Uber’s history isn’t a great one: a sexist workplace culture, evasion of regulations (and regulators), and denial of fair pay, benefits, and rights to workers. But in 2017, the company’s top brass promised it would change. Travis Kalanick was replaced as CEO by Dara Khosrowshahi with a pledge to clean up the culture, be more open with cities, and do right by the drivers, without whom there is no Uber.
But two years later, it’s abundantly clear those promises were little more than a public relations stunt to bring an end to the #DeleteUber campaign that caused hundreds of thousands of users to delete the app and deactivate their accounts. Jurisdictions are moving forward with regulations that would finally grant drivers the rights they’ve so long been denied, forcing Uber’s mask off once again.
California’s passage of Assembly Bill 5 (AB-5) would effectively force Uber and its many “gig economy” imitators to recognize their workers as employees and, unsurprisingly, they’re doing everything they can stop it. It’s time to bring back the #DeleteUber campaign for good this time — and expand it to Lyft, DoorDash, and all the rest.
Uber Is a Terrible Company
Much of the criticism of Uber revolves around the treatment of its workers — and for good reason; it’s horrible. But the extent of its negative social impacts is far greater than most people often realize. It would take a book to draw them out in the detail they deserve, and luckily Mike Isaac’s recently released Super Pumped does just that. It’s worth highlighting some of the worst actions exposed in its pages.
Uber’s workplace practices were fueled by an abusive culture that came from the very top, and it ensured that men in positions of power within the company didn’t face consequences for their actions. Isaac describes how Kalanick wanted to avoid feeling like a big company, and that meant the human resources department did little more than recruit new employees, including using an algorithm to determine “the lowest possible salary a candidate might accept.”
Sexism was rampant within the company, and when women made complaints, they were told it was the perpetrator’s first offence, no action would be taken against them, and the women were offered to find new positions within the company. They later discovered a pattern of sexist behavior by certain managers, and Susan Fowler’s explosive public letter helped put the nail in Kalanick’s coffin.
That was just one group of people hurt by Kalanick’s pursuit of growth at all costs. Some were much more severe. The story of a woman who was raped by an Uber driver in India in 2014 went viral in 2017 after she discovered the company obtained her medical records to try to discredit her. But the suit was part of a systemic problem. Uber made it incredibly easy for drivers to sign up — its background checks are still seen to be inadequate — and that meant people who would’ve been excluded from driving taxis were giving rides on Uber, leading to thousands of cases of sexual assault and harassment.
But the company didn’t feel empathy for these victims. Instead, Isaac writes, “Kalanick felt it was Uber that was being prosecuted” when a new accusation was made against a driver, and whenever a case was dropped “a round of cheers would ring out across the fifth floor of Uber HQ.”
This horrible disregard for human life went even further. As Uber started cutting into the business of taxi drivers in Mexico, people responded by beating, robbing, and eventually murdering Uber drivers. Things were even worse in Brazil. Uber entered in the midst of all-time high unemployment in 2015, allowed people to pay in cash because credit cards weren’t common, and made it so easy for drivers to sign up they only had to provide an email address or a phone number. Uber drivers were then targeted by thieves and taxi cartels, and at least sixteen drivers were murdered before headquarters finally decided to do something about it.
The executive team’s indifference to the suffering of their workers, both at its various global headquarters and in vehicles around the world, is a fundamental part of the company’s DNA. Kalanick, an Ayn Rand-loving libertarian, didn’t just want to win at any cost. Isaac explains his evasion of regulations that applied to other companies also had a strategic goal: deregulation.
Corrupt to the Core
Uber is not just about providing “transportation as reliable as running water,” as Kalanick would describe it, or being the “operating system for your everyday life,” as Khosrowshahi repositioned the company at the end of September. It’s also about using its “tech” branding to raise massive amounts of capital — so much that it could lose $5.2 billion just in the last quarter — to engage in a form of predatory pricing to drive traditional transport operators out of business and force regulators to remake existing laws in its favor. That fight is finally coming to a head.
It’s clear that Kalanick’s ouster did not result in a significant change in Uber’s business practices, in large part because the ouster was not really because of the company’s terrible culture, but rather because the revelations threatened the plan for a public offering that would make early investors incredibly rich.
Even as the company has raised prices, drivers have not benefited, and new reporting suggests Uber and Lyft take a higher share of the fare than they publicly admit. Cities are also fed up with broken promises. Even though Uber promoted its service as reducing congestion, the research is now pretty conclusive that ride-hailing services increase congestion, reduce transit ridership (in part because they make bus services less reliable), and have a negligible effect on car ownership. In August, Uber and Lyft even admitted they were responsible for a significant share of traffic in some major cities — almost 13 percent in San Francisco.
