At the PolicyLink Equity Summit the last week of October, Orson Aguilar of the Greenlining Institute was taking a poll of the room at the workshop on the “Gig Economy.” How many people used Uber? Quite a lot of sheepish hands went up. How many AirBnB? More. Later we found out that not nearly so many of us shopped at Wal-Mart. Was it a class difference? Or a different awareness of business and labor practices?
The point of asking these questions was not to guilt trip anyone, but it did serve to point out (a) that there's a huge demand for these services and (b) there's a large customer base out there that doesn't necessarily yet understand the ways in which these “sharing economy” companies are acting in many ways as badly as Wal-Mart. Could these customers perhaps could be mobilized to support the workers working in them?
The session itself featured Derecka Mehrens of Working Partnerships USA, Dawn Gearhart of the Teamsters Local 117 in Seattle, which is helping Uber drivers to organize, and Seattle Councilman Mike O'Brien. Together they painted a picture of companies that despite their fancy tech trappings were basically going back to the bad old days of piece work payments and no labor protections whatsoever. (See below, or the Driving for Dignity campaign for more.)
I had trouble sleeping that night and got up around 1am to write a column for my local alt-weekly here in Albany, NY, about what I had learned at that session, since there has been a petition started by some business owners to bring Uber to this area. The day after I turned the column in, the paper was seized for back taxes and didn't publish an issue for the first time in 38 years—a victim of mismanagement, but also free ad-listing sites like Craigslist. A fitting demise for a column about a different “disruptive tech” innovation? Perhaps.
But I'm not one to let a hour of late-night writing go to waste, so I'm sharing what I wrote with you. I'm interested to hear from Shelterforce readers what the reaction is to Uber in your metro areas? Is there pushback? Are your constituents eager for the flexible jobs, or wary?
So Wal-Mart’s pretty bad, right? Most progressives can agree on that. Whether or not we actually succumb to shopping there, we know the drill: They pay minimum wage or barely above, don’t offer good benefits, union-bust, drive down working conditions for suppliers, promote sprawl. They could hardly be worse, right?
Imagine something with me:
What if Wal-Mart promised $35/hour, but some of its associates in Seattle at the end of the year realized after expenses they’d made more like $2 to 3, with others maybe $9–12?
What if instead of pressuring reluctant municipalities for zoning changes and building permits, Wal-Mart just started building without regard to the law, and told local government, “The people want us here, better change your laws.”
What if Wal-Mart didn’t invest any capital in its stores at all, but made its employees take out high-interest rate loans to purchase inventory and build the store—loans they are still on the hook for if they stop working there?
What if workers needed to provide their own liability insurance—though they might also be on the hook for fraud for using it for commercial purposes?
What if those workers were not covered by any labor standards or worker protection laws whatsoever?
What if every time Wal-Mart had a sale, the drop in prices came out of the worker’s checks instead of the store’s gross receipts—and the sale price was often made permanent?
Congratulations—you’ve just imagined UberX, the high-tech taxi alternative, and its ilk. (I refuse to call them “ridesharing.” There’s nothing sharing about it. It’s a business transaction.) Uber’s drivers are “independent contractors,” subject to absolutely no worker protections and given no training or insurance, fireable at will based on retaliatory ratings from sometimes-abusive customers (if your rating falls below 4.6 or so, you’re apparently toast), indentured to car loans that Dawn Gearhart of Teamsters Local 117 in Seattle says are often co-signed by Uber because drivers wouldn’t qualify otherwise, competing for fares to scrape by . . . all while making the company worth $52 billion.
There is a petition going around to bring Uber to the Capital Region right now, and let me say that as an occasional taxi user, I understand the desire. Our taxis leave something to be desired. Uber makes things easy and (usually) pleasant. No cash. No guessing who to call and whether one will be available. No smoky smells or strangers riding with you home from the train station.
But we have to understand what the economic model of the gig economy is—it’s a return to piecework. It’s old-fashioned worker exploitation and complete absence of responsibility on the part of the employers for the people who are making them stinking rich, in shiny new “app” clothing. The people who are organizing Uber drivers say most drivers are immigrants—often refugees—driving often 12-16 hours a day and sleeping in their cars. Many of them are also taxi drivers, driving for Uber in their off hours. (Remember that part about how sleep-deprived driving is as bad as drunk driving? That alone should give you serious pause.)
