The ridesharing craze is sweeping the world. Now, there is an existential threat to taxi drivers as we know them. It’s time to see what makes Uber tick. Ridesharing is sweeping the world, fast becoming a solid alternative to traditional taxis. For the first time, an app on your smartphone can hail a price-quoted ride to anywhere in your city straight to your doorstep, and let you customise your vehicle and make payment before you even hop in. Technology has allowed the ridesharing industry to condense convoluted taxi dispatch centres into a series of digital algorithms you can access from your pocket. At the top of this game right now is Uber.
On the surface, Uber looks like the taxi app we’ve always wanted. It makes trip bookings cashless, fast and tells you exactly where your ride is while you wait. You get price quotes! You can choose how classy the car is! It’s the future!
The problem is the company behind it. Since its founding in 2009, Uber has spread to over 200 cities globally. Where it has run into problems with regulators, the $40 billion company has faced allegations of exploiting tenuous loopholes and pampered locals in an attempt to convince authorities to compromise. It’s been banned in several countries for its blatant disregard for the concept of the ‘licensed cab driver’.
In October 2012, Uber flagrantly defied New York’s Taxi and Limousine Commission (TLC) by launching its service before the legal difficulties surrounding ridesharing apps could be sorted out. To circumvent the local payment regulations, and perhaps also for good PR, Uber gave out rides for free. The TLC threatened to fine Uber’s drivers in response.
Despite positive reviews, the New York service ran for a month before shutting down. Drivers were recalled to HQ to receive a “cash bonus,” only to have their company-issued iPhones taken back, and asked to stop picking up for Uber. CEO Travis Kalanick passive-aggressively suggested that New York fans “try Uber Taxi in more innovation-friendly cities.”
Legally, an Uber driver is actually an independent contractor. This allows Uber to outsource costs to the driver, reduce taxes and easily absolve itself of responsibility for accidents or fines (“we’re just a platform”). To Uber, cabbies are disposable, even more so than with regular taxi companies. And they haven’t even started using self-driving cars yet.
Over the last 2 years, Uber has been incessantly targeted by organised labour, representing both conventional cabbies and its own drivers. During the 2013 Uber strikes in the US, Uber drivers highlighted such practices as manipulation of driver numbers to boost profits from surge pricing, forcing SUV drivers to accept sedan rates; arbitrarily declaring certain car models “too old”; and an unreasonable suspension policy.
Uber’s disruption spree frequently reaches comical proportions. One ad campaign in Lyon, France offered to pair customers with “hot chick” drivers. Then there were the ‘ridesharing wars,’ in which Uber and rival Lyft tried to steal each other’s passengers by ordering and cancelling rides en masse.
Finally, there’s CEO Kalanick, who on bad days claims to “look at our revenue graph,” and calls the company “Boober” because he’s apparently a chick-magnet now. Most of the world explains away Kalanick’s quirkiness as a tormented expression of genius, but more likely, Kalanick is an edge case for a cult of disruption endemic to Silicon Valley. Absolute, unregulated freedom to disrupt and an innovate-first-apologise-later mentality are core to Silicon Valley’s recent advances on real-world industries like real estate (Airbnb), part-time labour (Airtasker) and genetic testing (23andme).
The Uber juggernaut has only recently set up shop in Australia, but already there are cracks in the facade. Last May, the Victorian Taxi Services Commission began fining unlicensed Uber cab drivers, some of which did not receive the legal support that Uber had promised them. On the day the drivers were set to appear in court, Uber launched its kitten promotion, offering 15 minutes with a kitten on their rides. During the Sydney shootings, Uber’s surge pricing algorithms quadrupled the price of rides out of the city, and were reconfigured only after a social media backlash.
The Uber story is an indictment on privatisation in our transport systems. Uber has cleverly shaped the debate surrounding its aggressive expansion as a David-and-Goliath struggle, but the fact remains that the market has failed to deliver an option that simply allows taxi drivers to drive people around without busting their wallets to a Silicon Valley objectivist or a dug-in taxi mafia.
Why do we consider it strange for a cabbie to earn a guaranteed wage off their job without being beholden to some 3rd party that won’t even train them? And why, in every city, did the taxi regulators choose to go after drivers instead of Uber? Uber is fond of calling itself the solution. But for cabbies and us customers, it’s really nothing more than an unfortunate symptom.