# A second issue with the ‘uber for…’ model is that it’s a tax evasion scheme
that also, in the minds…

The formula is stupid, simple, and thus far pretty reliably successful as far
as literally anything in the domain of startups goes: take an…

* * *

A second issue with the ‘uber for…’ model is that it’s a tax evasion scheme
that also, in the minds of investors and credulous media people, transforms a
service company into a tech company. (Nevermind that there have been taxi
services with Uber-style smartphone apps for hailing cabs since before Uber
came around who, of course, got comparatively little out of that because they
quite sensibly didn’t consider themselves to be a tech company.)

The formula is stupid, simple, and thus far pretty reliably successful as far
as literally anything in the domain of startups goes: take an existing
service, fire all the employees and replace them with untrained contract
workers, spend an afternoon on a smartphone app or mobile site, and call
yourself a tech company. Since the tech involved is extremely simple — your
fourteen year old nephew can do it after school — this is sort of a brave re-
branding. But, non-tech companies in the valley don’t get ten billion dollar
valuations, do they? And if you have a ten billion dollar valuation, who cares
if you make a profit?

By [John Ohno](https://medium.com/@enkiv2) on [October 21,
2015](https://medium.com/p/f0e49937cdad).

[Canonical link](https://medium.com/@enkiv2/a-second-issue-with-the-uber-for-
model-is-that-it-s-a-tax-evasion-scheme-that-also-in-the-minds-f0e49937cdad)

Exported from [Medium](https://medium.com) on September 18, 2020.