Here’s another story, as told by Seattle Councilman Mike O’Brien. In Seattle, a local taxi company owned by an Ethiopian immigrant created a ride-hailing app. They went to city council, which regulates every aspect of the taxi industry, and were told no, it was illegal. Not having the resources to fight city hall, they set it aside. A few years later, Uber shows up and starts brazenly operating illegally. City council rolls over.
I hope New York's Capital Region doesn’t roll over—not that it is inflexible about innovation in the world of taxi services, mind you. Something needs to give. But that it doesn’t let itself be bullied by a company whose business model is to completely flout local governments’ legitimate concerns about the safety and decency of their operations and to treat its workers like they are disposable and worthless.
I would hope to see something instead like a driver-owned co-op with its own app that improves our transportation options while operating responsibly and generating safe, living-wage jobs and keeping the profits circulating in the community. But if Uber does come here, I hope that their customers at least rise up to support their drivers in organizing for collective bargaining rights.
The gig economy is not something new and outside the world of exploitative capitalism just because it comes with an app. The people who work in it are workers, and their working conditions matter just as much as the working conditions of any other worker.
(Photo credit: Via Tsuji, via flickr, CC BY-NC-ND 2.0)
Anyone complaining about Uber really needs to consider, seriously, the PURPOSE of a taxi company.
Or a restaurant.
Or a retailer.
Or a bookstore.
Or an electronics company.
Or any business at all.
The purpose of any business is to provide a good or service to people who need it and will pay for it. That is the purpose of the business.
NOT to provide employment.
The purpose of an individual transportation company, a taxi company, is to answer the need for people to be transported from Point A to Point B.
Historically, that has been done by assembling a fleet of moderately priced vehicles, and a fleet of extravagantly expensive government permits. This ensures that, either by responding to calls, or by cruising well traveled parts of the city, the transport providers can respond to the need for transportation in a way that efficiently responds to the need of the market.
Anyone who’s spent much time on a taxi knows this system also has its shortcomings, preposterous fares, slow responses to calls, rude cabbies, smelly, filthy cabs… We all know that part of the story too.
But that was the only real way to do it efficiently on a large enough scale for a major metro area.
We needed that big yellow behemoth crawling our streets.
Not any more.
The age of mobile internet access and apps has made it possible for travelers to buy the same service, individual transportation, without having to ALSO pay for the massive infrastructure, physical, administrative and bureaucratic, of a taxi company, an infrastructure that today has nothing to do with the need of those travelers.
That may sound like a raw deal for those who have long made a buck exploiting that physical, administrative and bureaucratic infrastructure, but it’s not ABOUT them.
It’s about the people who need to get from Point A to Point B in an efficient and economical way.
Complaining about this breakthrough is like Waldenbooks complaining about Amazon.
Or a cross country stagecoach provider complaining about the airlines.
While we’re at it, anyone want to object to ATMs?
Miriam, I think you missed something here when you referred to the expenses argument. Whether you work at a Walmart store or its corporate headquarters, or any other employer for that matter, we all have expenses that come out of our paychecks, albeit after we receive the checks. And, for the overwhelming majority of employees across the U.S. a big part of those expenses include a car and everything that entails. So, what you fail to consider here is that while a Walmart employee might be bringing home $8-9 per hour (before taxes), if they are forced to own a car to be able to work, their real wages are somewhere around $5-6 per hour. An Uber driver may not be raking in the cash they were led to believe, but if they are making money off of a depreciating asset that others are not, we can’t consider it a total loss.
This is not to say that drivers shouldn’t have more rights as you suggest, but comparing Uber/Lyft/etc. to Walmart is lazy. Besides, if being a ride-hailing driver is the doom-and-gloom story you’re portraying here, then why are so many drivers celebrating when a municipality welcomes them into their city?
Chris T: So can I take you to mean that you think that no jobs should have any worker protections on them? That restaurants, retailers, etc. should not actually have limits on hours worked, minimum wages, safety standards, etc? The 1890s called, they are missing you.
