About six months ago, when Uber was first becoming a visible national controversy, I wrote a column (“One Cheer for Uber and Lyft” C4SS, May 16, 2014) in which I argued that Uber, despite being a genuine example of neither peer-to-peer (p2p) nor sharing, was a step in the right direction because it offered at least some competition to the medallion cab monopoly. It was doing to them something like what Microsoft’s Encarta CD-Rom did to Britannica, and would hopefully in turn suffer from a genuine p2p sharing app the same destruction that Wikipedia inflicted on Encarta. Today I’m revoking even that one star. I’d assign them a negative rating, if I could.
A lot of negative material has come out since I wrote that last column — much of it just in the past few weeks — about the crappy way Uber treats its customers, its drivers, its competitors and critical journalists. This is not what a p2p alternative does. A p2p sharing app would be about drivers and customers organizing horizontally, as equals, to meet their mutual needs outside the legacy taxicab monopoly. To the extent that this horizontal organization exists, it is the host organism on which Uber has parasitically attached itself, and from which it leeches out the blood.
Uber, among other things, has pressured its drivers with bad credit to sign up for subprime auto loans. Unlike a genuine p2p ride service, which would be a low-overhead way for drivers to use their existing cars as a source of independent income without increasing their financial fragility through risky capital outlays, Uber wants drivers with new, fancy cars to better suit its marketing image. So it aggressively encourages its drivers to take out subprime loans from GM Financial and other shady operators, who in turn repackage those subprime loans into securities and sell them to pension funds.
If an Uber driver does take on a load of car debt with a big monthly payment, she’d better be careful what she says on Twitter or Facebook. Uber recently fired employee Christopher Ortiz (oops — “deleted the account” of an independent contractor) for tweeting “Driving for Uber, not much safer than driving a taxi” (@chrisjortiz). Uber drivers may in theory be independent contractors using a ride-sharing app, but their subjective experience sounds remarkably like the plain old worker-boss relationship — which is just the older master-servant relationship with a thin coat of democratic varnish slapped on.
Further, Uber sets itself up as a sort of checkpoint between driver and passenger and increases the driver’s dependence on the company by discouraging tips. According to Future of Freedom editor Sheldon Richman, riders do not pay the driver directly. They pay Uber through the app, and there is no provision to add a tip to the bill. Uber’s website says “Being Uber means there is no need to tip drivers with any of our services,” and a company email to drivers forbids them to ask for or accept tips. Nevertheless, Uber propaganda in the past has given riders the misleading impression that tips are “taken care of” or “included in the fare” (“Uber: The Good, The Bad and The Ugly,” Free Association, November 23). I don’t do business with any operation that tries to prevent me from tipping service workers.
To repeat, the whole point of a genuine p2p and sharing economy is empowerment for those directly participating in it. It enables participants to reduce the overhead of daily living and the income stream required to service it, and to increase their independence by deriving incomes from the spare capacity of underutilized capital assets they already own. Uber makes its “independent contractors” more fragile and dependent from two directions at once: By encouraging them to take on debt that requires a higher regular income to service, and at the same time making them vulnerable to being fired (er, “deactivated”) at the whim of an employer. So is Uber an employer or a sharing app that’s just used by drivers? Well, if it walks like a duck and quacks like a duck…
Fed up drivers are beginning to organize in protest. On Oct. 22 drivers in four US cities and London turned off their app for several hours and refused to take passengers (Rebecca Burns, “The Sharing Economy’s ‘First Strike’: Uber Drivers Turn Off the App,” In These Times, Oct. 22). Drivers in California and London have organized unions (assorted “App-Based Drivers’ Associations”). The California union is affiliated with the Teamsters. The London union is demanding Uber’s share of fares be reduced from 20% to 10%, and that a tipping option be added.
