Obviously everything I say is personal experience and opinion.
I think the layoffs were long overdue and should've happened sooner. There was a general understanding between my coworkers and I that Uber definitely over hired in 2016. Thanks to that a lot of engineers ran out of things to do which led to political infighting over roadmap, ridiculous redundant resourcing - every single team had mobile/web, severe shortage on infra teams since head count was already taken by main Uber teams. We even started building and maintaining our own chat app. I disagree that all the cool eng project that we put out and share here is a waste of time or resources. Those project was initiated by real needs on Uber and only the best make it out into the rest of the world. Engineers that shipped those projects are still here and we would've done it regardless of whether the 435 people that were hired in the first spot. I fully realize that it's an insensitive thing to say but I think it's important that it's expressed somewhere.
I think the lesson here is to grow responsibily, and it's real people's lives that are being affected. Don't hire people to alleviate your current engineer's burnout and stress. Learn to plan better and to prioritize aggressively instead of just hiring and getting everything done.
> We even started building and maintaining our own chat app
God I love the Not Invented Here disease. Somebody, somewhere, thought "hey, slack is way to expensive, we don't want to get 'locked in', and 'mumble mumble privacy cloud evil stallman' so lets write our own chat application.... how hard can it be?"
Boom, now the company is straddled by a shitty, homebrew chat application that is maintained by nobody because the original author left for greener pastures. Nobody dares replace it though because that would be sacrilege. That chat app is part of the company, after all!
Arg.... I hate, hate, hate when engineers with a bad understanding of business and too much time on their hands lock their organisations into homebrew crap that has nothing to do with the value delivered by the business.
> Somebody, somewhere, thought "hey, slack is way to expensive, we don't want to get 'locked in', and 'mumble mumble privacy cloud evil stallman' [...]
Like I completely agree with your overall point about reckless overengineering, but you also just listed three true and really good reasons to avoid integrating Slack.
I setup an enterprise-grade Mattermost server in a weekend. The hardest part wasn't even Mattermost itself, but getting SMTP working reliably in the age of DKIM/SPF/DMARC policies. This could be sidestepped by using any of the well-established email providers.
No reason to use Slack when such options exist, but also no reason to write your own chat app, either.
That kinda sucks the air out of this whole thread. "that's not entirely accurate" is a bit of an understatement. But, don't let facts get in the way of a good rant!
Mattermost has been rock solid for the last couple of years for my team BTW.
> The hardest part wasn't even Mattermost itself, but getting SMTP working reliably in the age of DKIM/SPF/DMARC policies. This could be sidestepped by using any of the well-established email providers.
This is valid not just for Mattermost but many other apps that support sending e-mails. And that's why it's important that instead of giving up and outsourcing it, we all try to set it up and have first-hand experience in challenges we have to face in the process. Because if everybody just uses Mailgun & SES, in a decade or two it won't be be possible to set up your e-mail server anymore (of course you will be able to, but your e-mails won't reach most customers).
> of course you will be able to, but your e-mails won't reach most customers
Unfortunately, I found this to already be somewhat of a reality. Even with all the best practices I went to, many MTAs simply don't trust my IP address. Most "sane" MTAs seem to greylist me rather than blacklist outright, so it just adds a bit of delay to users receiving their emails. Thankfully it seems to be gradually getting better, but gone are the days of simply pointing your apps at sendmail letting them go.
What's interesting is setting up a handler for DMARC aggregated feedback reports. I determined that it's not worth doing yourself, even Microsoft do not handle their own DMARC reports.
I ended up outsourcing DMARC report processing, if I wanted to do it in-house I'd have to setup and maintain an Elastic stack[1] which seems like huge overkill.
Let's not pretend that hosting an OSS chat server is a walk in the park for every enterprise just because you personally got one up and running in a weekend.
I'm not necessarily in the 'build one from scratch' camp either, I'm just pointing out that there's a trilemma in enterprise systems. How fast you're able to get something up and running is just one factor and not always the most important one.
Looking at this from Spain, you did do this over the weekend. I also work 6 days a week—but my hope is that this didn’t take the place of building a family, having a relationship, finding a relationship going for a hike in the mountains, citizen science, or making art. Your weekend is valuable!
You're totally right that the weekend is valuable, but some people enjoy doing this sort of thing with their free time. It's not anyone's place to decide what anyone else does for entertainment or self improvement. That is to say - what is not valuable to you might be valuable to someone else.
My comment isn't concerned with using 'personal' time for such endeavors. My concern is with the implicit conclusion that how fast you can get something up and running (a 'weekend' in this case) is an argument that you can and should deploy a new stack in any given enterprise.
You'll find a lot of times the champion of the new hotness moves on and leaves someone else to maintain the old hotness at costs that were never factored into the original deployment.
As I noted in another comment, it's a trilemma where you have to pick and choose your battles. The initial deployment time is rarely the most important factor when introducing a new stack within an organization.
When large MMO guilds have had a mostly trouble free chat client that supports a few thousand concurrent users on the free time and good will of admins I'm loathe to believe that this shit is impossible
I'm not sure how you read from my comment that I'm saying 'this shit is impossible'. I'm simply saying in many organizations 'how fast the intern got it up and running' is not always a valid indicator of how ready it is to be deployed to a few thousand concurrent users.
For example, large MMO guilds have a quite different regulatory environment from, say, a large healthcare organization in the US governed by HIPAA. It's an extreme example, sure, but a homegrown, dumbed down solution, might be the only way to ensure regulatory compliance.
It doesn't take a lot of imagination to come up with other scenarios. I can't defend Uber doing it because I'm not involved, but large MMO guilds are not archetypal of enterprise systems.
If the company relies on Mattermost, I would assume they'd need at least one maintainer per ~100 users, just to make sure that the SMTP keeps working reliably, there are backups etc. One person to maintain Mattermost would cost a company at least 150000 USD in the bay area. That's $100+ per month per user. Slack is way cheaper than that.
Really, 50 maintainers for a 5000 user system? I'd think it scales much better, probably 2-3 people for the whole company. And in that case, it can quickly be cheaper than slack
I think you are really underestimating the bureaucratic overheads in a large company. It is not the same as a 3-person startup serving 5000 customers. Of course I pulled that number out of the air, but the point is that it can make sense. I think I am right around the ballpark of needing a 5 people team to serve 500 users - you'd need a minimum of 3 people just to make sure there is enough redundancy if one person is sick or goes on vacation. You'd need 24x7 on-calls. The scaling factor probably changes after that - may be it is 10 people for 5000 users instead of 50.
Adding to other large company problems, these people will need management layers, the team will need a charter for growth. Who wants to be the maintainer of the Mattermost servers in a large company? Add all of this up and then the slack deal starts to look reasonable.
Edit: Just to add some real numbers, slack costs $12.50 per user per month [1] - that is ~$750k per year for 5000 users = 5 engineers. (More like 3 really in the Bay area)
Your general point is solid, but one quibble with the numbers - even the pricing page has an "enterprise" tier "for very large businesses".
There's no way a company with 5000 Slack users is paying the sticker price per head - they'll call Slack's enterprise sales team and negotiate some volume discount with whatever shiny enterprise-grade features, SLAs, support guarantees, etc. they need.
Lol, where did you get the idea that smtp servers need more maintenance as users increase? What if I told you I’ve witnessed a team of 3 manage a mail system of a university of over 100k active email accounts?
We are a company with around 100-150 employees, using Mattermost in a real Enterprise setting for years now (with SSO, CI and mail integration and whatnot) and that server is being maintained by our admin team basically "on the side" - nobody was hired specifically for this job, as it does take less than 20% of one person's time according to what the team says.
These Bay Area tech people must be either incredibly inefficient (especially when comparing to what they get paid), or your estimate must be waaaaay off.
From my experience that kinda makes it worse because constantly people will say "X has this now this add that" and it's normally a case of "Well that's a ton of work to do because we did Y".
It takes 1 person a few percent of their time to manage something like that for internal use only. And you still get the gains of keeping secrets internal and cost savings on licensing costs which might actually pay for a good chunk of the effort in the case of running an existing service.
Compare with a small development team for a significant percentage of their time to build a halfway decent chat tool.
Heh, this is the story of how Slack got built. Slack was built as an internal tool while building Glitch, an online game. From Wikipedia:
> Slack began as an internal tool for Stewart Butterfield's company Tiny Speck during the development of Glitch, a defunct online game.[13][14] "Slack" is an acronym for "Searchable Log of All Conversation and Knowledge.
Some day, Stewart Butterfield will launch a gaming company that is successful in the gaming space instead of becoming the inspiration for an entirely unrelated startup.
"Enterprise" slack is $15 per head per month. This would equate to an recurring annual expenditure of nearly $4.86million for Uber's 27000 employees.
Given that Slack can be seen as IRC with some pretty decoration glued up to an Elasticsearch instance, and that Uber already has a highly trained tech org in place, if it wants to make a Slack "clone" for less than, say, $25million (cost of Slack to Uber for 5 years), it could actually be a pretty sensible decision- especially when you take into account the tax and stock-price benefits of capital expenditure.
Unless NIH/buy are truly the only options. `docker run whereverthatactuallyis/mattermost` looks like a cheaper option that doesn't require building from scratch.
Not directly related to mattermost and Uber, but companies tend to list clients even if the product is not widely used or was even dumped.
You are a small team in a big company, you evaluate a product and find that it satisfies some of your basic needs but want to work with it for a while, so you purchase a couple of licenses for you team but stop using it after a year or two.
+1 for mattermost. Works out of box for most applications. But I think people will find it surprising how quickly one starts to run out of space. People can be very chatty.
As other replies have said, with a high user count, they've likely negotiated that per head figure WAY down.
But even if they didn't, it's not as simple either as "can those engineers clone this software for less than X", it's whether they can afford to take the opportunity cost of not having engineers work on something core to Uber's business.
I take it you mean Uber? I find it hard to believe Slack has 27000 employees.
Anyway, as another commenter pointed out, on an enterprise scale I'm sure you can get a good deal. I can also imagine however that at that scale you'll want multiple Slack servers / instances - which would add cost given how slack charges per person, per server.
So there's a few alternatives then; self-hosted (some parties will offer enterprise customers the option to host an instance of their application on the customers' internal hardware), or rebuild it yourself. The latter one however takes a bit of math - how much is it going to cost to build, maintain and run it? It's easily underestimated.
And yet, it's also easy for people working in an engineering culture with nearly limitless engineering capacity to just build it themselves - motivations being "how hard can it be", and "I need something more challenging than tweaking this button for my employer to earn 0.1% more money on this particular feature". I've seen it happen far too often.
Slack was evaluated a few times. The reason it was initially rejected when we first considered it is because it wasn't able to handle our scale at the time and the team over at Slack was not interested in prioritizing scaling for us over other things on their product roadmap.
Interesting. IBM adopted Slack just fine, back in 2016. I believe they've got at least 100k employees in their Slack workspace. Not sure if it's Slack or IBM doing the hosting/scaling for it, though.
There is a cultural difference between Uber and IBM which would explain why Slack didn’t shown its limits at IBM: Slack people belong to a startup which typically wouldn’t mind get everything done in a chat; whereas IBM is a 100+ years old company where everyone has to fill a paper form and managers type with two fingers (Source of this specific example: I’ve worked with IBM consultants with one of their products). Chat apps do not play the same role in each.
What about all the other chat apps? Why wasn't the whole thing dumped into a pile of hot lava the second slack could scale to an org the size of uber?
What what does scale mean anyway? Just employees using it or employees + contractors?
It's easy to armchair quarterback on this stuff, but I find it hilarious how tech companies that employee supposedly smart people justify writing this kind of stuff. I'm sure some junior engineer did a cost/benefit that completely neglected the total cost of ownership for writing a chat app and focused on the sticker shock of having to pay tens of thousands a month for a chat app.
Were these actual concerns that were raised by the actual legal council of the company, or were they issues invented by engineers who are not lawyers but suffer from engineers disease and think that knowing to code means they are experts in everything else? 'Cause I know plenty of those!
I've worked in plenty of companies with engineers who think they are legal, privacy and security experts. If we made business decisions based on these folks, we'd never do anything. Hell, every damn text change we makes invokes a few who worry about the legal ramifications ("should we file a JIRA ticket with legal?").
Sadly without somebody stepping in, people actually listen to them instead of the actual experts employed by the company... thus you wind up wasting tons of engineering bandwidth building a feature / platform / product that has no business existing all (or worse, not building some feature / platform / product) because nobody bothered to check with the legal / privacy / security team that some concern by a engineer was actually a genuine concern.
And even then, in any good organization legal / privacy / security teams exist only to point out all the risks in any business decision... sometimes it is worth the risk despite what legal / privacy / security say. What appetite the company has for the risk depends on a lot of things that are well outside of legal/privacy/security.
> Were these actual concerns that were raised by the actual legal council of the company, or were they issues invented by engineers who are not lawyers but suffer from engineers disease and think that knowing to code means they are experts in everything else? 'Cause I know plenty of those!
the general counsel and thus the entire legal org required for any company approved comms system a way to automatically by default destroy chat logs after 7 days (and to turn that off for folks who were on legal holds). slack in 2016 did not have that capability.
Not sure why the parent is down voted. I have worked in financial services and had the same experience. IT typically held a view on the interpretation of rules and regulations that was far more literal and restrictive than the actual compliance officers.
it was the privacy/legal/security types driving this strategic decision, I can't really talk about it in more depth. A lot has changed since the decision was made, and if I personally was to reassess the situation now I believe I would go with a 3rd party SAAS solution, but back then building a chat app was on balance the correct decision to make.
> it was the privacy/legal/security types driving this strategic decision
Booo on legal.... like I said earlier, it's easy to armchair quarterback. Sometimes I wonder how the fuck humanity even manages to make progress with so much waste and boneheaded decision making.
AWS is the opposite of homebrew. Lyft has no business maintaining its own data centers and operational overhead. There is a huge opportunity cost involved with running your own infrastructure. AWS and the like free your own teams from worrying about how to provision new systems, upgrading DB server versions, etc. Running your own data center is hard.
Running your own DC is the same as building your own chat app. It is almost always more expensive and almost all the people who claim they can do it cheaper inhouse aren't factoring in all the costs--both costs that are easy to measure and those that are almost impossible to measure
Examples of hard-to-quantify costs for running your own infrastructure include:
- What is the cost to the company of being three versions behind on mongo because IT doesn't have the bandwidth to upgrade? How many work-arounds do teams have to do because they couldn't use the latest features of mongo?
