[xandar11]

This is an example of someone getting rich without increasing economic welfare. It goes against what Paul Graham writes about wealth creation and confirms Tim O’Reilly's view [2] that many people get rich by selling shares to suckers.

[1] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2933177

[2] https://wtfeconomy.com/what-paul-graham-is-missing-about-ine...

[alexandros]

I don't know about you, but the existence of Uber has increased my quality of life. Also, just the decrease in drunk-driving accidents that easy access to rides has brought about is worth a lot. It's easy to see the value Uber has added, and these are just a few easy points. There's a lot more.

[tomhoward]

Everyone is free to make public predictions about the future prospects of Uber, including the author of [1] and yourself.

But this is not an example of the notion that "many people get rich by selling shares to suckers", and this is not the kind of thing O'Reilly was talking about.

The people who have invested billions of dollars in Uber are not "suckers". They are some of the most sophisticated and experienced investors on the world, and they have access to information that is not available to anybody else, including me, you and the paper's author.

Most importantly, they have skin in the game, that the rest of us, including the author, do not. If they are wrong about their investment decisions, they will lose significant amounts of money personally and on behalf of their limited partners, which will hurt their reputations and prospects for attracting more funds in the future.

None of this means that I think Uber is certain to succeed. Of course nobody knows.

But it's unquestionable that Uber has already created vast amounts of economic value already (for people - particularly several women I know - who feel safer in Ubers than they did in cabs, for drivers who make a living from Uber, and for people who can afford to pay for rides more often than they could before Uber existed), and the investors who believe it will continue to create more value are well qualified to make that judgement.

For what it's worth, I dislike Kalanick as a character, and I have no great love for Uber as a company.

I just care about accuracy in discussions like this.

[blowski]

I'm not a fan of either Uber or Travis Kalanick, but I'm not sure I understand the difference between Kalanick selling his stake in Uber and Bill Gates selling his stake on Microsoft. What counts as 'increasing economic welfare'?

[joosters]

He already owned the shares, he's technically been rich for a long time now. Since the latest share sale was at a 30% price reduction, surely the previous investment rounds were worse?

[Lxr]

Can you point to some specific articles by Paul Graham to explain what you mean?

[xandar11]

There is one article where he writes how people/hackers get rich by creating wealth [1]. This is not the case with Travis and Uber, which the article I've linked to shows. It's also mentioned in his article on economic inequality where he asserts that people get rich because they are more productive than others [2].

[1] http://www.paulgraham.com/wealth.html

[2] http://www.paulgraham.com/ineq.html