In Seattle, St. Louis and elsewhere, “ridesharing” services such as Uber and Lyft are causing a kerfuffle. These services, which allow users to submit orders via a smartphone app that are then filled by individuals driving their own cars, run afoul of long-standing regulations requiring the special licensing of taxis by municipal authorities. These licenses, known as cab medallions, have a long and ugly history and are justifiably reviled by libertarians and many others as one of the myriad ways in which the state centralizes control of the economy in the hands of the wealthy.
But in this discussion, some key aspects of the way our capitalist system operates have become crystal clear. When Uber arrived in Seattle in direct contravention of city laws, the system did not react the way it does when a street pharmacist arrives in Seattle in direct contravention of city laws, or when an unlicensed barbershop opens, or a wildcat food truck is spotted. Rather than immediate and forceful enforcement of the law, the government dithered. Special sessions of the city council were held. A special committee thereof was formed. The press reverberated with debates on whether or not Uber and Lyft should be let alone or shut down or somehow accommodated without undoing the city’s taxi laws. KUOW, our local NPR station, regaled its mostly well-to-do audience with roundtables and interviews on what the city government should do.
Why is this? If I, a nurse, started selling my health care services outside the state licensed and approved system, if I put an ad on Craigslist advertising my nursing services to anyone who wanted to pay me directly without bothering to get all the mandated licenses and insurance and certifications, I would lose my nursing license and face stiff fines with very little palaver, and certainly no hour-long roundtables on KUOW. But Uber does not get this treatment. Why?
For exactly the same reason that centuries-old standards of liability were hastily undone in the late 19th century — because capital demands it. Once upon a time, individuals and companies were liable for their actions to the full extent of the damage done, but this simply would not do for the industrialists of the Gilded Age. Without the ability to belch filth into the air and pour it into the water, how could they make money? How could they survive if every peasant or proletarian with a respiratory problem from their factories’ soot could sue and win? “New” standards had to be developed.
The removal of old-fashioned obstacles to capital’s new way of generating profits was the most pressing issue of the age, and the solution was found in the regulatory state, which established both a presumption of innocence if minimum standards were met and capped liability if any harm was found. Even today, these laws protect corporations from the full consequences of their actions, as we saw in Louisiana after the BP spill and as we are seeing today in British Columbia, where the oil industry is lobbying hard to keep their liability cap intact.
And so the same pattern holds with Uber. Cab medallions are stupid, a vicious and damaging relic that actively harms the poor for the benefit of the wealthy investors who can afford to buy them. But when they weren’t harming anyone but the poor, no one cared to discuss them. The odd libertarian or anti-poverty activist might have raised the issue now and again, but the mass media was totally uninterested and no special committees of the city council were formed. But now, they impede capital. Now, wealthy men want to make money, and cab medallions are in the way. So now, cab medallions are an issue.
Should we hail this development as proof of an alliance between capital and freedom? Should we salute Uber as heroes of the struggle for liberation? Absolutely not. Uber is utterly dependent on different forms of state privilege — most obviously intellectual property laws, which protect its trademarks and its app, but also and more fundamentally the state’s monopoly provision of free-at-the-point-of-use roads, along with its certification of cars and drivers as “safe.” Uber is a state capitalist enterprise just as the cab companies are, and this is not a strategic alliance but a momentary convergence of interests- they need something done, and we have arguments that can help them. Of course cab medallions should be abolished. But we should not be content with letting capital set the agenda and call the tune.
