching a bonus. The compensation for UberPOOL, which drivers have to agree to do or be banned, is even more complex. Drivers are forced to accept different passengers on the same ride, even though it is not economically beneficial to do so.
“The drivers have the feeling of working for a system rather than a company, and have little, if any interaction with an actual Uber employee,” said Dr Lior Zalmanson. “This creates tension and resentment, especially when drivers can only email to resolve problems. Uber’s strategy is not at all transparent, drivers do not know how decisions are made or even how jobs are allocated and this creates negative feelings towards the company. “So they fight back and have found ways to use the system to their advantage.”