- What is the cost to the company when developers cannot quickly spin up new environments like they could using a service like heroku?
- How much innovation and new business (read $$$$) is not happening because the in-house IT simply doesn't have the toolset so a dev can quickly riff on an idea?
- How many engineers have good ideas and don't bother building them because spinning up an environment is too much trouble?
I'd argue by not using AWS you are holding your product teams back and stifle innovation. Unless of course you want to waste company money to build out your own half-assed provisioning tools that are lousy knock-offs of AWS's tools. But then, you might as well just use AWS...
So they're paying 26 cents per ride on all compute resources across their entire company?
That doesn't really sound that bad, considering that rides can easily cost dozens of dollars. Just about any other non-tech business would kill for such low overhead.
Other non-tech businesses, hell EVERY business that I've ever worked in that used AWS did better per transaction - healthcare, digital advertising, virtual office tooling, gaming. If you can't do better than a credit card processing fee per paid customer interaction across the company on AWS, you might as well be selling retail goods...and depending on age, your company might be soon.
Even if it is terrible, is the business such than a 26 cent overhead on rides is going to make or break it?
Companies like Lyft are doing a lot more than updating a few fields for each ride. They would be processing massive amounts of location data and they are building out models to eventually use for self driving cars.
Thank you, my point exactly. Their infrastructure costs are terrible. Especially considering how easy their data is to shard etc (buyer and seller belong are in the same geo physically).
I don't see the analogy here. This is Lyft's core business. Of course they'll go all in. On the other hand chat is not Uber's core business. They didn't have to reinvent the wheel for an internal tool.
Running your own data center is at one extreme. Most companies lease space in a datacenter, and all of the overhead of running the data center is on a different company. You'd have an infrastructure team racking and stacking, and supporting the deployments.
Uber didn't make their own chat app. They just use Mattermost. It was a comical sham internally perpetuated by the team that rolled it out that it was "built in-house".
I heard about that. That the team responsible tried to pass it off as their own. However, according to the CEO of mattermost, Uber has made extensive alterations.
Having used Mattermost a lot for the last few years, you'd really _want_ to make extensive modifications to at least the mobile clients if you want things to work properly.
Contrarian view: not your company or resources. Management was enabling it until now.
Since when did wanting to be a software developer mean there’s “one true way” to do software dev?
Why are developers supposed to be budget babysitters for a huge company with tons of people watching budgets?
I don’t owe my employer being an expert in all contexts to the benefit of their business. I am not their servant. I write code to serve contexts they want served.
Which is even more scary. Why isn't uber laying all these people off and paying cash money for a real chat application? What competitive advantage does uber have maintaining a chat application?
You can take your hands off completely, even go and do something else, read a book, write an email, book some flights, and the chat will drive itself ... somewhere.
I might actually hire an Uber for the express purpose of having someone to talk to. In Germany, taxi drivers were often former "German studies" or Philosophy students who did not find a job, so it was kind of guaranteed that you'd have a competent, honest communication partner (albeit left leaning).
I think that's brilliant. I'm curious as to why it is not regarded as proper job. I don't think it's unique to Germany though. I think it is as honorable an occupation as any. And for the philosophical types it might actually be quite a good occupation as it may not be as taxing on the mind (apart from the time they spent thinking on their favorite subjects). That frees them up to study, research and write in their spare time. Secondly I'm curious as to why they tend to be left leaning...
On what grounds would they sue? Not only is it completely legal to copy a competitor's design (in most cases), Uber isn't selling this to other companies.
I don’t understand why the above user is getting downvoted to oblivion by people who don’t understand legalities. Trade dress[1] is a form of intellectual property. This is what prevents a company from copying a competitor down to the pixel. Apple and Samsung fought an infamous and long legal battle over this. [2]
Decision to build a chat app might seem wrong now in hindsight but this could have been a strategic move (as hinted in original comment).
Look at their competitors in Asia (all-in-one services like WeChat, GoJek etc. where search, chat, ride hailing, banking etc. are all built in one app) and it would make sense for them to have an engineering team building a chat app.
Open Source chat tools are sadly almost universally disappointing. I believe I tried just about every one of them before giving up and just using Slack. I detailed the reasons here:
If you were willing to use Slack after all, then I guess you were willing to consider non-FOSS alternatives? In which case, one service you don't seem to have considered: Discord.
Yes, really, for business. Look past the theming.
Discord has a much more solid tech base (and engineering team) behind it than Slack, IMHO. A better API, too; and—unlike Slack—real support for third-party clients!
I built my own niche team-collaboration app back in 2012, and I tried out a lot of things, but ended up building my whole own stack. That was back then. If I was doing it again today? I'd just make it an alternative Discord frontend.
(There are also offerings specifically designed for the "build your own custom frontend for our chat backend" use-case, like https://pusher.com/chatkit, but IMHO Discord even has these beat.)
Right, let's just do all our business on an app that doesn't have SSO and instead anyone with the link who can sneak in has access. I'm sure that's not sketchy at all and your IT department will be thrilled.
> and instead anyone with the link who can sneak in has access
You don't have to make those links (and you can turn off, per server, the ability to create those links.) You can invite specific users. The user already has to have a Discord account, though.
And that's the thing; Discord has a different accounts model. Which is part of what I was referring to when I said they had a more solid tech base: when you're signed into a dozen Slack workspaces, the Slack client has to keep a dozen websockets open, because the open connection is for a given Slack account's view of the world, and Slack accounts are a sub-resource of Slack teams. This isn't a scalable model, and when the Slack app is using 1.2GB of memory and two full CPU cores, this is much of the reason why. When you're signed into a Discord account, on the other hand, you just have one connection to the server—and one state-sync session that includes all your open channels in all those servers—because your profile on a given Discord server is a sub-resource of your global Discord account.
It's the difference between how an email client connects to N accounts through IMAP, and how the Gmail mobile app is connected to N GSuite accounts.
And, as such, it wouldn't really make sense to have Discord SSO at the account level, because a Discord account is associated with the individual, not with a particular employee record of a particular Enterprise. It's not like an email address; it's more like a Keybase identity or a Facebook profile. (You could certainly have particular profiles under the Discord account that did SSO to a particular server, but this wouldn't be traditional SSO-as-we-know-it; it'd be more of a "connector" flow, like when an app wants to use your Github profile.)
Github is a good comparison, actually. Most corporations just use Github, not Github EE. You don't Enterprise-SSO to Github.com. Github.com is an SSO provider, in fact, that other sites (e.g. Asana) can take auth from!
I don’t think this is an advantage? Work account can be accessed by your IT department, locked out when you leave, investigated for any reason. I certainly don’t want to have any links to my personal stuff at all!
As for github.com, our official IT recommendation that people don’t use their personal accounts, but create one just for work. This way there is no worries about personal data there.
(This is at a subsidiary of a large international company. I can believe small startups use a simpler methods)
> I certainly don’t want to have any links to my personal stuff at all!
Keep in mind, putting SSO into Discord’s account system (if that ever happened) wouldn’t be like putting Enterprise MDM on your personal phone. It would be more like having Chrome Sync signed into both your personal Gmail account and your GSuite account, as separate Chrome “People” (or whatever those are called.)
With Chrome Sync, the profiles are still isolated from one another; but updates to them ride in the same sync carrier connection, because that connection is going to Google either way. In this sense, the Chrome installation itself, and its “installation-specific sync client ID”, is like a Discord account. It’s not a personal account, or an enterprise account; it’s a nothing in-and-of-itself, that has those types of objects under it.
I always thought of Electron as a way to kick out a minimum viable product quickly before writing native versions. But nope, I guess give a $16 billion company 4 years and 1600 employees and that's still not feasible.
Electron gets a lot of hate on HN. I get it. But IMHO the existence of VSC (Visual Studio Code) -- as an extraordinarily useful, powerful, compelling cross-platform application -- serves
as the only counterexample needed to puncture the "it sucks bc it's Electron" trope.
It can absolutely still be useful, and it would make sense for an early stage startup or someone's side project to use it so they're not duplicating work porting it to .NET, Cocoa and Qt or whatever. And sure, having an identical look and feel everywhere is nice. But with all the resources that Slack and Microsoft have, they need to publish a lengthy guide for the users to deal with their performance problems [1]? They take 22 seconds to load a 6 MB XML file [2]? Ehhh... it's not asking that much of a multi-billion dollar company. You deserve better!
"Visual Studio Code jumps to the end of the file quickly, but then takes many seconds for the highlighting to complete."
I'm quite fine with that, frankly. Highlighting correctly requires actually parsing the file. I use vim and the colors get wonky way too many times, because it tries to "keep it fast".
It’s not the dozen websockets in a literal sense that are the problem; they’re more an especially-visible consequence of their design choices that is easily noticeable during a design audit—a “canary” that shows the flaws of their model.
Slack has decided that each team workspace must be firewalled off from the others: such that it needs its own websocket, its own client-side sync session, its own open channels, etc. This is because Slack was first-and-foremost a web-app, and in the Slack web-app, you’d just have one browser tab per Slack team. Slack built up its infra assuming this “one tab per workspace” model, and it crept into their backend API design, and now they’re kind of stuck with it. So now, even in the native mobile app (let alone the desktop Electron app), when you have 12 Slack teams open, you have basically 12 copies of the app’s view-controllers open and idling in the background, 12 background sync controllers, etc. In the case of the Electron client, that’s also 12 renderer processes, just as if you had 12 literal browser tabs open!
You might not notice this at first, because Slack won’t initialize all those resource for a workspace’s “tab”-equivalent until you actually focus the given workspace at least once. But if you just skim through all those workspaces once in the morning, and leave Slack open, it’ll be hogging those resources all day.
(And, on mobile, that’s especially a concern, because despite what you say, web-sockets themselves have heartbeats, and 12x the heartbeats is 12x the reasons for your phone’s modem to wake up. If you’re ever wondering why the part of your phone around the antenna is getting hot even when you’re not actively using data—it’s probably that you have several active Slack workspaces in a live Slack app-container.)
>because despite what you say, web-sockets themselves have heartbeats, and 12x the heartbeats is 12x the reasons for your phone’s modem to wake up.
Don’t put words in my mouth. A heartbeat is not high resource usage.
Your wall of text doesn’t negate the fact that multiple websockets can be maintained with trivial resource consumption. It absolutely cannot be generalized to assume that multiple websockets means copies of everything. I’ve seen multiple clients supporting multiple websocket connections to distinct servers while re-using all of the same UI components.
Everyone in the Open Source community with the skills to write a good chat app is perfectly happy running IRC in a terminal. Good Open Source only happens when someone needs to scratch their own itch.
At least a year and a half ago, Android notifications weren't at all reliable, even when on wi-fi. You'd have to start the app most of the time to get them. I can't remember if it was Rocket.Chat or Mattermost that also was taking 15% of the CPU while idling on macOS, but I think it was Mattermost.
I mean, it probably wasn't in the right programming language and was missing one little feature the org thought it needed and hell.... how hard is a chat application, right?
At big companies, this is often the preferable alternative. Making and releasing quick bug fixes on internal projects is way faster than open source and public projects. Ownership and control is critical.
I recently worked with a ex-uber engineer, hired by a ex-uber engineer manager. We were piloting use of launchdarkly, and he suggested we just build it ourselves as he has already done it few times and would take him only few months to build.
I hate, hate, hate when engineers with a bad understanding of business and too much time on their hands
The equal and opposite problem is managers who don't understand the sunk cost fallacy and refuse to throw out home grown solutions. Sometimes there might have been a good idea to homebrew a thing years ago because nothing good existed. Now several better solutions exist but the company refuses to adopt them because doing so would mean "throwing away" years of work, and the managers who signed off on that work are afraid they'll look bad.
Back in 1994 I worked at British telecom on one of the first high profile web projects for our intranet.
Apparently there was a serious suggestion that this new www was shoddy and we needed to write our own version of http - this got stamped on by some senior people at Martlesham (UK version of bell labs)
> hey, slack is way to expensive, we don't want to get 'locked in', and 'mumble mumble privacy cloud evil stallman'
gets followed up immediately (almost inevitably, in my experience) with
> so lets write our own chat application.... how hard can it be?"
...rather than, say, "hey, I googled and there are a few FOSS alternatives for 'group chat with history': Zulip, for one; Mattermost, for another. Let's see if either of those fit our needs. If they don't quite, though, let's also see if either one of them has a solid, customizable codebase to fix up!"
They did. Which makes them not an example of the GP's comment. Most companies do, in fact, end up literally attempting to "write our own chat application" from the ground up. (After all, that's where Slack itself came from—NIHing an MMO-game's chat middleware!)
Is there any "chat app" that is really better than github/gitlab and a good IRC or XMPP server? I am constantly disappointed by slack. I wish google waves was still around...
I think this could be one of the reasons for Uber pulling out Twilio. Someone must have said 'hey we will build our own telephony suite .. '. I wonder how that has panned out.
> God I love the Not Invented Here disease. Somebody, somewhere, thought "hey, slack is way to expensive, we don't want to get 'locked in', and 'mumble mumble privacy cloud evil stallman' so lets write our own chat application.... how hard can it be?"
And even then they could have just used Matrix, which ticks all of those boxes.
How do you explain Amazon, then? They invented AWS to sell books on the Internet.
The real issue here is a lack of vision at the top. The current CEO needs to step down for the health of the company. He has a clear lack of vision for the company, as evidenced by his statement of "do your divisions look like what they should if we had to start over?" Who says that? Something so vague that is basically grasping at straws and shows a complete lack of strategy. Would Jeff Bezos say something like that? I highly doubt it, because he has complete control over his company and a vision that has worked at micro and macro levels.
You can do things that aren't directly related to your core business and these things should generate value both internally and externally. If you can't do this, eventually, your company will stop growing.
What does AWS have to do with an internal chat application? Is Uber going to roll out another Slack clone because they thought of something marginally better?
This where understanding business matters. AWS makes sense as a business and it benefits mostly from economies of scale which is something unique that a massive company like Amazon can provide the service which few other companies could.
NIH stuff is also rarely externalized outside of the business. Even as open source. Which as the OP pointed out needs proper investment of human capital. Not some side project of a bored engineer or two.