Drivers aren’t the only people Uber treats like dirt. Uber management used private location data to track the movements of VIP passengers around New York for their own amusement at a launch party in Chicago back in 2011. Even more disturbing, Uber’s New York chief used the same “God View” software to track the movements of a critical journalist — and bragged about it:
Early this November, one of the reporters of this story, Johana Bhuiyan, arrived to Uber’s New York headquarters in Long Island City for an interview with Josh Mohrer, the general manager of Uber New York. Stepping out of her vehicle — an Uber car — she found Mohrer waiting for her. “There you are,” he said, holding his iPhone and gesturing at it. “I was tracking you.”…
Two months earlier, to make a point about questions Bhuiyan had asked about ride-share competitor Lyft, Mohrer had emailed her logs of some of her Uber trips. He had not asked for permission to access her data.
Uber has also begun using high-pressure tactics (a lot like those in the Comcast customer retention handbook) to bully riders into not deleting their Uber apps, since customers reacted to the privacy violation revelations with a higher defection rate.
Let’s see, what else… Oh, right! Uber mocks its customers. In addition to responding directly to an irate rider who complained about surge pricing of $360 to go 120 blocks during peak demand hours, CEO Travis Kalanick posted the complaint to Facebook with the comment “Get some popcorn and scroll down.” Kalanick’s response, by the way, included a rather patronizing explanation of the laws of supply and demand and how the high surge pricing prevented driver shortages and long wait times when things were busy. I’m quite familiar with the concept of surge pricing — it’s entirely legitimate — but an astronomical price of three dollars a city block is a bit hard to swallow. I’d gladly quit my job and walk for $3 a block.
You can also add the ride-sharing competition, along with drivers and passengers, to groups that Uber seems to hold in less than high regard. Uber hires contractors (which it calls “brand ambassadors”) to pose as passengers and attempt to recruit the drivers at Lyft and other competitors. Under this “SLOG” program, Lyft employees have also ordered and then cancelled over five thousand Lyft rides. Although an Uber flack denied that the company ever engaged in deliberately cancelling rides, they’re almost certainly lying. Lyft came up with the figure by cross-referencing the phone numbers the cancelled rides came from with those of riders who had attempted to recruit Uber drivers.
Kalanick snickered that Uber representatives personally approached Lyft investors and encouraged them to defect to Uber. As the author of the linked article said, companies probably try to sabotage each other’s funding all the time. But it’s highly unusual for a CEO to publicly crow about it.
As if all that weren’t bad enough, Uber takes an extremely adversarial view — to the point of plotting reprisals — of journalists who report unfavorably on it. Senior Vice President Emil Michael, in remarks at a swanky dinner party attended by Ariana Huffington and other celebrities, suggested digging up dirt on media critics. In particular, he suggested digging up information to prove a specific allegation about the personal life of Pando-based critic Sarah Lacy in order to publicly discredit her. This is especially disgusting, against the background of 8chan creeps engaged in similar attacks against Zoe Quinn and Anita Sarkeesian under the #GamerGate hashtag.
Michael subsequently said the remarks didn’t represent his own views or the policies of the company. Huh? This is the ultimate in meaningless corporate disclaimer culture. When the actually stated views of a company’s senior management are dismissed as not representing “the views of the company,” what exactly does that mean? That the fictitious corporate person known as Uber LLC has different views of its own, separate from the views of the people running it and making its policies? That the “views of the company” are whatever happens to be written in the Official Happy Talk of a policy manual somewhere?
Spokeswoman Nairi Hourdajian also said it was against Uber policy to use private location data to track the movement of journalists. You know — just like it doesn’t deliberately cancel rides. “Access to and use of data is permitted only for legitimate business purposes.” So I guess all those Uber bigwigs at that party were yukking it up over celebrities’ private location data were doing it for “legitimate business purposes.” The policy at the company where I work says it’s against company policy for management to engage in reprisals against employees who report official misconduct to the corporate ethics hotline; but then the misconduct itself was against company policy, wasn’t it?
It’s hard not to conclude that Uber’s corporate “code of ethics” consists entirely of sending a public spokesperson out to lie about the unethical stuff they do.
