On the eve of Uber’s initial public offering (IPO) on Wall Street, Uber workers around the world are logging off the app and going on strike. The strike was initially called for by the Los Angeles-based drivers’ union Rideshare Drivers United (RDU) to protest Uber’s recent 25 percent pay rate cuts. Uber unilaterally implemented these cuts prior to this week’s IPO in an effort to boost its value.
Some speculate that their IPO valuation will be worth nearly $100 billion. A small handful of people in Silicon Valley will make billions from cutting workers’ wages and “disrupting” an industry by refusing to follow local laws. In this regard, today’s strike is not just a strike against Uber, but a strike against cities which allow the radical privatization and deregulation of critical city infrastructure. It’s not just a “sharing economy” strike — it’s a strike for the right to the city.
Cities across the country and world have passively accepted Uber’s illegal business model. Classifying drivers as independent contractors allows Uber to avoid labor protections such as minimum wage, overtime, unemployment compensation, and the right to form a union. If Uber is allowed to “go employee-free” why wouldn’t every company in America attempt to do the same?
As RDU organizer and assistant professor of communication at California State University, San Marcos, Brian Dolber stated, “The lack of attention to the transformation of the definition of employment will be to the detriment of all workers across the United States. We can’t let tech eviscerate the accomplishments of the labor movement.” Today’s strike, by supposedly “unorganizable” and isolated workers, hold important lessons for labor in evaluating how to respond to gig work and the rising service economy generally.
Over the last decade, the growth of the gig economy has been massive. The size of Uber’s workforce doubled every six months from 2012 to 2015. Despite this growth, many have cautioned against letting the gig economy upend our understanding of work as it is still only a small portion of the workforce — 1 percent according to the US Department of Labor. Yet today’s strike highlights why we must pay attention.
First, Uber’s employee-free independent contractor model is poised to have larger ripple effects across the entire economy. One only needs to look at the incorporation of gig-style work at Amazon and Walmart to find early signs of this. Second, Uber’s misclassification of workers was only successful because cities bought into their tech futurism narrative. Third, gig workers are winning real victories through innovative models of organizing that exist outside the dominant National Labor Relations Board paradigm.
While Uber’s misclassification is extreme, it is also the logical conclusion of the contracting and outsourcing epidemic workers have faced since the 1970s, a manifestation of what David Weil calls the “fissured workplace.” Weil argues that technological advances in the 1980s made outsourcing and subcontracting vastly more affordable. As a result, companies’ wage decisions became contracting decisions, separating workers from the site of profit generation. Uber, through smartphone technology, has taken this to the logical extreme, outsourcing work to each individual driver.
The employee-free business model has many benefits for Uber. It also generates new problems. In particular, to maintain their legal fiction of not actually being drivers’ employer, Uber cannot direct drivers on when, where, or how to drive. To combat this problem Uber developed, what Alex Rosenblat calls “algorithmic management.”
Algorithmic management, including the important star rating system, employs data tracking of drivers to generate a system of sophisticated push notifications which “nudge” drivers on how to “improve.” Surge pricing nudges drivers where to go, the rating system nudges drivers on how to behave, and push notifications nudge drivers to keep working. If drivers don’t maintain a high star rating, they can wake up one morning to find out they have been kicked off the app.
This obviously opens the door to arbitrary, racist, or sexist customers sending a driver’s livelihood into a tailspin at the click of a button. As Uber striker and NYTWA member Sonam Lama said, “I have less ratings issues because my English is better than other drivers. My friends, who can’t speak English as well, get impacted. And often it is because Uber changed some policy on the customers that the driver can’t explain.” Lama explained that it can take days or weeks to get back on the app after multiple trips to the Uber office, and even then some drivers never get back on.
When Uber launched in new cities across the country, it often did so illegally. Allowing Uber in our cities has effectively privatized important transportation, environmental, and regulatory responsibilities of the city. Taxis used to be, and should continue to be, viewed as public utilities that fill important gaps in a city’s public transportation system. When Uber entered major American cities, they exploited this fact, correctly wagering that municipal governments cannot make sound policy and regulatory actions at the pace that consumers can install an app.
In my survey of the eighty largest US cities, only nineteen had strong regulatory or enforcement responses to Uber’s illegal entry. Over half took weak or no response. When some cities, like Austin, tried to take action, Uber had their local actions preempted by conservative state governments passing preemption bills with dubious ALEC connections.
The impact of city refusal to regulate Uber can be stark. Uber drivers lured by illegally deceptive promises of financial windfall saw their wages fall 53 percent from 2013 to 2017. As striker Varinder Kumar explained, “I switched from a yellow cab to Uber because I thought the medallion owners were taking advantage of us. Uber said I’d have my own car and flexibility. After a year, they cut prices and there were too many drivers. Suddenly, I was making less money but now with all the car debt.”
