Tech Companies Love Pretending to Save the Planet
Their real genius is not technology — it’s fostering the belief that they’re “making the world a better place”
Twelve months from now, Lyft shares will trade much, much lower than today. Note: Predicting is dangerous work, so if I’m wrong, I’d ask that you love me, not judge me. But I digress.
In the new economy, IPOs are luxury items with the key attribute people grossly overpay for: the illusion of scarcity. There are half as many publicly traded firms as there were 20 years ago, and most new economy firms have found the private markets have all of the taste (liquidity, rich valuations) without any of the calories (disclosures, reporting, SEC filings, transparency, analysts using rational valuation models, etc.). Unregulated monopolies kill/acquire promising young firms in the crib, resulting in scant IPOs.
Lyft’s prospectus sounds like a CFO grabbed the mic at an AOC fundraiser — littered with terms like “social impact” and “carbon offsets.” This is a bit of an illusionist’s trick, as Lyft’s admirable focus on the environment wallpapers over the real emissions of ride hailing: a transfer of wealth from drivers to riders. The “gig economy” is Latin for an erosion in minimum wage protection or the notion that firms should provide benefits to workers. The payoff, according to these firms, and the drivers, is worker flexibility. However, as someone who’s hired hundreds of employees and contractors, the notion that a firm cannot provide flexibility and insurance to employees is simply not true. However, compliance with labor laws sucks, as it’s expensive. Like all of big tech, expensive (non-scaleable) translates to “impossible” for these firms.
The “gig” economy (what a cute word) has been more fuel for a dynamic that’s hollowing out the middle class. Employment has never been stronger — all you need is a smartphone and a car, and you’ve got a job. But wages have been flat for 30 years. Prosperity without progress is a decent description of our economy the last decade(s). The ninja move kicking the middle class in the nuts is best typified by ride-hailing firms. Uber commands a $120 billion valuation, meaning the firm garners the same value as:
- American Airlines