And although Uber in recent months has become a mainstream libertarian shibboleth alongside Bitcoin — I regularly get swarmed by right-wing trolls after tweeting critically about it — it’s even begun to alienate longtime right-libertarian supporters. But how could this be? Because the company is, in the words of Reason‘s Nick Gillespie, “bedding down with regulators to screw over competitors”: “After spending years antagonizing would-be regulators, Uber is now working with them to hammer out agreements that will let the company flourish even as less-connected competitors face tougher regulations.” Uber has hired former Obama adviser David Plouffe to negotiate regulations with local governments, and has said it “needs to be regulated.” The kind of needful regulations he has in mind, it goes without saying, are those that raise the cost of entry and make it harder for little guys to compete with Uber. A good example of the specific regulatory model they have in mind is the recent ride-sharing regulations passed by Washington, D.C. — which Uber and Plouffe have applauded — that includes $1 million in liability insurance and registering with the DC cab commission.
Still don’t hate Uber? It was also a platinum vendor sponsor of the Urban Shield police conference in Oakland. Urban Shield is an annual, DHS-funded training conference for militarized police.
As loathsome as Uber is, though, its liberal and “progressive” critics miss the point more than they hit it.
Critics of drivers operating outside the medallion licensing system, like Pando’s Paul Carr, point to the enormous percentage of stranger rapes that are perpetrated by unlicensed cab drivers. Carr treats the “laws and regulations” that Uber’s “sinister” culture of disruption seeks to bypass as a proxy for things like “public safety.” Apparently he’s never heard of the Bootleggers and Baptists phenomenon.
Carr also makes much of the overlap (at least in terms of rhetoric) between the “disruptive” ideology Uber’s management, Objectivism and “free markets.” For a supposedly hard-hitting “investigative reporter,” that’s a remarkable display of gullibility. As we’ve already seen and will see again, Uber’s talk about “free markets” and “disruption” is nothing but lip-service. They’ve disrupted the old medallion cab monopolies somewhat, and increased local competition at least to a certain extent, but they’re still a corporate monopoly in their own right that depends heavily on an anti-competitive legal structure to treat their workers like crap.
Getting back to the threat of rape by drivers, the licensed cab services really don’t perform any especially heroic levels of effort to prevent rape. Typical screening involves a simple driving history and criminal background check. The Whitmire outrage — in which a San Francisco passenger was assaulted by a driver with a violent criminal history and prison record — resulted, Carr argues, from the fact they used Hirease instead of the much more stringent Live Scan that involves a search of the FBI database. But Uber operates in most areas under background check regulations. If local regulations are so badly written as not to require the use of Live Scan, it’s rather perverse to treat Whitmire’s crime purely as an example of market failure rather than regulatory failure as well. Live Scan typically costs $70 or $80, so whether or not an unlicensed cab service uses them in particular for a background check is hardly a cost issue; and it doesn’t make much business sense, from a reputational standpoint, to use a less reliable and trustworthy background check service.
I suspect Carr is also conflating the new, semi-aboveground corporate ride-sharing services like Uber with the older, more informal kind of unlicensed cab services. If the typical unlicensed cab driver on the earlier jitney model is dangerous, it suggests that the very illegality of offering an unlicensed cab service suppresses the kinds of open advertising of a service’s standards and reputational tracking of drivers that would make them safer. It’s a lot like the slave-labor conditions that exist in sweatshop industries that hire undocumented immigrants, and the prevalence of rape, abuse and outright slavery in the sex trades — which exist, in both cases, because of the legal status of the workers and the suppression of above-ground informational and legal recourses for those who are vulnerable to the very law enforcement and civil law establishments that supposedly exist to “protect and serve” them.
I’m also surprised Carr hasn’t noticed the gap (at least four orders of magnitude) between the price of a Live Scan criminal background check and that of cab medallions in a typical big city. A local background check regulation simply requiring a Live Scan check would add $80 to the price of driving a cab. And in San Francisco, the $350 price of the driving permit itself, which includes both criminal background check and driving record, is completely separate from the $250,000 price of the medallion. The main point of the medallion licensing system isn’t safety, but limiting the number of competing cabs to the industry’s estimate of “what the market will bear” so they can gouge the public with a monopoly price. Anyone who says otherwise, or attempts to sugarcoat the system in goo-goo “public interest” rhetoric, is either stupid or a liar.