Most innovation happens outside of mega companies by small teams for a good reason. Even the Skunkworks type approach is only useful for certain types of work like Googles X projects. Some B2B SaaS programs roll out of parent organiations but typically they are started by teams who quit the bigger company to solve the problem they had.
You're correct that Amazon does NIH correctly and most companies do not. Amazon's pipelines and web (especially frontend) tech at scale is leagues ahead of the 'market'. However, very few people are able to appreciate this, so it's best to not even mention it on a forum like HN.
> How do you explain Amazon, then? They invented AWS to sell books on the Internet.
The first AWS service was launched over 15 years after Amazon.com started selling books on the Internet. It wasn’t even a separate brand until after Amazon S3, SQS and EC2 were launched.
> The first AWS service was launched over 15 years after Amazon.com started selling books on the Internet.
Close. It was roughly 11 years. I've been using Amazon AWS since early 2007; I believe it launched to the public in the form we know today in early 2006. They started selling books online to the public in mid 1995.
If you go back to the very first AWS services - 2002 - it's closer to being only seven years.
Amazon wasn't even using AWS at the beginning. AWS was a new product category for them. Albeit, they were able to leverage their institutional knowledge of managing data centers and probably the extra capacity of some of their servers.
In Amazon’s defense, there wasn’t anything as useful to their needs as AWS before AWS.
If a different company had dominated the on-demand computing space before Amazon’s peak load issues became too big a problem, they very may as well have gone with that and not made AWS.
Almost nobody needs to write their own chat app. Slack is fine.
That line about do they look as they should is just first line of the marketing spin they put on their layoffs. Obviously there was a clear order to cut a lot of staff to reduce payroll costs. And people here are saying there were way more staff than necessary.
Yes and no. I would love to use Slack over uChat, don't get me wrong, but uChat is a skin/integration of an enterprise chat app not a greenfield build.
That's interesting, I interviewed with Uber for an engineering management role in 2016, and was blown away when my potential boss said he had a "hiring target" for next year of close to 100 people. This was a relatively small product offshoot of Uber that is now closed. I thought that was absolutely nuts, not just the magnitude of the number but that getting bodies in seats was a metric that he/I would be measured against, but thought maybe that I just didn't understand how hypergrowth startups work and it would be a good way to gain a new perspective!
Full Disclosure: I did not get an offer, even though I walked out of that interview feeling I had never nailed an interview as much as I had that day.
Not to doubt your own experiences, but if that was honestly true then Uber should also be scaling back hiring and not be opening new major offices with large hiring sprees.
There was some earlier discussion here on why trust between employees and employers is so low now, and this is a great example. Employees being laid off while new positions open up for that exact same role so that they can hire new developers at a lower cost or avoid having to promote other employees.
This is golden. Grow responsibily. Don't overhire. Consider overhiring neglegent and treat it as such. Dissmiss managers responsible for neglegence, before or with overhires. This will also alleviate the costs of overhiring.
Over hiring is a typical mistake after raising a new round of funding. Good to hear that you agree with the layoffs. Like the old saying goes; you can't put 9 women in a room and make a baby in a month.
> Learn to plan better and prioritize aggressively instead of just hiring and getting everything done.
I often wonder how accurate the roadmap prioritization can be. I do agree it’s pretty silly to build a lot of infrastructure that will never effect your clients.
If you have for instance a billing process that needs to be automated, custom infrastructure is needed. Manual approvals of all transactions is a lot even for banks. Operations can always benefit from something that cuts their overhead time down a significant chunk. Operations approval on transactions seems like an operations problem but clients having to wait for approval means now the problem is shifted.
Hey you're still at an order of magnitude fewer layoffs than Sprint ION after they blew off a $2B loss in the early 00s. Maybe get your leadership to look at that case study.
>Obviously everything I say is personal experience and opinion. I think the layoffs were long overdue and should've happened sooner.
I assume you're not on the side that got laid off. I wonder what their opinion is...
>I think the lesson here is to grow responsibily, and it's real people's lives that are being affected. Don't hire people to alleviate your current engineer's burnout and stress.
Because those are trivial matters, and they should just suffer through them?
Seems like infrastructure/devops always gets short-staffed, presumably due to being considered a cost center. Interesting to hear someone observe this even as they're saying a company "over hired" and "engineers ran out of things to do".
Any open source project without a healthy ecosystem is always at jeopardy. Use something that doesn't require you to question NDA information from some company.
Chronosphere (https://chronosphere.io/) was recently started by ex-Uber engineers to build a commercial ecosystem around M3. M3 is Uber's metrics platform and isn't going anywhere. M3DB (the TSDB built to support M3) is becoming fairly integral to Uber in its own right. I'd say the trajectory is positive.
Probably some reality shaking out. Uber's engineering team puts out some impressive stuff, often as OSS. Their engineering blogs are regularly on HN. I've been genuinely surprised that they churn out some of these things and release them for free given their relatively extreme financial situation.
In contrast to companies like Google, Apple, Microsoft, Amazon etc. that have mountains of their own money to burn (rather than investors') on research and OSS side-projects, it always seemed to me that Uber was trying to play the same game, but far too early. Paying lavish SF engineer salaries to generate cool, but not revenue generating, software is probably excellent for morale, culture and recruiting, but a dubious use of resources when you are losing money seemingly faster than it would be logistically possible to literally burn it.
Saying they're ~ "culling the low performers" can be entirely true, but it is also a Silicon Valley, meritocracy-culture-friendly way of saying "we're losing far too much money to pay bloated growth-stage poaching-game salaries to engineers, so if you're not working on something that generates revenue, glhf"
> that have mountains of their own money to burn (rather than investors')
I totally agree with everything you're saying. But I'm going to quibble with your phrasing. Apple's cash reserves belong to the shareholders just as much as Uber's funding rounds.
Too many CEOs operate under the mistaken belief that retained earnings is "play money" in the way that paid-in-capital is not. For investors, retained earnings are subject to the same opportunity cost of capital as funds raised by equity or debt.
Its management's responsibility to deliver returns exceeding the firm's weighted-average cost of capital. If they can't do that, then they should return capital to the shareholders, who can then use it an alternative higher-returning venture.
Good point. I didn't have that perspective in mind so the wording was off.
My sentiment was that if a company is losing money consistently and egregiously, they are on borrowed time and a borrowed dime in very real terms as the trajectory is towards 0 - but the context is largely psychological. To your point, waste is waste. I agree wasting cash generated from profits is equivalent to wasting it from earnings.
I'd insist there is some practically relevant difference in there though.
Wasting money during a trajectory to bankruptcy creates a narrative of negligence that accelerates failure, while wasting it during a consistently profitable trajectory seems like sub-optimal management. The kind of thing that is theoretically identical, but in the real world of behavioral economics, the former seems more certain due to how easily the trajectory to failure can be estimated. The latter creates a weak narrative because of hidden information - nobody will ever know what "could have been" and so can never quantify how sub-optimal the management was.
E.g. nobody is dragging GE executives out of retirement/the grave to answer for long-term effects of sub-optimal management, and further nobody could prove at the time it was sub-optimal, only hypothesize. On the other hand, everything Elon Musk does at Tesla is torn apart and front page news, because they have a trajectory towards failure a high school student could easily calculate.
So "management's responsibility" to optimally allocate capital is sound in theory, but in the real world of imperfect and outright unknowable information, nobody ever really knows what optimal is. Sub-optimal comes to be expected as normal, but accelerating a trend towards failure is a powerful defining narrative. Somehow this matters.
Why would someone whose been tasked with a job that is involved with gathering as much money as possible, be willing and able to just turn that part of their personality off and start giving money to someone else? Why would they do this just because its investor's money rather than customer's money?
I get that this is the normal ideological description of firms post-70s neoliberal whatever, but if that’s true, like why not just say firms suck, we need communism? Like your description makes Pikkety look like an optimist. “The purpose of a firm is to help rich people get money faster than other rich people” logically implies that eventually a small group of rich people will have all the wealth. That’s feudalism. If that’s the goal, let’s start a revolution instead.
I agree, but the theory "firms exist to maximize shareholder value" ensures that they will be.
Put it this way: gravity turns space dust into supernovas. Dust is just ever so slightly attracted to other dust, so it accumulates and accumulates, and eventually it becomes so massive that it forms a star.
The theory that firms should beat the market makes money gravitational. A shareholder who beats the market will get more money than other shareholders. Now they have more money that they can use to invest in other market beating schemes, etc. If whether a firm beats the market is random, then some investors will win and some will lose but it all balances out. But if beating the market is not random (and how could it be totally random?) then those with the most money can invest in the best firms faster and more easily than smaller investors and crowd them out. Remember that companies only have a finite number of shares, so not everyone can invest in a winner. If there's even a slight bias towards having more money making it easier to beat the market, then eventually you will get a supernova.
We all understand this on some level. Why is insider trading illegal? Because it makes it trivial to beat the market!
Put it this way, if the standard theory of why capitalism beat Soviet communism is that competition created better products etc. none of that requires that the goal of firms is to create better than market average returns to shareholders rather than the goal of firms being a) earn sufficient profit to continue to exist b) benefit consumers c) benefit employees d) benefit shareholders. Yes shareholder would prefer to invest in companies that prioritize them over all else, but why should we the public not say “that’s not an acceptable charter. We don’t want feudalism to happen again, so we are not allowing firms to prioritize shareholders over consumers.”
If the only defense of capitalism is competition, why not market socialism? As in, markets, competition, and entrepreneurship still exist, but all firms must be worker-owned.
Because then you would be forcing everyone to be an equity partner, even if they would rather take a higher salary than share in the risk. Doesn't sound like freedom to me.
Quibble: I don't really see worker-owned firms as a form of socialism, which I understand as the government ownership of the means of production. Worker-owned firms I associate more with distributism.
Worker-owned firms are a great idea, but if that's the only ownership model then you lose some ability to diversify your investments. Everyone's 401k goes poof.
Thinking through this, what are the alternatives? Simple cash reserves are out (because most societies can't seem to shake the tendency towards inflation). Bank savings accounts are a good idea, although impractical in our current society because interest rates are so low.
Alternatively, management could be inclined to not give piles of wealth to people who had zero hand in its creation (shareholders, modulo some employees who also own shares [rounding error]) and use it to pay engineers to do interesting things.
You need 4 things to run a company, in small companies some roles may overlap. In no particular order Workers, customers, management and shareholders/capital. When one gets too much power the company goes rotten. Usually but not always, it’s management.
Shareholders pick the board, board picks CEO. If CEO wants to spend money that his choice until the board gets rid of him.
It's not some sacred pile of cash that 'belongs to investors/shareholders'
It's especially a dick move when everybody already knows they're hurting for cash, and the official position could be "we just can't afford all these people" without the company losing any face. They aren't fooling anybody by pretending it's not about the cost.
If you could chose low performers, lay them off, and be more focused and higher productivity with the remaining people...
_Why haven't you already done that?_
Nobody likes low-performers, even when you're flush with cash. Fixing their mistakes is demoralizing for your high-performers. The word gets around that you have low standards, and it's hard to recruit.
The only way to get your money's worth from them is to put them in death marches and grind them down until they burn out and quit.
I am always extremely suspicious of claims that a company is going to lay off its poor performers and magically be better. If they're telling the truth, they are actually saying that their existing managers are incompetent.
There's a reason that all tech companies try to brag that they only hire the top performers.
Fine, but laying off people who don’t work out is an ongoing process in all companies. If people haven’t already been let go as a part of the company’s existing management review process, what changed suddenly that the company can suddenly lay off a bunch of people in one go and “improve?”
Another way to think about it is that everyone has some productivity, some contribution to the company’s net progress. If someone’s contribution is negative, they should already have been let go.
If their contribution is less than others, maybe “bottom 10%,” but it is still positive, you may be letting go a relatively poor performer in a round of layoffs, but you’re still shedding a person with a positive contribution.
You are going to be worse off, no matter how you sugar-coat it.
> Nobody likes low-performers, even when you're flush with cash. Fixing their mistakes is demoralizing for your high-performers.
If you define performance as change over time then this would seem to have nothing to do with mistakes. From what I've read about the space shuttle programmers, they would have been classified as low performance (low change over time) but who also made with very few mistakes (as I understand their process). At the other end you could have high performing programmers (lots of change) with high defects that they're always fixing (which could in turn qualify as still more change).
Well, the colloquial understanding of a “layoff” is that it is not based on underperformers, but based on changing business conditions.
For example, closing a plant, or getting out of a line of business. If Uber decides not to have anything more to do with self-driving vehicles, they might lay off everyone in its division.
That would have nothing to do with poor performance on the part of individuals.
On the other hand, there is “These people are underperformers,” which is part of Uber’s allegation as they throw their former employees under the bus rather than take responsibility for their management choices.
I contend that if people are underperformers, a constant trickle of letting such people go is not bad for morale. It’s perfectly normal.
“Did you hear they let Dave go?” “Yeah. What took them so long?” That’s the usual talk.
Whereas, “Did you hear that they shut down ML?” “Yeah, and it was half the database tuning group last month, who’ll be next?” “I dunno, but I’m not hanging around to find out...” is the thing you are describing.
Long story short, I agree that a trickle of layoffs is not good, but I suggest that this is true when the people being let go are not thought of as holding the company back.
I disagree that it doesn’t matter who it is. If they are underperforming in the sense of being bottom 10% but still carrying their costs, I agree with you about trickle, but then we can’t claim that letting them go makes the company stronger.
But if they are underperforming to the extent that letting them go makes the engineering group more effective, then management should have identified them earlier, done everything in its power to make them perform, and let them go if they didn’t improve.
Ignoring net negative employees, or being blind to whether they are net negative, or keeping them around even though they are known to be net negative is bad for the company’s bottom line and bad for its morale.
Hello Reginald, I am a fan and a fellow Torontonian!
I agree with your points, but optics might depend on a company. In a startup or smaller company being aware that underperforming employees are let go might actually improve morale. For bigger companies it is a typical situation that you notice or get to know that people from other teams are gone, but you may not be aware of their performance.
True, but then again you probably don't notice so much. Every month there is a new face here and a new face there, and one old face has... Quit? Retired? Been fired? Who knows...
I like reading your writing so I would appreciate your input/feedback either here or you can email me at gmail, whichever is more convenient.
> Nobody likes low-performers, even when you're flush with cash. Fixing their mistakes is demoralizing for your high-performers. The word gets around that you have low standards, and it's hard to recruit.
