It should surprise no one that gypsy cab company Uber is less of a ride sharing company than it is an exercise in fraud.
By this, I don’t mean that it has no path to profitability (though it doesn’t), I mean that Uber, and WeWork, DoorDash, and pretty much the entire investment portfolio of Softbank is an attempt to generate buzz through a massive infusion of capital, followed by an IPO that offloads the company to suckers.
It seems to me that in addition to those startups, the management of Softbank should be frog-marched out of their offices in handcuffs when the reckoning comes.
It also turns out that Uber is an example of particularly extreme financial engineering:
Uber is not a business in the traditional sense. It’s a “bezzle” (“the magic interval when a confidence
trickster knows he has the money he has appropriated but the victim does not yet understand that he has lost it”).
The only reason Uber was able to attain growth was because investors gave it billions to lose. First, it was the Saudi Royals, hoping to spend their way to a transportation monopoly.
When that didn’t work, the company’s investors suckered the public into taking their shares off their hands in an IPO premised on two things:
- Self-driving cars
- All buses and subways in the world being scrapped and replaced with Ubers.
Neither of those things have happened, of course. Uber actually had to pay someone else $400m to “buy” the self-driving car division it sank $2.5b into (the resulting cars could not travel for one mile without a serious accident).
………
Uber’s “innovation” wasn’t self-driving cars. It was cheating. Uber is really f%$#ing good at cheating.
How good? Well, last year, Uber managed to dodge tax on $6b in global revenues by laundering its income through fifty Dutch shell companies.
………
It’s quite a whirlwind of socially useless financial engineering, composed of obvious frauds like “selling” its IP to a Dutch subsidiary financed with a $16b “loan” from a Singaporean subsidiary, garnering 20 years‘ worth of $1b annual tax credits.
The Netherlands may be a bastion of progressive politics, but it’s also one of the world’s leading onshore-offshore tax havens, joining Cyprus, Luxembourg, Delaware, Wyoming and the City of London as a key player in the global money-laundry.
Our multinational financial system is one big case of, “If fraud can happen, it will already have happened.”
If we actually enforced the tax and fraud laws, there would be millions of people nationwide who would be in the dock right now.