On the other hand, the purpose of a genuine sharing service is that the main item of capital equipment — a car and smart phone — is something the driver probably owns anyway. Between that and $80 for a background check, the overhead involved in participating in a real sharing network — i.e., an open-source system run by and for the drivers and passengers themselves — is virtually zero. An open-source e-hailing app, with whatever built-in system of driver reputational rating and background checks the users decide on, doesn’t require a corporate headquarters with highly paid suits in the C-suite and billions in venture capital.
I can’t resist pointing out the irony involved in a critique focused so heavily on Uber’s culture of misogyny and rape, coming from someone at a publication that employs a creepy pickup artist like Mark Ames, who reportedly confessed, under the pseudonym Johnny Chen, to date-raping and contemplating the murder of a teenager. Ames also allegedly confessed to threatening to murder a pregnant girlfriend if she didn’t get an abortion, and to bullying female eXiled staff into having unprotected anal sex. Who knows? If things don’t work out at Pando, maybe Ames can get a job driving for Uber.
Paul Carr, despite his preferred persona as a hard-bitten skeptical alternative journalist, takes the “free market” rhetoric of Uber’s defenders at face value.
…I was immediately inundated with @replies accusing me of being “anti-free market” and insisting that the only thing the government should do for technology companies is “get out of the way.” What was curious about those most loudly defending Kalanick — apart from the fact that they all were idiots — was that almost all of them directly or obliquely referenced the same author in their Twitter bio…
Ayn fucking Rand.
But anyone who either defends or attacks Uber as an example of the “free market” is a damfool. Uber and Lyft are not genuine sharing services. And they’re sure as hell not “free market” or “laissez-faire” operations, Reason‘s and Pando’s agreement to the contrary notwithstanding. The proprietary, walled-garden app they use to enforce the toll-gates between riders and drivers is every bit as much a state-enforced monopoly as the legacy taxicab industry’s medallions.
And portraying Uber’s legal action to prevent disclosure of its insurance policy as a “trade secret” as some kind of “free market” fundamentalism or “aversion to regulations” — as Carr does — is just plain stupid. “Intellectual property” is abhorrent to genuine free market principles — but state enforcement of trade secrets is especially so.
To say Uber is refighting the old fight of jitneys is also pretty stupid. Uber’s position is at least as close to the regulators as to the regulatees in that old fight. Jitneys were opportunities for unemployed people with used cars to subsist outside the wage system via low-overhead self-employment, and keep the full fruits of their own labor. Uber is a parasite that superimposes itself on genuine jitney services and charges drivers tribute for the right to operate.
Regardless of critics’ attempts to portray the legacy medallion cab companies as no longer a powerful monopoly because of the business they’ve lost to Uber and Lyft, no industry where the competition is limited to firms that can afford to buy a $300,000 license to operate is an “underdog.” Of course Uber isn’t an underdog either. It’s just made the monopoly structure a little bigger and a little shallower. But it is still a monopoly that uses vast monopoly powers to treat its workers and customers like garbage and skim off 20% of fares and make its senior management rich for nothing but the use of a smart phone app that could just as easily be free and open-source.
I argued six months ago that, even as Uber was unleashing creative destruction against the legacy taxicab industry, it in turn should be destroyed by a genuine open-source alternative. I echoed C4SS Director James Tuttle’s call to “hack the app, salt the service, fight the competition with better competition.” One possible action along those lines, among many, was suggested by a C4SS comrade on our email list who befriended the driver on an Uber trip: “I’ve got his number on my phone. Now we bypass Uber, call the guy and hear if he’s available to pick us up, and pay him cash.” This is something home care aides working for temp agencies do on a regular basis: cut out the middleman and make a deal directly with the customer that benefits both parties. Since, rather than being a genuine p2p service that empowers drivers and passengers to collaborate with each other, Uber has become a glorified temp agency that sets up a toll gate between driver and passenger, it should get the same treatment.
Today I repeat that call, but with far more urgency. The sooner Uber is destroyed by genuinely open-source, cooperative, free market and libertarian alternatives, the better. It’s time for Uber’s customers and drivers to destroy it from both inside and out. Its customers need to jailbreak it with an open-source app. Its drivers need to either violate their non-competition clause and go over to open-source alternatives, or organize independent union locals and go on strike inside from inside (which, as we saw in examples above, they’re already beginning to do).
Uber delenda est.