Chris L: The $2-3/hour that I quoted was after taxes, that took depreciation into account. I don’t think I see car commuting costs (many people do actually not own cars also, by the way) is equivalent to the cost of driving a car 12 hours/day? It’s true that drivers might have lower commuting costs that some other folks, but that’s going to be very small in comparison. I think the analogy to having to put your own capital in as you don’t in most other low-wage jobs holds.
Also, according to the organizers, many Uber drivers are being pushed to take out loans for new cars they couldn’t otherwise afford (customers don’t want to ride in a clunker that would be fine for commuting after all), so again, your comparison to having a car already is not really relevant.
As for why people are excited—(1) there are several people for every job opening and people are desperate for work, even crappy work and (2) they are misled about how much they can expect to net and what the working conditions are. Please do follow the links to the Driving for Dignity site to see the stories of some of the drivers.
You are on the wrong side of history, Miriam. You write as though there is a wonderful alternative to uber out there, but there isn’t. Some industries die when new technology revolutionizes them and they do not or cannot upgrade. I believe the standard taxi service is so appalling compared to uber or lyft that it completely deserves to be put out of business. It was a monopoly that raced to the bottom.
To use your analogy, imagine a wal-mart that you had to call to see if they were open, that was open only when they felt like it, that had different but equally crappy stores, that told you on the phone they were sending someone to open the store but wouldn’t tell you when exactly and you basically had no idea when or if they were coming. Also, there was no simple way to give feedback on their performance that had instant repercussions, nor was the store allowed to rate you as a customer. Who would prefer that store over one that shows up every time within five minutes, you can see exactly where they are on their way, they are friendly and delighted to see you, they talk about how much they love working there, and you both get to rate each other after the shopping experience. Also -it’s cheaper! And don’t get me started on the corruption that is the NYC medallion system.
I uber and lyft every chance I get, and I always engage drivers in convo about whether they like it, how it works, etc. Only good stories so far. Long live uber!
PS I love that uber just opens shop wherever they want to. Our legacy cities are so crushingly bureaucratic and corrupt, we need ways allow technology to get people the services and jobs that are part of the new economy. Sure we should pressure new technology jobs to take care of their workers, but it is foolish to try to shut down a whole new technology until they are perfect. And it will not work. I think our community economic development programs should start training people to take advantage of the gig economy instead of training for jobs that offer zero flexibility and/or no longer exist.
Oh Marcia, I fully believe that services that operate like Uber and Lyft are the future of taxi services, believe me! The user experience (except, you know, for people who can’t access it because they fight disability access tooth and nail) tends to be great.
But my point was they can, and should, be made to do business in a non-exploitative fashion that respects their workers. And I don’t actually believe there’s anything to stop a socially responsible alternative (note that in Seattle there would have been an alternative if it hadn’t been shut down), especially if we didn’t give the bad actors unfair advantages.
What our legacy cities don’t need is another massive corporation siphoning off outrageous profits somewhere else instead of properly sharing the wealth with the people who actually generate it.
(And if they were only ignoring some stupid rule just designed to protect a taxi-cab monopoly, ok, I could kind of see your point. But they are also rebelling against cities that try to, oh say, require that their cars have safety inspections and insurance, like San Antonio. I’m not actually ok with that.)
Finally, with the rating system so strict, I’d be skeptical of what drivers feel ok saying on the clock, though I’m sure there are some who are making it work well for themselves.
Miriam, I really do encourage you to get out there and uber and lyft in a few cities and talk to the drivers. Their viewpoints on this stuff are so outside my day-to-day life (in large part because they tend to be a lot younger than I and more tech savvy), I walk away marveling and delighted each time. And don’t forget -they rate me every time, too. I live that.
Miriam, thank you for this article. It clearly outlines many of the points that I knew by instinct about Uber and other such companies, but couldn’t put into writing myself. While I have many issues with cab companies, they at least play by the rules. Rules are never fun – wouldn’t it be nice if we didn’t have to pay taxes, if I didn’t have to pay my employees overtime, if I could work unlimited hours? But centuries of abusive work practices have taught us that these rules, while not perfect, are what make us a productive and fair society.
I find that progressives generally come from a good place, but are often led off track by shiny objects and flashy fads. I think Uber is one of those. As an Oakland resident, where Uber is now moving their headquarters, I’m not only worried about the impact on worker rights, but also other aspects of our local economy that could lead to greater disparities among Oakland residents.