Beyond its impact on workers, Uber has made our cities worse places to live. The company has decreased urban public transit usage and even produced a sharp rise in US traffic deaths. And Uber has vastly increased congestion. Last year in NYC, rideshare companies added 85,000 cars per month completing 700,000 trips a day to the city’s streets. If we assume an average of five miles per trip, using EPA metrics, then rideshare companies added 516,110 metric tons of CO2 to NYC’s air — the equivalent pollution of 406,066 flights from NYC to San Francisco.
Of course, no one in New York City has seen their livelihoods changed more by the introduction of Uber than the city’s traditional taxi drivers. While the city’s taxi medallion system, which caps the number of taxis in the city, is much-maligned, the system was actually instituted during the Great Depression to address an illegal mob run taxi industry — causing the same worker, traffic, pollution, and safety issues that Uber has thrust back upon the city.
The system, instituted by Mayor LaGuardia, reserved 40 percent of medallions for individual drivers. The yellow cab drivers, who own these individual medallions today, have seen the value of their lives’ work and investment fall by hundreds of thousands of dollars. This leaves the drivers underwater as they still owe the banks the original amount.
In my analysis of a survey of seventy-five NYTWA owner-drivers, I found the average monthly medallion mortgage was $2,620 with the average amount still owed at $438,438. Those who had taken out credit card debt to make medallion payments now have an average of $37,322 in credit card debt as well. Evaluating city data, 836 drivers lost their medallions to foreclosure last year. Faced with this burden and declining fares due to the flood of Uber cars on the road, nine drivers have taken their own lives.
Despite this bleak picture, workers and their unions have begun to push cities into action. Today’s strike follows a strike by RDU last month in Los Angeles, just before Lyft’s IPO. According to RDU, in the month since their organization has gained 1,500 number members, bringing their ranks to 4,300. After the strike, drivers met with Governor Newsom to discuss an initiative to make the recent Dynamex decision in California state law, ensuring drivers are considered employees.
It’s not just California and New York drivers taking action. In a survey of large US cities, I found that half experienced rideshare or taxi driver protests against the impact of gig companies. Furthermore, worker protests had a statistically significant impact on whether cities took regulatory action. Even tech-friendly San Francisco sued California’s preemption demanding the right to regulate Uber.
The strongest resistance to Uber has been waged by the New York Taxi Workers Alliance. The NYTWA alliance represents 21,000 drivers in NYC, of which ten thousand are app drivers. Instead of hunkering down with their base of yellow cab drivers, NYTWA embraced the old labor notion that an injury to one is an injury to all and welcomed Uber and Lyft drivers to their ranks. This prevented Uber from playing these two groups against each other and undermined the Uber-funded Independent Driver Guild. Last August, the NYTWA successfully pushed the city to adopt a cap on new app vehicles and ensure app drivers are paid a minimum wage.
The NYTWA has accomplished all these victories despite lacking formal collective bargaining rights under the National Labor Relations Act. Unlike most US unions, which operate based on the NLRA principle of exclusive representation, the NYTWA operates more like French unions on a principle of “minority unionism.” This model requires far more constant member engagement, organizing, and direct action to fuel the organizations success.
Further borrowing from European labor movements, the NYTWA and the new RDU have adopted a strategy of aggressively pressuring not just their employers but also their governments to take action. As the place-based and often fragmented service economy becomes the dominant employer in US cities, it becomes increasingly hard to force the industrial-style unionism of yore onto these industries.
By forcing cities to recognize their responsibility in allowing poverty to perpetuate, these unions have essentially created European tripartite bargaining mediated by the state. They have done this for workers who technically lack bargaining rights. This bargaining model, which NYTWA established at the turn of the twenty-first century, is being replicated by other unions in New York such as SEIU 32BJ’s organizing at NYC’s airports and the Fight for $15’s creation of the NY Fast Food Wage Board.
The Uber IPO strikes highlight a sleeping crisis for municipal governance. We want technological change, but cities have embraced this vision blindly ignoring the human, environmental, and legal costs companies like Uber bring to our cities. As David Harvey notes, “The question of what kind of city we want cannot be divorced from that of what kind of social ties, relationship to nature, lifestyles, technologies, and aesthetic values we desire. The right to the city is far more than the individual liberty to access urban resources: it is a right to change ourselves by changing the city.”
The Uber IPO is a wake-up call to cities and labor. The NYTWA and RDU organizing model points a way forward for a new municipal unionism based on the right to the city.