Uber, Lyft And Oil Frackers: Tech Mirages, Not Real Businesses

Ultimately, businesses must make money for their investors or those businesses are shut down. It's true that some businesses "make" money by laundering it for people engaged in criminal enterprises.

There is another category of businesses that don't make money but are not an extension of criminal activity. I'm calling them tech mirages. Tech mirages appear to be exciting, new viable businesses that are revolutionizing the way we do things. That's the mirage part!

In fact, they are doing old things to which they add some not particularly new technology and in the process attract and then consume vast amounts of capital. Investors are dazzled by the mirage while seemingly incapable of understanding what the financial numbers are telling them.

Ride hailing giants Uber and Lyft are two examples of tech mirages. The part of the oil industry engaged in extracting oil from deep shale deposits using a special form of hydraulic fracturing or fracking is another tech mirage.

Here are the main problems with tech mirages: 1) They destroy or undermine existing businesses, weakening them to the point where they collapse and then those tech mirages collapse themselves leaving society without the service supplied by the businesses they destroyed and/or  2) they distract from what we really need to do to adapt to the twin crises of climate change and resource depletion.

So, how do I know that Uber and Lyft are tech mirages? (We'll come to the oil industry later.) The simple answer is that both have lost and continue to lose billions for investors, and there is no prospect that this will change. (To understand why read here and here.) Both companies claim to be doing something revolutionary. And, while they have introduced improvements in the way rides are made available to urban dwellers, they have changed nothing about how people get from point A to point B. Riders still use fossil-fueled cars driven on city streets by somebody else. Nothing particularly revolutionary there.

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Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular ...

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