Painful Truth: Real change versus fake disruption

Some tech firms, like Uber, give the illusion of change.

It’s weird that “disruption” has become the buzzword of choice for the early 21st century.

A couple of decades ago, disruption was thought of as a bad thing. Disruptions were angry outbursts, sudden catastrophes, riots, slamming doors, coups d’etat.

Now it’s a new app that will let you order pasta or send you bespoke socks in your size every week.

The disruption that rich people and their apologists are touting is technological and economic. It’s basically the old idea of creative destruction, the notion that new businesses, new technologies, would arise and displace older ways of doing things.

But the confluence of money, technology, and old fashioned snake oil has created some companies that disrupt without actually creating long-term change.

Uber is the case in point. The problem with the company is that it makes no economic sense.

A ride hailing app is a perfectly fine idea. But it doesn’t actually cut the cost of taking a person in a car from Point A to Point B.

Uber can offer cheaper rides than traditional cabs not because of the app, but because it’s using its vast cache of other people’s money to subsidize every ride.

They’re betting that before they hit the bottom of the money bin, they’ll have built robot cars, and they can cut out the expensive human drivers altogether.

Uber’s present success is largely illusory. If they fail, a competitor will take their market, charge closer to market value, and cheap rides will be done. Nothing will have changed.

Uber is like hundreds of other companies, worth hundreds of billions, that only offer short-term advantages to the public.

There are technologies out there now – cheap solar, self-driving cars (probably not Uber’s), vertical farming, automation – that could be genuinely disruptive. If they work out. But for the most part, Silicon Valley is betting on companies that are only accomplishing the back half of creative destruction.

Langley Advance

Just Posted

Most Read