New York City was first to challenge the ride-hail business model. The city set a minimum pay rate of $17.22 an hour after expenses, capped the number of ride-hailing drivers, and limited the amount of time drivers can spend without a passenger in the vehicle. Uber and Lyft have tried to sue to overturn those rules but have so far failed. Seattle may soon follow suit with its own minimum wage.
But the real challenge to Uber’s deregulated business model is coming from California. On September 18, California Gov. Gavin Newsom signed AB-5 into law. The bill, which codifies the Dynamex decision by the California Supreme Court, will make a worker an employee “if his or her job forms part of a company’s core business, if the bosses direct the way the work is done or if the worker has not established an independent trade or business.”
In short, when the new rules come into effect on January 1, 2020, many independent contractors, including those in the gig economy, will have to be reclassified as employees — but tech companies are refusing to accept the decision.
Uber and Lyft have brazenly stated the new rules don’t apply to them, because drivers are not part of the “usual course” of business. Instead, they argue they provide digital marketplaces and are not employers of drivers, but it’s hard to see how Uber is anything without drivers. Kalanick’s dream of automating them has failed to be realized.
The company’s argument is little more than a delaying tactic. It likely knows it won’t stand up in court, but fighting it gives them precious time not just to delay the costs associated with making contractors employees, but also to try to overturn the new rules. Uber, Lyft, and DoorDash have already pledged $90 million to fund a ballot initiative to repeal AB-5. What they want instead is a third labor classification that would provide some additional benefits above contractor status, but not nearly as many rights as an employee has.
But it’s important to go back to the core of the company and the libertarian deregulatory ethos imbued in it by Kalanick. The push for a third classification by gig-economy companies is nothing more than the latest effort by the capitalist class to roll back the rights that working people have fought for and won since the nineteenth century, and for that reason it must be opposed at every step: in the courts, at the polls, and in the streets. While some are fooled into believing that Uber is significantly different because it uses an app, we’ll look back on its arguments with the same odd fascination as when reading about how coal companies tried to convince regulators that miners were independent contractors, not employees.
It’s Time to #DeleteUber for Good
What is the proper response to Uber, given its clear disregard for its users, drivers, and the cities in which it operates? A section of the Left argues it should be turned into a cooperative; instead of Silicon Valley narcissists making decisions, workers would be in control. It’s an appealing argument, but I remain skeptical that a company so fundamentally flawed can be effectively made right by changing its ownership and decision-making structure.
Instead, the #DeleteUber campaign must be resurrected. Uber has had two years to change its ways, and it’s clear it has not. It’s still at war with its workers, denying them hard-fought rights and fair pay in order to enrich the investors that bankrolled its deregulatory effort, and it will fight change to the very end. Companies like Uber, Lyft, and DoorDash must be put out of business, not converted to worker cooperatives. They have nothing to offer but a fundamentally flawed corporate structure that a democratically controlled alternative would be smart to avoid.
That doesn’t mean shouldn’t be worker cooperatives in ride-hailing and delivery; it just means they shouldn’t take on the burden of reforming broken organizational structures. In the United Kingdom, Dan Hind has proposed the creation of a British Digital Cooperative that would essentially be a BBC for the twenty-first century, tasked with creating public platforms, software, and digital resources with effective democratic oversight and a mission to partner with local communities across the country.
The creation of a public, democratically controlled alternative to Uber would be a far better option than taking over the existing platform. It could give communities decision-making power over how it should work in their jurisdictions, while federating into a single application for a convenient user experience. Paired with effective regulation on pay, driver numbers, and punitive measures to rein in private alternatives, a worker cooperative could replace Uber without having to deal with all of its baggage and the deregulatory ethos on which it was founded. However, it would also have to accept that it would deliver far fewer rides, and be part of a larger infrastructure seeking to funnel more people in transit, cycling, and more efficient means of getting around the city — something private alternatives will never accept.
Uber is rotten to its core, has not been reformed in the two years since Kalanick’s departure, and even changing ownership structures won’t fully cleanse it of its past. Instead of allowing it to keep pushing for the repeal of labor rights, it should be abolished. Parts of its tech can be reformulated and improved as part of a democratically controlled alternative, as long as it’s paired with strict regulation to ensure cities aren’t still flooded with cars. But Uber itself must die.