Uber’s foray into public services is part of a broader trend of technology firms pitching their services to cash-strapped municipalities and governments. They do so in the hope of convincing local authorities that the company’s superior ability to gather, analyse and act on data would yield tremendous savings for the public sector, while stimulating innovation and entrepreneurship.
It all began with an explosion of “smart” programs – with “smart” nothing but a euphemism for “privatised”. From smart cities to smart elderly care, the promise has been to retrofit crumbling public infrastructure with the shiny and privately operated gadgetry that can get the job done on the cheap.
“Smart” might no longer be a sexy adjective but its spirit lives on. Online home rental company Airbnb is building community centres in Japan, probably betting on the fact that the rapidly ageing Japanese population would inevitably push the government to search for an “Uber of smart ageing”. With all the data they have accumulated about our travel and living habits, Airbnb could, in fact, be in a perfect position to build social housing that might actually be fit to live in.
A similar fate has overtaken Alphabet’s other “moonshot” ventures: Project Ara – an effort to make a modular smartphone out of interchangeable components – has just been suspended, joining the likes of Google Glass. Nest, the subsidiary that produces “smart’ thermostats, is also doing badly, with its former CEO Tony Fadell moving on to other projects and its staff reassigned to work on the “smart home” instead.
Nest, too, was once pitched as a welfare-enhancing device: some insurance companies, having struck deals with Alphabet, offered Nest smoke detectors to their customers free of charge, in exchange for their data.
Uber’s tempting offers are also far less straightforward than they appear. Its fares are, indeed, extremely low – which makes it very attractive to consumers and local governments alike. But such low rates mask layers of subsidies and tenuous assumptions that might or might not pan out. Uber’s low rates are premised on two developments: its ability to dispense with its drivers altogether – thus significantly reducing its labour costs – and the continuation of its impressive and virtually unopposed growth in every important market.