Fixing mistakes is part of development. I am yet to be part of a team that never made a mistake. Mistakes are how we learn and get better.
If the same mistakes repeat, THEN you have a problem but if a single individual is to blame everytime, then it's not the individual's problem - you have a bad team. Your team has failed at teamwork - the primary focus of any team.
If you have a team of dozen engineers making a car, the car does not drive until all the parts are not only in place but they all work well together.
The way to make all parts work well together is to have the designers of the parts communicate and work together, well.
If the engine guy is not talking to the intake and exhaust guys, don't be surprised if there are leaks at best or the engine blows up at worst.
I AM assuming each team member went through an interview process. If the going was tough where you could not interview and had to let just any person in, hopefully this person helped you through the tough times.
What value does the interview process provide if you can't figure out if your candidate is a high-performer or not?
Why did your interview process select a low-performer?
Also, performance is the output of a team - a single person should not be expected to provide high-performance day in and day out.
That's impractical to expect out of a human being. A machine and a person have vastly different characteristics.
If my team is working well, we will have a high performance team. There is no other way to have high performance sustained over a long term.
Each team member needs to actually looking forward to working with each other.
The other extreme is programmers work in these silos and come up with solutions that barely work well with each other and then there's blame game being played.
Why do that nonsense? Save money? No - of course not!
Just work as a team!
> The only way to get your money's worth from them is to put them in death marches and grind them down until they burn out and quit.
I don't follow.
Death marches?
First of all WHY do this at all?
What's wrong with the alternative "Hey, it looks like it's not working out. We will be letting you go and support you in looking for a job elsewhere over the next X days"
At one point in time in the past, you and your team interviewed this person and found them useful - what changed that they are no longer useful?
Was an error in hiring made?
Own up, take responsibility and move on. Make the interview process better.
Did the person expect to get a larger bump come bonus/review time that did not happen and now they are demoralized and upset?
Own up, take responsibility and move on. Clarify better what bumps and bonus would be like and how much effort that would entail next time.
> I am always extremely suspicious of claims that a company is going to lay off its poor performers and magically be better. If they're telling the truth, they are actually saying that their existing managers are incompetent.
I also don't follow this and want to hear more about this perspective.
What happens to the people working in mining, transporting and delivering ice from Iceland to California when refrigerators get invented?
Are those people inherently low performers or has the industry they work for shifted beneath them?
We (developers) work in an area of high specialization and the market values us for it (to the tune of six figures).
I have worked at both product and service companies before where entire departments were laid off because a contract did not get renewed or the market changed.
Most employees AND manager involved there were and continue to be competent. We even hire and refer each other wherever we might happen to be to this date even though we met decades ago.
People who aren't critical to the core product, or whose projects aren't big revenue generators. They might be high performers while being technically unprofitable.
Not necessarily a bad idea, but disrupting those business critical teams by just swapping out people could actually slow down execution and hurt revenue.
I'm implying that rather than laying off top performers you find them a different role in your organization.
Granted if the skill set is incredibly niche--such as hand optimizing HC12 assembly and you've moved to ARM then perhaps not.
It's hard to imagine a scenario where an entire project teams skillset is so niche that they couldn't find a home for top developers in other parts of the org.
You can't just swap out members of a team, or add more members to a team, and expect the result to be faster execution (in short run) even if the new team members are high performers.
In the first case, you're losing team members with tribal knowledge of the system and its requirements. In the second case, you're exponentially increasing the pathways of communication. In either case, you still have the ramp-up time for new team members.
Any number of reasons. They might be high performers in skill sets not needed in those business critical projects. You might be leery of the time needed to get up to speed on something completely different.
You can just say something like "we're restructuring to focus on our core competencies". If you fire a bunch of non-critical staff, you just told investors "our revenue to cost ratio is about to get a lot better" and so if anything investors who have been watching the decline are going to recognize you are doing something about the problem.
Indeed, HP (or HPE and HP Inc.) has done many layoffs in the past few decades. I just narrowly dodged one a number of years ago. Pretty much always the goal is to simply reduce costs without reducing revenue (as much). Investors don't care how much staff you have, they just care if you are making money.
I completely disagree. Which would you rather have:
(a) Business is booming, but leadership holds off on hiring because they believe the boom won't last forever.
(b) Business is booming, so leadership hires to support the boom. The boom eventually subsides, so leadership decides to lay off as the business is no longer there.
Fortunately, even as an employee, I'd much rather have (b) (assuming the timeframe was relatively decent, i.e. I didn't get hired and laid off in 3 months).
I've said this before, but in growing industries, I do not believe lay offs are something to fear. I mean, given the desire for experienced engineers and product people, I have no doubt these Uber folks will get snatched up extremely quickly. (and to emphasize, I certainly do NOT believe this is the case with shrinking industries)
You can't be a unicorn and not be able to afford the people. This is not a story for people in the tech who know about the industry and the six figure salaries engineers at unicorns make.
This is a story for retail that will be buying stock. "We cannot afford X" can be an stock buster.
So?
They could lie (which is far worse) or say nothing and let people speculate.
A job candidate with solid skills will be able to show their value to employers, and if an employer puts more weight on this quote over a candidate's qualifications then it was a bullet dodged.
Good point - didn't think about that at all. Did you mean think before I speak, or Uber?
In any case, yeah, in that respect it is a massively shitty and unnecessary thing to do to employees. They could have easily left it as "re-structuring" without a risk of tainting the reputation of former employees.
Certainly that should be part of it, but the goal is to reduce costs without reducing revenue. Low performers are certainly a cost, but there's only an indirect relationship between job performance rating and revenue.
They did some impressive stuff, but internally the eng org was bloated as hell, thanks to Thuan's leadership. Ironicaly, Thuan recently asked his directors to tell him which departments are bloated so he could decide who to cut. So much for the "amazing leadership".
>> In contrast to companies like Google, Apple, Microsoft, Amazon etc. that have mountains of their own money to burn (rather than investors') on research and OSS side-projects
You are assuming that these companies are letting engineers to do side-projects that are unrelated to their day to day work?
As far as I know the OSS projects these companies put out are in line what they use internally for day to day work and it is absolutely core to their business.
A side-project isn't by definition irrelevant, and of course by sheer probability the engineers at those companies are, on average, going to create things that are within their area of expertise which is usually related to what the company they work at does :).
The motivations for making software OSS are varied and often strategic. For example software is often open sourced to:
* deliberately commoditize it - to eliminate competition and differentiation in that area / stack layer
* leverage additional (free) testing and development.
* Drive ecosystem / platform adoption
* Literally free up customer budgets to be spent with them, rather than on licensing 3rd party software
* Intangible benefits like community image, employee satisfaction, etc.
* Some combination of above when the software is useful internally, but simply not in a market that the company wants to compete in, or a market worth their time
In any case, the point was that they are "side-projects" from a business perspective in that they cost money but don't generate revenue - the benefits are hard to quantify. Successful, stable companies have much more breathing room for strategic and the "hard to quantify" ROIs than does a company on a trajectory towards bankruptcy. It is kind of like an individual out-of-work engineer with a month's expenses left in the bank choosing to contribute to OSS instead of seeking out paid work. It is not that contributing to OSS is wrong, it is that the priorities in that situation are backwards.
RE: "Nobody is forcing Uber to employ people in California." That is entirely true, but I'm not sure what your point is. My comment is a post-mortem on what led to the layoffs. It is a priori that nobody has forced Uber to do anything that it did...
I have also been impressed by everything they are producing and I'm actually really wondering why do they need all of those new OSS projects. They need to scale but to an order of magnitude lower than most other webscales. None of their application is data heavy
I have said this before but they seem to have a strong "must be built here" culture. You typically see this in highly political environments where engineers are trying to create projects as a career highlight and as a justification for promotion.
While not a "tiny amount of data" Uber's problem seems like one of those embarrassingly parallel ones where partitioning by location is trivial, and accuracy of all the data isn't as important as knowing everyone's location right now. I'd guess any relatively popular MMO deals with similar things under much tighter latency constraints.
Data heavy to me means terabytes of data with potentially multiple dimensions, like Google or Facebook.
Not to say that Uber's problem isn't challenging, but I don't expect that the amount of data is necessarily the problem.
Can't speak for OP, but I'd imagine most of the data in the system is metadata - i.e. very tiny. Sure they're moving a lot of packets, but an entire ride's data could probably fit in 100KB. If they have a million drivers active, what data do they actually need on them? Profile, GPS location, type? Few KB. Keeping the log of all rides probably takes up the most, but still, relatively small. In any case they essentially deal with small, highly compressible metadata.
Think of that vs. a company like Instragram where people are uploading probably terabytes of media content every day, and they have to maintain/host all that content to be served on-demand basically forever. This is probably a low-key reason for pushing "stories" - they get a reprieve by only having to store that for 24 hours. In any case, you're looking at orders of magnitude larger data usage in all aspects.
Or YouTube, with 1000s of hours of video uploaded per minute.
FWIW an Instagram pic, 1080x1080 is around 100kb.
Uber has to do a lot more processing on it's data. I'm sure there are real challenges and the OSS projects from Uber I've seen/remembered on HN seem to be the type one builds because existing tools don't solve the problem well enough for their cases.
In the grand scheme of things it just isn't. 14 million rides a day, giving them a generous 1MB of data per ride, is "only" 14TB, 420TB/month. The data relevant to a ride for the clients like GPS location and ETA can fit into a few bytes...
A single video doorbell can use 200GB / month. With only 10,000 users that is 2 Petabytes of data traffic per month. Not to mention recordings that have to be stored and hosted for streaming later on.
Maybe, but the problem is that in a restructure like this the high performers often leave in protest to the culture problems that a restructure creates and austerity measures.
Often though they don't cull low performers, they give each department a budget or a head count they have to hit. A department made up of high performers will have to cull a high performer to hit budget, a department which is overloaded will become more overloaded and people will quit in response.
In a company the size of Uber a restructure is often a pretty blunt instrument.
Airbnb seems to do similar things, but has a better business model to support it. I kind of get it from a recruiting standpoint and they probably did need to build some customized software given the scale they have. My guess is they spent far more money trying to conquer rideshare in multiple countries, self driving, and side businesses. At the same time, they did look like they were also developing some pretty low level software that was probably not necessary.
Can someone explain to me what are the technical challenges at Airbnb? They need to handle less requests than the top airlines or hotel booking websites.
Airbnb is a business innovation with a shiny website frontend. But I really don't get all the hype around Airbnb engineering.
It doesn't really cost anything to open source something though. These are all projects which are developed for a reason: the commercial version might be prohibitively expensive at Uber scale, or not technically capable of operating at Uber scale, or just plain doesn't exist yet. At that point you can engage with the tech community and offer it as OSS (not to mention make your engineers happy), or you can keep it to yourself and eventually lose that opportunity to somebody else.
Depending on context, sure this could be true. Like if you're comparing the cost of releasing some small OSS module of Uber's to Uber's annual revenue, sure, it's going to be a negligible cost. But if you compare against the cost of developing the module in the first place, it can easily be an equal expense. For example I spent several months on a BLE library for Android (https://github.com/iDevicesInc/SweetBlue) and asked my company to open source it. It took several more months to get the library to a point that was suitable for a proper OSS release. So cleaning up code, making sure no sensitive info, swear words and such, documentation, lawyery stuff, icons, PR copy, blog post, basic website, wiki, and much more nitty gritty I'm glossing over.
I mean a company can just throw code over the wall into GitHub and call it OSS, but I associate a basic level of polish with a proper OSS release that does indeed take a good amount of effort. And that's just initial effort! If it becomes at all popular then you have further ongoing overhead.
I'd say a general rule is that open-sourcing something is at least 50% of overall cost of the project.
> So cleaning up code, making sure no sensitive info, swear words and such, documentation, lawyery stuff, icons, PR copy, blog post, basic website, wiki, and much more nitty gritty I'm glossing over.
I'm the manager of one of Uber's OSS projects, and all that the things you listed here ring true. I just know that in our case at least, OSS prep absolutely pales in comparison to the feature/operational work put in by the team.
To be clear, when I added "really" to that first sentence it was meant to communicate that there is some cost, but in the sense that it's negligible to Uber's losses, as you point out. I was responding to OP's "dubious use of resources" comment. But I can see that wasn't clear.
Yeah absolutely! It's a successful project and pretty integral to Uber, I love what I do and have a lot of faith in my manager/director. I don't anticipate any reason for our situation to change.
> If it becomes at all popular then you have further ongoing overhead.
THIS is the one that comes into play. All that stuff you listed before is a slog to go through when you go to open-source, but unless you're parking the thing as a proof-of-concept/end-of-life, you're now signed up for maintaining the repo. That means triaging issues, pull requests, helping out when contributors don't understand why their build is breaking, etc.
And there's the PM aspect of it: you don't just want to develop a bunch of features without talking to your community, so communicating (in a public friendly way) what you're planning to work on, when folks might reasonably expect that, how they might be able to help out, which of their contributed features you might be able to take depending on where you're at in your lifecycle, and RESPONDING TO COMMENTS all takes way more time than just "building [closed-source] product" in a team of 5-20.
And of course, one of the hardest of all: telling people "no, we can't take that change" when they've spent hours and hours doing work for your project for free. In that regard, we're still very much iterating on a transparent design process that allows for consensus BEFORE too much work has been done (though as we all know, building prototypes is often one of the best ways to find out if a design works right or not).
If you're doing it all right, everyone involved in the project should be doing some amount of all of this every single day. There's no compartmentalizing an engineer on an OSS project as "someone who just writes feature code" vs. "someone who does the repo stuff".
So going back to OP's point: no, it doesn't literally "cost anything" (or very much) to do the basic act of open-sourcing, doing it the "right way" at scale where you're truly engaging and working with the bazaar is very expensive.
Full disclosure: I'm a PM at Microsoft working on PowerShell and was heavily involved in it being open-sourced and ported to macOS/Linux.
Tangent: Could you explain why I might want PowerShell on MacOS or Linux, if I use those as my primary OS? (I usually only open my windows VM for checking that my websites work in IE 11).
Linux is actually half of our usage on PS Core[1], so it's a great question. A lot of folks use PowerShell inside of CI/CD pipelines, especially for cross-platform app development of .NET Core applications (having a single build/test/deploy script is often cited as vastly preferable to trying to maintain a split of .ps1/.cmd/.bat and .sh/.py/.rb).
But also, lots of folks prefer an object-oriented pipeline. Many of those folks (our primary use case for 10+ years has been IT management) are used to PowerShell on Windows and starting to learn or be exposed to other environments.
We've also got lots zsh-style optimizations in PSReadline. In some cases, we've got some catching up to do, but there's also lots of unique interactive optimizations hiding around[2].
It's also great for interactively exploring REST APIs and building scripts via that experimentation. Try running
And then look at all the properties you can explore:
$a | Get-Member [or gm]
$a.<tab><tab><tab>
Oh, and of course, one of the big reasons is "so you don't have to open a Windows VM to remote into your Windows Server boxes and manage them from a Macbook".
This is obviously not an exhaustive list, but it'd take a lot more time to write about every benefit and scenario here. In any case, it turns out that our user base is pretty spread out among different scenarios, but between our repo and usage numbers, we've been really happy with how excited that such a diverse group of folks really love PowerShell.
And feel free to reach out to me on Twitter @joeyaiello if you ever want to talk more about your experience (or just hop into our GitHub repo). :)
This was far more detailed than I expected. You seem very passionate for PowerShell. The rest method exploration looks very cool, I knew I might learn something cool by asking. Thanks!
100% agreed, I started doing this for a small project my company has. We don't really use it anymore, but it would be helpful to many hobby projects however we are now sitting here saying 3 weeks work to just give this code away? ick.
That's not true. It costs quite a bit to open source a product if you're a commercial entity.. It needs to be reviewed (by legal, security, engineering, etc) and approved..
You're not just flipping the public/private flag on the repo.
Also, the doc, blog posts, feedback from the community, evangelization at conferences, thinking out the API design so it answers enough cases, not just yours, all take engineering time, that's not free.
We open sourced my team's project a few years ago ( https://nomulus.foo ) and it was a substantial amount of work. There's everything you're saying plus a fair amount of engineering to get the darn thing working externally; we were built/hosted within the Google monorepo which is obviously not externalizable. And you end up spending lots of time writing documentation that you hadn't ever gotten around to when it was just a project being worked on by a handful of engineers all sharing adjacent desks.
Not disagreeing but elaborating: The costs are higher when it's an already existing product of which parts the company doesn't fully own enough rights of for publishing. Even higher when it's not known which parts are fully owned by the company and which parts are of foreign origin. The costs are lower when it's meant to be open sourced from the start and it's been a project constraint since before the first line was written.
Of course. But compare that cost to (say) six full time engineers pumping out code for a couple of years. It's not the dominant cost by any means. Not to mention you're paying those other folks a salary regardless.
If it helps you attract better talent, well - there's a financial incentive there through increased efficiency which I'm sure on its own is more than equal to the review cost.
Why would you give your open source code a tighter security and engineering review than your in-house code? Are you hoping for security through obscurity? And quality through obscurity?
> It doesn't really cost anything to open source something though.
Yes, it costs next to nothing to just open source a project if you mean literally just putting the source on some hosting site.
However, open sourcing something properly, where you respond to issues, document things properly, and provide build/test infrastructure to external developers is much more work. Not only that but you have to be much more careful when creating APIs and be much more vigilant about keeping backwards compatibility.
There was the fixed cost of developing it, and then the potential lost revenue of not selling it, similar to an opportunity cost.
If the presumption is that the software would be useful ("developed for a reason") economics suggests there is some price people would be willing to pay for it, and you forfeit that when you make it OSS. That absolutely costs something.
Sure you may not want to be in the business of commercial software (support, maintenance, ultimately just responsibility) which is a completely sane thing to avoid. However when you are bleeding money at the rate of a small country's GDP per year, avoiding opportunities to generate profit based on intangibles like community engagement can come off as ill-advised. In fact, if your company is declared bloated, it stands to reason that you should have the capacity to take on the additional overhead of selling the software. It is not that contributing to OSS is wrong, or that your points are wrong, just that there is a time and situation for this kind of strategy.
Contrast with Amazon, whose entire development of AWS was for the reasons you point out. Instead of open-sourcing it, to the extent that would be possible, they made it into a product and almost in a single move turned consistent overall loss into a massively profitable company.
So this is not at all to argue against the merits of having healthy OSS contribution at a company, but more to say that a company can't contribute to OSS if they are bankrupt - so avoiding the latter should be prioritized over the former.
Scaling back on the engineering and product teams was a smart move to cut costs. The promotions in engineering have been based on rollout of new features. No one was willing to be a grown up and require the engineering team to fix actual problems with the core product, the app. That is on the VPs. Sure, fixing bugs is not as much fun as building new features but Uber needs to make its core product better. Uber also had the opportunity to use a mapping system like google maps or Tom Tom the way that Lyft has. Instead, they built their own proprietary system at huge expense, refused to scrap it after it became clear it would be advantageous to do so, and have yet to work out the bugs with turn by turn navigation. There are some brilliant people at Uber doing amazing things, there are also a lot of ridiculous side projects with engineering teams devoted to them like the flying car team. It’s unfortunate that Uber laid off so many people. Maybe if upper management had made smarter choices about how they measure and reward success internally prior to this they would not be in the situation they are in.
Related, but Uber is said to be hiring 2,00 for it's new Chicago office next year [1]. A mix of engineering and operations. My understanding this would be under their freight team, which according to this Techcrunch article, was unaffected by this layoff.
I really take all this "will hire xx people in y location" with a grain of salt. This is all marketing speak intended for the tax handout. I don't really believe they will hire that many people if their business tanks
The difference is that this isn't some company with an existing footprint in a city saying "hey we're gonna hire some more people for our office here". In both the case of Chicago and especially Dallas, Uber is making significant real estate commitments to go along with these hiring plans. You don't buy up an entire skyscraper office building (and several plots of land around it) and open an entirely new office unless you're either 1) actually planning on filling it or 2) in such dire straits that you're willing to do really whacky shit to make people think you are planning on filling it.
With Uber, it could be either one, but I certainly don't think it's just run-of-the-mill 'marketing speak'.
I don't believe Uber is buying a building, rather leasing out space, which can always be re-negotiated. There have many examples of companies promising a certain number of jobs and never fulfilling them, because who is looking. For example, Foxcon. Also, Uber once committed to build a HQ in Oakland and signed a huge lease. Soon after, they abandoned that plan and started building a brand new HQ in SF
The current deal that I've read for Uber's Dallas expansion is that they currently are leasing about 1/3rd of a brand new skyscraper that was just built, have plans to lease 90% of a brand new skyscraper that is currently being built, and also outright purchased several plots of land where they are planning on building office building that they will own.
edit: After reading a few different articles it seems like every article says a different story about how much space Uber is committing to, so maybe you're right, it does sound a little wishy-washy.
They also recently announced plans to hire 3,000+ in Dallas [1] at a brand new massive office. I'm sure the hiring and layoffs are from different business units, but it does seem strange that there's been multiple several-hundred-people-layoff stories form Uber recently at the same time they're announcing otherwise massive hiring expansion. I would at least figure that they would prefer to transfer engineers between units rather than to layoff and hire anew.
Maybe some of them were given an option, but they didn't want to move locations; so they just decided it's better to pay them severance while they look for other work? /guess
Interesting if this is a way to get out from under crushing Bay Area tech salaries.
I still see zero reason a company like Uber should be based in San Francisco. We landed a man on the moon with parts built all over the United States, so it's not "that's where the talent is".
> I still see zero reason a company like Uber should be based in San Francisco. We landed a man on the moon with parts built all over the United States, so it's not "that's where the talent is".
It's exceptionally difficult to get investment money if a tech company isn't located in the Bay Area or Seattle.
PA would be the absolute worst place in the world for a low margin business to expand into. I really have no clue how they arrived at such a conclusion. I can only imagine, it had something to do with investors.
What horrendous software quality? Uber consistently puts out some of the cleanest mobile experiences for a mass market app, and their research teams put out great OSS work.
Have you tried to use the Android app? I have programmed Android for five years and I can confidently say that the Uber Android app is a disaster. Both usability and bugs.
On the database side, there's a place in my city that has some permanent bad data in the db so that it won't allow anyone to get picked up or taken there. I go there frequently by Uber and have to set the pin a few blocks away from the corrupted area then explain to the driver where I am or where I am going. It's like there's a ghost car attached to that place because every time I try to get a ride from there, it says it's finding me a ride, followed by an error message that the driver is unavailable. Had a painful back-and-forth with support about this and of course nothing every got done.
While the Android app is of poor quality and no one is rushing to fix it, Uber engineers are busy putting out open source software and plenty of it. Talk about resource mismanagement!
For several months, Uber tells the driver my house is on the other side of the street. Verified that Google Maps, Apple Maps, and OSM all have my house on the correct side.
Maybe they did? If you are an engineer in San Francisco, switching companies is trivial compared to relocating your life across the country to a place where you may not want to live.
Logistics is a pretty mature industry as far as earning a sustainable profit goes. It would make sense they would be unaffected compared to their typical taxi type service.
I don't know the details of this situation and Uber is far from a healthy company, but I don't like that layoffs are always a sign of a company in peril in Silicon Valley.
1) This is a public company with shareholders. If they think they can cut costs without hurting their revenue outlook that's not a bad idea!
2) We all know that interviews for engineers in SV suck ... So why can't you fire someone if you make a mistake?
3) I work at a company (Google) where the prevailing assumption is that if a team is not getting enough done it should ask for more engineers. That almost never helps. It adds communication overhead and doesn't address the problem of why the team wasn't getting to where it thought it would. Just smothers the issues. The most effective teams I've ever worked with were 3-10 people who were motivated and working in their area of expertise.
4) We all know that one bad teammate can undo the work of two good ones.
I could go on. Yes I truly have sympathy for anyone who loses their job suddenly. It sucks for them and those who depend on them. It's probably good for Uber though.
> I work at a company (Google) where the prevailing assumption is that if a team is not getting enough done it should ask for more engineers.
What I'm finding at Google is that whenever a team takes longer than 2 quarters to do pretty much anything, that's considered some kind of "problem" that needs to be "fixed." Sometimes the problem is that the technical challenge really needs more than 2 quarters to be adequately addressed. And yes, the first instinct is to ask for more headcount. But often times the problem is also with the headcount you have, not the headcount you don't have.
What is usually needed is to get rid of the TLM who got into a management position through the IC track because of the collective delusion that someone who has worked their way up to Senior or Staff SWE by writing dank design docs and uber code (often in vast quantities) has also acquired senior engineering management competency.
Once you've hired somebody who has significant education and/or experience with engineering management is managing the team, the next thing for that person to do is figure out how to increase the health and effectiveness of the team they have. You might even need to reorg to get the team size down to 7-10. In the process you need to give the team a couple more quarters to cut their MVP down to the bone and deliver on it.
Then, and only then, should you think about throwing more headcount in the team's general direction. And it needs to be done with the goal of adding a layer of management hierarchy, making sure than no more than 7-10 people are in the daily standups.
Uber was actively poaching from our team when I was at Edmunds.com a few years ago; hope my ex-teammates that jumped ship are doing alright.
Uber is in a precarious position and I can't help but wonder what would be different if Travis Kalanick were still in charge. I know it might be an unpopular opinion, but I think his leadership and vision were really instrumental to Uber's early success.
He was absolutely instrumental to the early success. In some places they were actively breaking the law just to operate there, and Kalanick was able disrupt the system and make Uber important enough to change the laws.
However, that doesn't mean he should still be CEO. Kalanick also created a company culture that became more and more toxic as it grew larger. Lyft was arguably on the ropes and might've failed without the #DeleteUber movement caused by all of the Uber scandals. Without Lyft for competition Uber might actually have the pricing power to be profitable now, but as it stands I'm not sure how viable they are in the long-term.
You've reminded me of an observation I made recently about Star Wars: the behavior of Han Solo (pre-Greedo-shoots-first-bs) and Darth Vader aren't that different. It's the context that matters. If you're small and scrappy, antisocial behavior makes you a charming scoundrel. If you're big, the same behavior makes you evil.
But the difference is that Han came around at the end of A New Hope, joined the Rebellion, and saved Luke’s ass, which lead to the Death Star’s destruction. This proved he wasn’t a complete scoundrel and had good within him.
Uber’s corporate culture was ugly and toxic from the start. And it never got better or “came around” to a good cause. A better analogy would be Anakin moving from small-time massacres of Sand People to blowing up planets as Vader. The scale changed, but it was still evil all along.
I think it’s misleading to defend Travis as some misunderstood scoundrel whose enabling of sexual harassment didn’t “scale”. He’s just a shitty person who initially had less power to be shitty.
Not to mention the stories of early stage Uber engaging in shady tactics like hailing and cancelling Lyft rides as a manual DDOS, or ripping mustaches off parked Lyft cars.
The Death Star's destruction also killed thousands and thousands of soldiers, bureaucrats, and construction workers. A lot of who is good/bad in Star Wars is perspective. The Jedi can also be seen as religious extremists that kidnap children to indoctrinate in their ways, to lead in terrorist missions that help impose their view on an entire galaxy. Darth Vader is an emperor protecting his empire from a growing threat.
By creating a weapon of mass destruction that destroys whole planets? I think the scale of that endeavor and the resulting destruction of Alderaan is justification enough for destroying the Death Star. But destroying Alderaan itself? I don't see any justification for that in the vein of him protecting his empire. They certainly didn't seem to pose a threat big enough for the planet to be destroyed.
When one side escalates to that point, and the other side takes away their weapon of escalation, it's false equivalency to try to equate the two.
Unfortunately many people lose close family members, even parents, in tragic, horrible, unfair circumstances that never see justice all the time. Most of them - I would wager almost absolutely all of them - do not commit mass murder afterwards. I vehemently disagree with your opinion about what I would have done in his place and register my unease with how you raise it as an obvious general norm.
Vader moved fast and broke things sure, but he succeeded in disrupting the Old Republic. That’s why he’s the real hero of Star Wars, and a role model for the tech community in general.
Not sure if you’re joking, but I think “moving fast and breaking things” is a bit of an understatement. I mean Vader enabled a heartless dictator to take over the galaxy and personally saw to it that a whole planet of billions of people blew up. Doubtless in the years after Order 66 Vader was responsible for millions of other deaths. I mean he personally strangled Captain Antilles for god’s sake.
The Old Republic was flawed, but disruption in this manner was clearly a step towards a new, shittier status quo. Disrupting something and making it worse doesn’t make him a hero.
Han shooting first is totally legitimate. Greedo is an organized crime thug who is going to take Han to an incredibly painful and certain death. It's self-defense even if he shot first.
You're completely ignoring the most important data. Han Solo and Darth Vader are not the same person. Maybe one is just more likable than the other?
You can have two different comedians tell identical jokes, word for word, and only one of them will be funny. Jim Jefferies does an entire bit about a journalist who reviews his jokes harshly after transcribing them to text. His conclusion is (paraphrasing) "my entire job is to say offensive things while still being likable."
...because it is different? If you're a small fry, you hurt fewer people, and any claims that it's a survival necessity are at least plausible. It's also quite likely that people you hurt are actually worse than you, as is possible with Greedo.
If you do the same as the director of FBI, _excuse me_, Lord of the Sith, things are quite different.
Edit: but also, Uber and Kalanick were never small fries. So that's where it breaks down.
Unless Travis could have pulled off a miracle with self driving cars, Uber would be in exactly the same place it is today. If anything the company is executing better than it did under his leadership. It just cannot win the battle against basic economics, which everyone saw coming.
I don’t get why Uber isn’t profitable. Their marginal cost is only higher than zero because they choose to lose money.
Their fixed costs are servers and engineering. If they set their prices higher than what drivers are willing to accept they should make money.
I don’t see how “basic economics” is the enemy. Their enemy is setting expectations too high. If they were happy with a profit of $100M a year they would be sustainable forever.
This is a worthwhile writeup of how Uber's operating costs are generally higher than the industry it "disrupted" without actually solving the structural problems that industry had found an equilibrium around: https://americanaffairsjournal.org/2019/05/ubers-path-of-des...
Two relevant excerpts from that article on cost and structural problems:
=====
On Cost:
The cost structure of any urban car service company has four components: vehicle costs (typically 18 percent of total, including acquisition, financing, maintenance, and licensing), corporate costs (15 percent, including dispatching, advertising, overhead functions such as IT and legal, and returns to shareholders), fuel (9 percent), and driver compensation (58 percent, including benefits).5
Uber’s business model shifts the vehicle costs (ownership, maintenance, insurance) that traditional companies used to incur to its “independent contractor” drivers. Passenger fares need to cover total (Uber plus driver) costs. But shifting the burden of vehicle costs and financing onto drivers makes those costs higher, since hundreds of thousands of drivers with limited capital and business experience cannot possibly manage these costs as well as even a typical traditional cab company. Traditional cab companies also have much lower corporate costs, as they avoid Uber’s huge expenditures in areas like political lobbying, global branding, IT development, big corporate headquarters, etc.
Uber should also have higher driver costs than traditional operators, because the huge increase in the demand for drivers should have improved wages, benefits, and working conditions. As will be discussed below, however, Uber initially offered incentives that increased its driver costs, but since 2015 has suppressed take-home pay to minimum wage levels. This exercise of artificial market power cannot be considered an Uber efficiency or productivity advantage.
=====
On Structural Problems:
Far from revolutionizing the future of transportation, Uber has not solved any of the industry’s long-standing structural problems.
Most taxi demand is low-income; higher fares would shrink traffic and reduce utilization. Taxi demand is sociologically bipolar: 55 percent of demand comes from people earning less than $40,000 per year while 35 percent comes from people earning more than $100,000.10 Demand from lower-income people is driven by access to jobs in areas (or at times of day) when transit service is poor or nonexistent. Given the current income distribution of riders, any attempt to balance supply and demand will either drive lower-income passengers out of the market or result in wealthy customers being charged less than they might be willing to pay. Uber does not have the lower cost structure needed to improve service while keeping fares low, and apparently realizes that only a small portion of the market is willing to pay fares that would cover the true cost of its service. Higher prices would also reduce vehicle utilization and destroy any notion that Uber’s business has exceptional growth potential.
Uneven geographic demand creates unavoidable empty backhaul costs. Taxi demand, as with demand for every other form of urban transport, has extreme temporal and geographic peaks. Most cities have a dense core area where taxi demand is highest, and taxis operating within that zone can maintain reasonably high daily utilization. But the true cost of trips to neighborhoods outside that zone can be as much as twice normal trip costs since they will have an empty backhaul. Low-income neighborhoods receive poor taxi service because drivers rationally avoid trips where they won’t find a return fare. Uber does nothing to create new demand that can fill those empty seats, and has no way to vary fares based on backhaul utilization. People expect that the fare to the airport should be roughly the same at 6 a.m. (when the cab will return empty) as at 4 p.m. (when return fares are queued up).
Extremely high cost of peak capacity. Peak taxi demand occurs during the late evening, especially on Friday and Saturday nights. As with rush-hour transit and expressway peaks, the cost of the capacity needed to serve peak demand is four to five times the cost of serving demand on Tuesday morning. Cab companies cannot afford to provide all the expensive capacity demanded, creating conflict as wealthier people headed to restaurants and clubs fight over the limited supply of cabs with late-shift workers at hospitals and warehouses. Uber has done nothing to reduce the high cost of peak service or find paying passengers anxious to travel at off hours. Uber’s core business proposition (“push a button, get a car!”) by definition requires far more capacity and much lower utilization rates than traditional operators.
Overcapacity risk. Taxi businesses in unregulated markets have no natural barriers to entry, and thus face the risk of ruinous overcapacity that reduces utilization and precludes a workable balance of supply and demand. As both Uber and past cases of unlimited market entry have demonstrated, new entrants don’t charge fares high enough to cover full operating costs, ensuring major losses for everyone.
Uber did not suddenly discover ways to dramatically improve productivity and service quality that everyone else in the industry had been too stupid to recognize for the past hundred years.11 In fact, nothing in Uber’s business model solves any of the major problems that have long frustrated users.
The only point that sounds even remotely correct here is "companies can afford cheaper financing to buy cars than individuals" - although Uber could easily take care of that by buying vehicles and leasing them to drivers.
Otherwise, yeah, Uber did fundamentally improve both productivity and service quality vs. traditional cab companies. Mobile apps are an obvious service quality improvement (predictable waiting times, ease of finding cabs in remote locations, ease of payment), and allow Uber to provide the same level of service (i.e. availability / waiting times) as traditional cab companies, but with less drivers (since a user doesn't need to actually see a cab in order to hail it).
All other issues apply equally to cab companies - e.g. empty backhaul costs, cost of peak capacity, bimodal income distribution of users - except that Uber does, or at least could, solve them better with technological means - e.g. Uber Pool and Uber Eats for backhaul costs, automated and/or predictable surcharge for peak capacity issues, Uber Black to target richer users.
Overcapacity risk: in some locations, cabs were practically unlimited (e.g. Slovenia) so this existed before, in other locations limits were either because of monopoly (e.g. NYC) or skills (e.g. London), both of which Uber improves - breaking monopoly lowers prices for users (without decreasing driver wages, simply by destroying the profits of rent-seeking medalion owners), and there's no need to know every street of London in the era of Google Maps (and I definitely don't want to pay for it).
So, let's not kid ourselves - Uber is strictly better than what was before, and given its global availability, it also has a moat (when you land in city X, are you gonna load and set up local taxi cab that you don't know or trust, or just use Uber?), though there are still some regulatory / monopoly issues (e.g. in London Uber can't use bus lanes, whereas black cabs can). But I want to take Uber whenever I can and I want London cabs to die in fire.
(Having said that, I'm short on Uber as I think it's overvalued - but that doesn't mean without value. Also, I'm not against regulation - cities could improve relevant regulation e.g. preventing Uber from lying about surcharges, driver availability / location and preventing drivers from cancelling rides, but most cities choose to instead serve entrenched interests by (attempting to, yet fortunately often failing) enforcing monopolies.)
> predictable waiting times, ease of finding cabs in remote locations, ease of payment
As someone who used call cabs in various Polish towns and suburbs since early 2000s, is claiming this was particularly bad is short memory or is the US bad at not just mass transit but also taxi service? I could get a cab within 15 minutes pretty much in any agglomeration, and even close suburbs. I didn't even need an app.
Same in Slovenia, yeah. Call, wait 15 minutes, cab shows up... or not. Again, Uber / Smart Phone tech improves on that, at least they tell you immediately if the driver cancels. (Admittedly, in the old days, the drivers didn't actually cancel, just gave up when they couldn't find your house or you weren't waiting outside at the very right moment... still Uber solves that, mostly.)
> Same in Slovenia, yeah. Call, wait 15 minutes, cab shows up... or not
...I had that happen _once_, and:
> at least they tell you immediately if the driver cancels.
...exactly that happened. Amazing, it's like they ask you for your phone number for a reason. This wasn't much of a problem pretty much since cell phones became a mainstay. I am not sure how Uber improves on that, guesses from the travel path that the driver gave up even if the driver decides not to report?
An Uber can't pick up a new passenger without cancelling their current pickup or picking up their current passenger and finishing the ride. Either way, the passenger both can see if they're coming to pick them up, and are made aware immediately if the driver cancels.
With cabs, you're expecting a cabby to call to dispatch that they're not picking you up. A cabby can easily be on the way to pick you up, find someone on the way and never let you know. That's a big difference in both what's possible, and what the reality is: cabbies never let you know if they're not coming in my experience. That said, many cab companies have an app now.
>> Otherwise, yeah, Uber did fundamentally improve both productivity and service quality vs. traditional cab companies.
This was true when they started and not really true today. There are many taxi companies with proper licenses and full time employees using the same app model as Uber. Taxify (nowadays Bolt) is one example.
I don't know if you've ever taken a taxi before but this is nearly impossible for your statement to be true, simply by considering that the shared rides are more efficient from a common sense point of view.
Even if Uber isn't operating with more efficiency right now due to R&D and global expansion, there's no reason why they can't be given that they aren't operated by a guy on a telephone manually dispatching cars.
I have indeed taken a taxi before. I still have the photo in my album of cherished memories. I flip back to it each morning to relive the experience. Ahhh.
"Nearly impossible" is a simultaneously weak and strong claim. Let's try to break it down.
It may be useful to distinguish between shared rides and people using Lyft / Uber / X for a single group riding to a single destination. If there are stats on the distribution of number of parties in a single trip for the major providers, that would be a helpful stat. My anecdotal experience is that most rides I've taken and that I've seen others take are not shared, particularly for those on the higher end of the willingness-to-pay spectrum mentioned in the article. (If you're on your way to an important meeting, do you really want to throw in the variability of maybe picking up someone else along the route?) I don't think Lyft and Uber are perceived primarily as shared-ride services -- they originated as alternatives to single-party, single-destination rides. IOW, as direct alternatives to existing taxi service.
In terms of efficiency, please look at the breakdown of costs in the article -- I even excerpted some of those here. The cost of dispatch is actually quite low among the components of costs to run an urban hail-ride fleet. Look at Uber's R&D costs and, even amortized over the anticipated rides, and compare that to "a guy on a telephone." One fully-loaded Uber engineer's salary would pay for tens of full-time dispatchers in N. Amer. / European cities and hundreds of dispatchers where labor costs are lower. Similarly, the costs of fleet operations in terms of cars are going to be higher. Do you think "some driver with an app" can maintain and utilize a vehicle better than a taxi fleet, which can run the car 24/7 and have centralized maintenance facilities and bulk discounts on supplies and fuel? Efficiency considerations need to take into account both the costs and benefits. I think one of the points the article is trying to make is that Uber has been hiding these costs or relying on subsidies from private investors until recently.
One of the broader points the article attempts to make is that urban ride-hail fleets have attempted to optimize for things other than the pure efficiency of the rides. For example, they optimize for serving otherwise underserved areas (where some taxis won't go or won't take you because they're concerned about the unpaid backhaul). They optimize for some driver protections. I think it's useful to consider what is going into any definition of "efficiency." Is it utilization time of the vehicle? (This doesn't account for number of passengers served if the rides are longer because the rides are in suburbs rather than dense urban cores. It also doesn't account for taxis being utilized 24/7 while a privately-operated Uber maybe is operated 14 or so hours / day -- if the driver is willing to push the margins of safety and sanity.) The number of rides per hour? The time it takes per unit of distance? (On that last point, there's some evidence that the rise of uncapped ride-hailing services in urban cores has led to significant traffic increases s.t. it's actually slower to get around now in dense cities precisely because of Uber.) The article attempts to call attention to some of these other possible dimensions of optimization. Depending on which dimensions are optimized and the transportation network, it is entirely possible for "a guy on a telephone" to be more efficient. And questions of fairness -- for drivers, for pedestrians and mass transit riders, and for others -- will be affected by that choice of optimization.
Uber could be profitable at higher prices. But would we just be left with a higher-priced taxi service that significantly decreased fairness?
They’re valued on growth, so if they decide to stop growing their valuation will plummet.
If they raise prices then quantity of rides will go down. If quantity of rides goes down, it becomes harder to earn a living as a driver. If it is harder to earn a living as a driver, there are fewer drivers. If there are fewer drivers, then the cost of drivers goes up.
Not to mention the fact that if uber becomes 10% more expensive a large chunk of those customers will just go to lyft.
Honestly, the price increase on both platforms recently has pushed my household (Wife + Me) back to Muni/Driving. Previously, if one of us used ride sharing it was ~$5-8 each way. Now for the same ride we regularly hit $12-20. It was so bad the last week of my wife using them that she paid ~$18-20 each way, when I reminder her that that was $200 for the week just to get to work, she was shocked. At 4 weeks in the month thats a decent Mercedes payment, getting close to insurance+gas locally.
Now we only use it for the occasional night out where we just factor in the expense as entertainment. These services only have a marginal value that is approximately 2-3x public transit. In SF that is Muni at $2.50-$3, so $5-9 one way. Once you cross the $10 and creep into $15-20, you have a problem and the business crashes and burns.
In my twenties I remember working at a bar near chinatown. I would get off and my feet would be killing me. It was only maybe 6-8 blocks up Sutter to get to my old place, but every once in a while I would waste money on a Taxi. I remember it killing me that they started the meter at $3.50 and it would end like $8-10. Always felt like if they just flat rated it at $5 for my 6-8 blocks, I would take it everyday to and from (Uber sort of did just that and I rode it like crazy for a while), but at $10 it was a special treat and the rest of the time I schlepped up Sutter, feet be damned.
If Uber pays drivers more than Lyft to a point where drivers stop driving for Lyft, riders won't be able to get a ride on Lyft, so they'll pay Uber's higher prices. Not everyone will; some will opt for a regular taxi, driving themselves, or transit. But I suspect that there is actually some combination of higher ride prices and higher driver salaries that will keep Uber alive and growing, though probably not at the same rate.
I believe that you have the power dynamic reversed. I.e. The drivers will go where the customers are more than the customers will go where the drivers are.
A driver only gets paid if a passenger rides. If Uber increases the costs of their rides over a competitor, the the customers will opt to the competition.
The basic economics argument assumes that there are not price points that are both higher than what drivers accept and that consumers are willing to pay. The existence of Lyft plays a role here, but both are in the same boat - they either need a new product line with better margins to take off that has some synergies with the ride-sharing business, or the unit economics of ride-sharing need to get bad enough for both concurrently to decide to raise prices.
The fact that taxi cabs existed for decades and were profitable means that this price point exists. That was the whole reason lyft and uber entered the market in the first place.
It all goes in a circle though: why did city governments sanction taxi cartels (by issuing a fixed number of medallions)?
Because if anyone can be a taxi anytime (aka open market), then you get a race to the bottom, both in quality and availability. Then there isn't a steady supply and a lot of collateral problems (accidents, crime, etc). The solution a century ago was to regulate: limited number of taxis and minimum driver qualifications. In the days before apps and routing, it meant that there were taxis available most of the time, except for maybe at peak times.
My point is that taxis are an extremely good example of why you need regulation. Uber and Lyft will succeed to the point they can replace that regulation (cheap enough fares, good enough cars and drivers).
You could also argue that Uber and Lyft are controlling the taxi market because they don't let drivers set their own fare. From the point of view of the driver, taxi-driving is an Uber-Lyft-sanctioned cartel right now.
Uber should just increase their rates dramatically, increase the driver’s share and offer discount subscriptions to loyal customers. Spontaneous riders pay more, others pay less.
Driving people from point A to point B is a commodity. The only reason taxi drivers were able to command a premium was restricted supply through licensing/medallions and whatnot. Uber destroyed that, so now competition will drive the prices down to the actual cost of driver wage + petrol/vehicle operating costs.
Uber will see their margin squeezed down to nothing because they add nothing of value to the transaction: Any random cab company can buy a dispatch app.
That is actually the case in many markets - in Russia local city cab companies all have their apps, so you have three-four installed and you're good to go. And Russian Uber (aka Yandex.Taxi) is here as well
I mean resistance to his ideals and methods are based on his relative carelessness towards anything but his and the company's goals.
Incredible leader, amazing CEO with the raw ability to move mountains for the company's growth.
Remarkably bad at human and helping humankind.
If burning the Amazon rainforest helped Uber's goals he would have it torched in the most efficient and rapid method possible by morning light. Perfect CEO for the shareholders and maybe for keeping the lights on, not so much for the rest of us.
> CEO with the raw ability to move mountains for the company's growth.
Perhaps to a fault. He seemed to be so singularly focused on increasing revenue that, when it became clear that people would line up around the block to buy crisp new dollar bills for $0.75 apiece, he didn't hesitate for a second.
I would say that the way how Uber aggressively expanded throughout the world has massively helped humankind. Because of Uber, many countries have changed their taxi laws, and many local competitors have sprouted up. More efficient taxi and ride-sharing services help save the environment and make cities nicer. Of course this is quite theoretical but I believe Uber was the needed company to push the mass transit development forward.
Was making more taxis on the road with more downtime and increasing congestion really an improvement in cities?
A Recent study found that 50% of all cars in lower manhattan were rideshares. Is that really a better world? Ridesharing in cities has been absolutely proven to increase pollution rather than reduce while carpooling in rural areas helps reduce pollution. The problem with rideshares is that they are jobs based on time rather than efficiency. You drop someone off and then you are available to pick someone up, so you drive to them, drive them where they need to go and drive to the next person, the points between passengers are reductions in efficiency vs single cars and add to congestion in high congestion areas. In any case mass transit is much better in cities.
In most of the US, probably. It's not so clear cut in London. The tube is usually faster and more pleasant. (London's air quality is pretty bad, and many Uber drivers have an annoying habit of driving through heavy traffic with the windows open.)
Sure, but London has always had taxis, too, because sometimes they're the better tool. It's not like some people are taxi-takers and others are subway-takers. You use whatever's best at the time. When I lived in Boston I took the T every day -- but on some occasions, a taxi was the better choice.
And the negative externalities of all those additional cars on the road are far worse than if you just have more people using the existing subway, too.
If you're going to do a full accounting of all the costs of all those additional cars on the road, and all that additional congestion, then rideshare doesn't come out looking so rosy.
> Honest question: Who or what was "really instrumental to Uber's early success"?
Using VC funding to bankroll an unprofitable business model, undercutting existing industry players who didn't have multiple billion dollar rocket boosters, mostly. Ignoring laws and other unethical practices no doubt helped.
For non techy startup nerds, it was probably the fact that the Taxi industry was almost universally loathed, expensive, and unreliable.
The on-demand rides industry (Lyft, Uber, et al) managed to not only lower pricing, but also bring Karma (bi-lateral user ratings) to the whole industry so that a driver can't just say "fuck you" to a passenger without consequence (nor could the passenger to the driver). If this didn't improve the world, I'm not sure what does.
From my experience, singing Travis Kalanick's praises (at least on HN) has generally been met with resistance. I remember everyone piling on him about that (what I thought was a relatively innocuous) company retreat memo a few years ago.
There's a big difference between admiring Kalanick as a person, and admitting he created the über startup. (I think) most people on HN realize that questionable ethics are strongly correlated with success.
I wonder about Uber, they have spent lots of money branding and getting everything in place, that they overshot the whole making money aspect and now playing catchup. Problem is, will they reach that balance before they bleed beyond the point that they become vulture targets for another large company to step in, cherry pick what they want and discard the rest.
With all that said, I wonder if maybe Amazon or some self driving car startup steps in and buys them up for a lot less than it would to build that penetration. Can imagine your Amazon owned Uber driver bus picking you up, with half a dozen stops on the way, some people, some packages, doing the rounds. Things change, how will Uber adapt and more so, all those drivers on zero hour contracts, are just as easily laid off and much cheaper as well. Self driving cars are a case of when, not if as so much being done in the field, progress has become a hot competition and slowly getting there.
Uber was very profitable when they just had Uber Black. The problem is they were disrupted themselves by Lyft and had to launch UberX (give Travis credit for launching this before Lyft even though it was their idea).
Are you sure?
In the recent book about Uber written by Mike Isaac,the author stated that Lyft was the first to launch a low cost ride service with non professional drivers and Uber rushed to copy them.
Sidecar was the first service I remember that explicitly used the current UberX/Lyft business model when all these companies kicked off in SF. Back then your payment to your Lyft driver was still called a “donation” because it was originally intended as a carpooling app like what WaZe has now.
I read the book last weekend and am going with my memory (I’ve since lent it out). In the book Travis found out about Lyft’s planned rideshare service and raced to launch UberX first.
Alas google has become useless for finding useful information so I hope somebody who still has the book can confirm.
> Self driving cars are a case of when, not if as so much being done in the field, progress has become a hot competition and slowly getting there.
My skepticism of self driving vehicles in general is in desert climates. I really want to see a self driving taxi the day after a blizzard in Chicago (or elsewhere in the upper midwest... or even NYC when there's a good storm) where on some streets two lanes in each direction become one, and intersections can become "well, I'm not stoping because the car isn't stoping, thankfully the other drivers understand this and aren't asserting right of way when things are slippery". Some roads are closed and the smart drivers are happily driving 20 under the speed limit on the highway behind a snow plow.
Until then, self driving really strikes me as more of a California or summer time thing.
> Snowy conditions are a serious challenge for the laser-based Lidar and other sensors that self-driving cars use to see objects in their path. Waymo said it’ll start working to overcome weather issues in Detroit’s notoriously tough winter months.
The Dallas office is an administrative office and will not have eng roles. Also, these are all "promises", we really have to see how it plays out. Promises are cheap. Remember how Foxcon was going to hire 10k people in Wisconsin
I know many engineers who want to get out of the Bay Area. San Francisco is a disaster, they’re priced out of the the peninsula, and commuting one or two hours each way from the hinterlands loses its appeal real fast.
That said, getting laid off like this would be much harder to bounce back from if you were not in a tech hub.
This is a bold move for sure. It sounds like they might have hired the wrong people so instead of "redeploying" them they just cut pretty deeply. Definitely unfortunate for the employees but also impressive that Uber had the guts to do this. I've seen companies let dead weight hang on for too long. The fact that they are still hiring makes me think that this was not a panic move to address Wall Street.
There's definitely a tightening of capital happening right now. Investors are pulling back as fear of recession grows.
EDIT: Did I say I believe there's a recession coming? No. I said (accurately) that there are growing FEARS of one. There's definitely tightening of investments and capital happening.
Not really at the early stages from what I can tell. There is definitely a correction happening in late stage pre-IPO and recent-IPO companies. In part because everyone is realizing that SoftBank are actually the dumb guys in the room, when the prior common view was that they were the smart money. A lot of these crazy valuations (Uber, WeWork, Slack, etc) that are getting cut were set by them.
I mean there's also the fact that California has pending legislation that seems ready to pass that will kick Uber (and others in the gig economy space) right in the wallet. Next 2 years should be interesting as we see what effect that has on things.
What's funny is that if they were employees then uber would be a lot harder to compete with. As it is now uber drivers will use several apps and often recommend competitors to customers, which they're entitled to do as private contractors.
Uber is publicly traded, they can no longer do funding rounds as they always have. That is more likely a reason for layoffs than uber fearing investors fearing recession. If anything it's a signal that the company is publicly traded, not recession fears.
They run on investments (still haven't made a profit). If investors get shy (due to fear of recessions) then they have to cut back the pipe, and uber is forced to layoff.
435 people, especially engineers, is no small sum of money.
Kinda interesting that they chose to do the layoffs during the Apple event. I wish companies would just own what's going on instead of trying to bury it.
Uber's core business is a taxi app and I get that there are some clever algorithms involved, but I still don't really understand how they justify the size of their engineering team.
I read that they had 2,000 engineers out of 6,000 employees in 2016, though I don't know the numbers now. That seems gigantic.
There is Uber Eats, Freight, and JUMP bikes in addition to their ride-hailing product. I believe they share some technical similarities but still each of the four(I know of) are startups ideas imho.(See Lime, Lyft, Sennder, Delivery Hero, Takeaway.com, door dash etc.)
Agreed, I'm curious what they are actually working on with a team like that. Although they do have a not unsubstantial physical data center presence so I think a fair number of engineers are in support of that and not software engineers.
Google is pretty well-known for maintaining a very deep bench-- if an engineer isn't effective in some role, they'll just move them to some other team. Heck, a lot of hires (especially 3rd/last attempt) go directly to the bench. This strategy pays off well when a new competitor (like Facebook or Uber) comes along and snatches up people in the lead roles, or if the company feels the need to pivot to something really fast (e.g. Google+, which drew from many teams across the entire company).
Moreover, hiring a long-term employee today versus tomorrow might save money for a place like Google, assuming we expect competition and wages to continue to increase.
It strikes me that if Uber is laying off software engineers, their company outlook must be very, very dire. A layoff is perhaps better strategy than firing the bottom 5%, which would likely preclude the departed from re-joining at a better time. But probably the wrong message to send to a cohort like software engineers-- a layoff is a legal confirmation that the company made a big mistake.
This strategy works very well if you have a gigantic money printing machine, which Google does. Uber has a gigantic money incinerating machine. They don't have the ability to just have engineers spinning their wheels on non-business critical projects like Google does.
Or in the case of Amazon you have both, printing money with an awful culture of churning through employees. They even structured their stock vesting around it.
Google makes a ridiculous amount of profit. Uber loses a ridiculous amount of money. They can’t afford a back bench of expensive California engineers that do not help to quickly reverse the huge losses.
The press release mentions the hires were the result of "decentralized hyper-growth".
That is basically code word for political fiefdoms seizing power.
No cloud-hosted or SaaS company should allow silos or redundancy around communal services.
This is long overdue and Dara is making the right move to clean up.
But to your point.... should the Engineers be reallocated to a bench until properly utilized? Yes. Moves like this can be poisonous to culture long-term.
You can't actually terminate that many people without a planned layoff, according to CA labor law. It's to protect workers from mass firings (at least a little) https://www.shouselaw.com/employment/warn-act.html
Im not sure how much one can extrapolate from this. Google also has the massive scale, in terms of both headcount and profit, to smooth out things like this and hold onto talent for the longterm. As huge and well-capitalized as Uber is, Google really is on another level.
I was told by a Google HR that on average a candidate tries 4 times before passing the interview. That's believable because when any of the 5 interviewers saying "probably not" translates to a no hire, stars really need to align even for stellar candidates.
I believe it's 3 times per level or role. One could interview 3 times for l5 SWE role and thrice more for l6 when they are deemed eligible again.(With more experience etc.)
I mean one company prints money, and the other has some of the biggest losses in tech industry. What do you expect?
If anything, Uber has invested in too much tech for the sake of being tech heavy, which may not be best suited for their business (outside self-driving, which needs heavy tech investment).
Google invests in a lot of moonshot projects, and also shuts down projects regularly. To their credit, they are willing to invest in high risk/high reward stuff, so the fact that Google is investing in something doesn't actually mean that this thing will succeed, or not be cancelled in the future.
But remember that there is a lot of value between "no computer on board" and "fully self-driving". Cars already have things like lane assist technology, smarter cruising technology, collision avoidance, software to help maintain distance between the car ahead of you, smarter breaking, better mapping and routing technology.
These are valuable features that can generate revenue even if fully automated self-driving cars never happen, or happen in 100 years. These are also features that can help older drivers with slower reaction times stay behind the wheel and keep driving, thus increasing the number of human drivers.
No, that was closer to “more wood/fewer arrows” (but that was more about aimless toys than deliberate moonshots), which was several years before Alphabet.
Alphabet was to more cleanly separate (in branding and organizationally) the core Google business from other ventures, which moved the moonshots out of Google proper. It wasn't to kill moonshots, though it may be accurate to say it was in part about being better at maturing them.
I never said it was impossible, it's just not an absolute certainty or just around the corner as people make it out to be. It's at best a research project.
Why would Uber necessarily reap outsized benefits from self driving though? In my mind, "ridesharing" would be even more commoditized, with price and safety being the two main factors in consumer choice.
This is untrue. It doesn't take into account the fact Uber has externalised a bunch of stuff like maintenance onto its drivers. Bringing it in house would sink them imo, human capital or not.
> If the maintenance of cars out weighted the profitability for the driver there would be no Uber drivers at all.
This assumes drivers that correctly allocate the source of maintenance costs among all uses of the vehicle in assessing cost/benefit of driving for Uber.
No, it assumes that when a driver can no longer make ends meet since they are paying more in maintenance than they are earning, they will no longer have money for gas to be an Uber driver, thus quitting.
> No, it assumes that when a driver can no longer make ends meet since they are paying more in maintenance than they are earning, they will no longer have money for gas to be an Uber driver, thus quitting.
So, it assumes no new supply of drivers misjudging costs, and no drivers with multiple income streams that fail to recognize the source of maintenance costs and that Uber is losing money.
It's basically a “no one will buy lottery tickets or engage in other less-than-break-even gambling for non-entertainment purposes” argument, except that gambling venues are usually required to publish their net payout stats, while Uber isn't.
Car maintenance is something that's done already, i.e. by people who want to actually use their own car? I still maintain Uber is something for free here.
I've been wondering about this for years, do you have any data to actually back that up? Seeing how teslas are "very close" to self driving why doesn't uber up the game and go full self driving with lidar.
I mean Google and Facebook want the option to prevent their engineers from building something that may compete with it n the ad space. Rest and vest right? Uber competitors would need to do something in the delivery, leasing, transportation and ride sharing space to be specific threats. Maybe ride share could be disrupted with a peer to peer model. I always thought that the carpools across the bay bridge where interesting. That's basically self organized and very effective.
> It strikes me that if Uber is laying off software engineers, their company outlook must be very, very dire
I doubt that. Uber's place in the market is very much theirs to lose. It's more reasonable to think that this is the market for software engineers in SV/SF starting to correct itself.
Yeah, if you work for Facebook on something Google wants, you can flunk 10 onsite interviews in a row... There was some blog post from a guy who flunked like 7 onsite interviews, year after year, before he got into Google...
They are in a race: Be the first with self-driving taxis and go for the monopoly, or run out of cash. I don't want to sound pessimistic, but my bet is on the latter. It's just such a hard problem, especially in cities.
I just hope there won't be a kind of AI winter when some of these startups run out of money.
This is thrown out all the time. How exactly does this save them?
Are they going to spend billions to purchase and maintain a fleet of their own taxis? Are they going to be paying people to "borrow" their self-driving cabs? Something else?
I just don't see how this suddenly changes the equation in a meaningful way. People aren't going to spend more for a self-driving ride and the costs can only go down so much.
Because self driving cars, while expensive, are still significantly cheaper that employing drivers. Furthermore, it could be argued that you need less self driving cars than cars with drivers, as they never need to take breaks, and can work all hours of the day. It would also drastically decrease ubers cost of entering new cities - previously they relied on driver incentives, this flattens the variation in cost greatly.
> Because self driving cars, while expensive, are still significantly cheaper that employing drivers.
Are they? How much does a self driving car go for in today's market? And does your calculation include the fact that a driver comes with free car, maintenance, fuel, etc.
Even if the numbers do add up, SDVs aren't about to roll out next week. Remember how close we were to VR for about 30 years?
But they're not paying for cars now. Buying a fleet of self-driving cars to cover all the cities they are in will require many billions of capital investment.
> It would also drastically decrease ubers cost of entering new cities
Entering a new market will require buying hundreds of cars + investing in facilities to maintain those cars.
>This is thrown out all the time. How exactly does this save them?
They know that their days of paying drivers less than a living wage and no benefits are numbered. They have two options: Raise ride prices to pay drivers more, or get rid of drivers altogether. They're betting on the latter. The costs go down dramatically because buying cars is a one-time capital expense, rather than an ongoing cost of doing business. (Yes cars require maintenance but this is still cheaper than paying drivers.)
> This is thrown out all the time. How exactly does this save them?
I agree 100%.
There's a lot of evidence that self-driving cars will be MORE expensive that paying people to drive their own cars. Particularly since the R&D costs are just prohibitive.
With prices lower than all other taxi services they will soon be a monopoly. Also, lower prices can lead to many people not owning a car anymore, which will be an even larger market.
How does this work with layoffs + hiring? Can you layoff and then hire in the same department? I assume companies agree to pay at least unemployment and possible severance too in the case of layoffs. Can a company say "These 80 employees are under preforming" and justify a reduction in force that way? (I guess in at-will employment you don't need to justify it at all, so long as you meet legal unemployment requirements?)
Are they getting rid of under performers and getting new blood or are they cutting people from certain departments (in which case, they could apply to be rehired in another division?)
Like another poster mentioned, up until 2 years ago (?) Uber was handing out very fat compensation packages even to entry level engineers. It's possible these are employees who've been at Uber for 2+ years and are frankly overpaid even if there were no serious performance issues.
The article says they're trying to reduce overlapping and redundant work, and restructuring teams in a way such that they intersect less implies they run more efficiently, so they only options at this point are to lay people off or find new projects for them to do. The former makes the most sense considering how little money Uber is making and how their bottom line might increase if they legally become employees (minimum wage, health insurace, threat of unionization, etc)
My impression is that at a large company it's easier to cut in broad strokes and then hire for specific roles.
Many companies, certainly Uber as well, do smaller force reductions where the employees have ~60 days to find an internal role, after which they're laid off. It sounds like the same thing, but, it allows you to possibly keep the employees.
I've always wondered if uber were to abandon their ongoing development efforts and focus on support and maintenance, would they would actually be profitable? It seems to me they would need a fraction of the tech workers they currently support.
Fact check: R&D spend for three months ending June 2019 was $3.06B. Reported loss for three months ending June 2019 was $5.24B. So, already false.
Now take away the one-time IPO expense of $3.9B, and we're not even close to being true. Further take away the $300M "IPO driver appreciation award" and you end up with a $1B loss for three months ending June 2019. In other words, the quarterly R&D spend is over three times the size of the quarterly loss.
But that IPO stock-comp expense is largely attributable to R&D, so if you want to subtract that from the losses to look at a more cash-focused analysis you have to substract that cost from the R&D side as well.
Of the $3.95B total stock expense, $2.56B was from R&D, which suggests cash cost that quarter was more like $910m (still a lot!)
To my mind this quarter shouldn't be used at all in this kind of discussion since its so messy. e.g.: I take your point, but that $2.56B is the culmination of over ten years of R&D compensation. It's not at all representative of the company's broader financials.
OP's inference that Uber's quarterly loss is more than double Uber's quarterly R&D costs in general shouldn't be propped up by a moment in time observation.
Based on year 2018 numbers, Uber needs to grow their revenue by 9.3%, and reduce their expenses by 6% to book a 0.1B profit. Assuming an average employee expense of 230k per year, Uber letting go 435 puts them 6.66% on the way to profitable expense reduction.
I suspect when the economy takes a downturn luxury purchases like this will be the first to go. If I think I might be laid off do I spend 10 dollars to Uber home or walk the 5 blocks and have one less drink? I would personally have one less drink and walk, or take the train/bus... Those 7 dollars Starbucks venti iced white chocolate mochas with 5 shots will slow also.
Is it any coincidence this happens the week that CA is debating a bill that can drastically change how they compensate drivers? It appears like they are trying to gain leverage from an outsider’s perspective.
This is an unsustainable business model. If you draw a Gaussian surface around it, the end result is that Uber/Lyft will destroy the taxi industry (which was execrable, but put a fair amount of kids through college) and replace it with pauperized “contractors” too naive to calculate depreciation. And at the same ultimate fares, but with less share for the drivers.
"Of those laid off, more than 85% are based in the U.S., 10% in the Asia-Pacific and 5% in Europe, the Middle East and Africa, according to the source."
Interesting. This hit seems to be mostly localized to the US. During their last mass layoff in July, employees from all over the world were affected.
I predict this situation to get worse over the next couple of years and will culminate in Uber shutting down the self driving project and partnering with Waymo.
Maybe Uber should focus on fixing their main app first. Driver can't get rides even after being online for hours sometimes. Card payments are being delayed and now I know why they are decreasing bonuses day by day, due to over hiring, because they have to pay over hired engineers a shit amount of money thus decreasing drivers bonuses!
There's no logical explanation for any of these steps. Every company that is being funded is not funded for being responsible, but for showcasing a hockey stick growth and making investors go $$$$$$$. If you're lucky, there's a chance your company will be an unicorn, and if you are luckier, your stock will mean something, and if you are one of the luckiest, you can actually sell it and do something else with your life than work. Anecdotal evidence shows that you need to be really lucky than be meritorious to make money. It also shows that even with low luck, periods of employment basically give you that money stream.
Leave the analysis for someone else and get going! I've already done the good deed of referring the Uber engineers in my network.
IMO, about the open source thing - Now that you've left Uber, you still have the neat tools you need to build something better, faster, bigger and someone else already paid for the caveman to science work.
Perhaps the next question is, what do 4000 engineers do? Not aimed as a troll-y question: an informed idea of what the breakdown of that many engineers do would be enlightening. For example, there were about 200 iOS engineers the last I heard. Assuming similar levels for Android, that leaves 3,500-3,600 engineers.
+1 Appreciate you avoiding the usual "it's just a little smartphone app"
I'm not going to try and give an exhaustive list, but as a rough explanation: things get really, really hard when you're operating at Uber scale (hundreds of thousands of riders on trip at any one time, each demanding low latency and reliability):
- Product: native clients for each side of the marketplace in each vertical (rides, eats, freight, atg, et al), maps, localization for every country with a presence (not just language, but tax, legal, hundreds of region-specific modes e.g.: tuk tuks)
- Infrastructure: hardware teams to build on-prem DCs (cloud can get very expensive at scale), software networking to deal with said low-latency traffic, storage to optimize for reliability/latency/cost, observability (metrics, logging, alerting, tracing), security, et al
- Data: insights, operational support, routing, et al
Uber doesn't just make apps for phones.
They also have an entire self-driving car division (computer vision, etc), car routing, maps folks, payments, the separate driver apps, etc. A company that size and complexity has plenty of work for engineers.
I still feel like this is a ridiculous amount of workers when one takes into account that the product they're offering is essentially a smartphone app with a backend service that pairs drivers and customers, which regular cab markets do without almost a single person.
To me Uber feels like some sort of soviet-era experiment of replacing a market with someone micromanaging cars
But of course, when you just oversimplify what the app actually does it sounds like it should be so darn easy to make and maintain.
It's like saying Microsoft Office is "just an app that writes documents" or that GMail is "just an email client."
Uber and Lyft do a whole lot more than what you described on the scale of millions of concurrent users in dozens of countries.
Your comparison to a taxi isn't really a great one because you see taxis sitting around on curbs and driving around empty looking for a passengers all the time. A lot of the cost of a taxi is you paying for idle time.
>Uber and Lyft do a whole lot more than what you described on the scale of millions of concurrent users in dozens of countries.
which is my point. There's no use in engineering and coordinating something that organises itself. The utility of a centrally managed service needs to be balanced against the resources it costs to run the operation.
Taxis actually don't spent as much time sitting around as you think, traffic organises quite spontaneously, drivers know where to wait and downtime is usually quite low. Which is why it is so difficult for Uber to make a profit, the efficiency gains compared to the engineering effort that goes into them are miniscule, which is the disease of all centrally managed systems. The Soviet planning buro managed millions of factories which sounds impressive, it doesn't mean that they were any good at it.
If Uber would realise such huge efficiency gains in organising rides the result would either be higher wages than taxi companies or lower prices, which would make them instantly profitable, no billions of subsidies required.
I work for a company that does kinda similar software stuff for vehicles - Uber has about two orders of magnitude more drivers than my company, but about three orders of magnitude more engineers - it's almost like they've got diseconomies of scale.
Two orders of magnitude are a lot of orders of magnitude. It could be the difference between using really easy off-the-shelf solutions to having to architect your own technology to solve scaling issues like Google has.
Uber operates in many more countries than us. Enough to necessitate ten times more engineers per driver? I can't really say without more insight into what they're doing.
One thing I've learned time and time again in software is if something seems super simple on the surface, it almost always means there was a hell of a lot of engineering and attention to detail to make it seem that simple.
Because otherwise they're not ``growing''. A company with just enough people to maintain what they already have can't promise to take over the world or whatever.
this is a good question, not just for Uber but for many companies. It would be interesting to see how large companies utilize large scale employment, seeing the breakdown of what needs to be done, how much of it is R&D, how much of it actually moves the needle on assisting in company operations.
I work in a big organization of over 1K people and although most people work extremely hard, I still don't see how most of what we do helps the company enough to warrant a decent ROI.
This strikes me as a sort of "Uber? I could build that over a weekend" kind of comment.
27k does sound like a lot, but your figures seem arbitrary if you've never looked at their internal software, operations, what's being developed that we don't know about, etc.
This is probably good news for "City Storage Solutions," Kalanick's new startup, given the volume of recruiting emails I've seen going around from them.
Sounds like an awesome opportunity for hiring managers. At my last company, I'd be all over this, and indeed may be all over this when I start my new position.
I can't belive that such simple and hugely profitable idea needs such huge staff, which can only screw things up. No wonder these idiots are losing big money!
It seems like technology plays a role in these paradigm shifts, perhaps awareness might inspire folks to leverage the workforce in new ways, maybe with technology.
Obviously everything I say is personal experience and opinion. I think the layoffs were long overdue and should've happened sooner. There was a general understanding between my coworkers and I that Uber definitely over hired in 2016. Thanks to that a lot of engineers ran out of things to do which led to political infighting over roadmap, ridiculous redundant resourcing - every single team had mobile/web, severe shortage on infra teams since head count was already taken by main Uber teams. We even started building and maintaining our own chat app. I disagree that all the cool eng project that we put out and share here is a waste of time or resources. Those project was initiated by real needs on Uber and only the best make it out into the rest of the world. Engineers that shipped those projects are still here and we would've done it regardless of whether the 435 people that were hired in the first spot. I fully realize that it's an insensitive thing to say but I think it's important that it's expressed somewhere.
I think the lesson here is to grow responsibily, and it's real people's lives that are being affected. Don't hire people to alleviate your current engineer's burnout and stress. Learn to plan better and to prioritize aggressively instead of just hiring and getting everything done.