By the time Uber and Lyft breached the levees of transport regulations, the American taxi system had already endured several waves of uneven deregulation. In the 1960s, in New York, the majority of taxi drivers formed a union with the aid of the mayor, Robert Wagner. Negotiations produced results: cabbies received a weekly paycheck, vacations, benefits, and a degree of job security. It was already standard for cab companies to insure their drivers, maintain their fleet, and check their drivers’ histories. Although they were private entities, cab companies were subject to heavy control because they were a public utility, a form of municipal transportation. As deregulation became the norm in the ’70s and ’80s, the US experimented with taxi deregulation, too. Cities like San Diego, Seattle, and Dallas increased the number of licenses, bringing thousands more taxis onto the streets. New York’s Taxi and Limousine Commission reclassified drivers as independent contractors, which made the job harder and put an end to the union. More and more drivers went full-time, chiefly to ensure they could pay off the leasing fees. Conditions deteriorated throughout ’90s as pay failed to keep up with expenses. The National Taxi Workers Alliance was founded in 1998 to give an increasingly diverse workforce a voice in a complex and punishing industry. When they launched successful strikes against low fares and harsh fines against drivers, it seemed like the industry might turn a corner.
Then came Uber and Lyft, under cover of app-enabled darkness, to induce more drastic deregulation. By 2015, the taxi industry in Chicago — a sprawling city with a smaller fleet than New York’s, where ride-sharing was poised to do best — reported that they had lost somewhere between 30 to 40 percent of their business to ride-sharing apps.
Uber and Lyft claimed their success was due to better software, better algorithms, and better responsiveness, but their overwhelming advantage came from breaking the law. They flooded streets with unlicensed cars acting as taxis, first in San Francisco and then in cities everywhere, because they thought nobody would stop them. Fare prices, set by the city to be equitable and predictable for taxis, were put entirely out of city control and made subject to whatever the companies considered demand: low on lazy Saturday afternoons, high on Saturday nights, and even higher after events like terrorist attacks. Taxi fares and tips were unreliable in their own way, but drivers faced a new level of capriciousness when ride-sharing companies began to set the fares. Fare prices not only changed throughout the day; the wage floor could be slashed at the whim of the company with little or no notice to drivers. This was viable because unlike the taxi industry, Uber and Lyft swim Scrooge McDuck–like through piles of venture capital. They don’t have to rely on fares as their only source of revenue.
Uber has also lied to drivers about how much they can make. As late as 2015, the company claimed that drivers could earn $90,000 a year working for them. In an exposé for the Philadelphia City Paper, reporter Emily Guendelsberger worked as an UberX driver and found this to be far from the truth. “If I worked 10 hours a day, six days a week with one week off, I’d net almost $30,000 a year before taxes,” she wrote. “But if I wanted to net that $90,000-a-year figure that so many passengers asked about, I would only have to work, let’s see . . . 27 hours a day, 365 days a year.” That doesn’t include the money required to maintain and insure the car. Thanks to financing from Goldman Sachs, Uber offers its drivers predatory “deep subprime” loans to acquire their cars, which drivers then have to work extra hours to service. (...)
Then came Uber and Lyft, under cover of app-enabled darkness, to induce more drastic deregulation. By 2015, the taxi industry in Chicago — a sprawling city with a smaller fleet than New York’s, where ride-sharing was poised to do best — reported that they had lost somewhere between 30 to 40 percent of their business to ride-sharing apps.Uber and Lyft claimed their success was due to better software, better algorithms, and better responsiveness, but their overwhelming advantage came from breaking the law. They flooded streets with unlicensed cars acting as taxis, first in San Francisco and then in cities everywhere, because they thought nobody would stop them. Fare prices, set by the city to be equitable and predictable for taxis, were put entirely out of city control and made subject to whatever the companies considered demand: low on lazy Saturday afternoons, high on Saturday nights, and even higher after events like terrorist attacks. Taxi fares and tips were unreliable in their own way, but drivers faced a new level of capriciousness when ride-sharing companies began to set the fares. Fare prices not only changed throughout the day; the wage floor could be slashed at the whim of the company with little or no notice to drivers. This was viable because unlike the taxi industry, Uber and Lyft swim Scrooge McDuck–like through piles of venture capital. They don’t have to rely on fares as their only source of revenue.
Uber has also lied to drivers about how much they can make. As late as 2015, the company claimed that drivers could earn $90,000 a year working for them. In an exposé for the Philadelphia City Paper, reporter Emily Guendelsberger worked as an UberX driver and found this to be far from the truth. “If I worked 10 hours a day, six days a week with one week off, I’d net almost $30,000 a year before taxes,” she wrote. “But if I wanted to net that $90,000-a-year figure that so many passengers asked about, I would only have to work, let’s see . . . 27 hours a day, 365 days a year.” That doesn’t include the money required to maintain and insure the car. Thanks to financing from Goldman Sachs, Uber offers its drivers predatory “deep subprime” loans to acquire their cars, which drivers then have to work extra hours to service. (...)
Philadelphia was one of the last cities in Pennsylvania to permit Uber and Lyft. As a kind of trial run, ride-sharing services were made temporarily legal in the city just in time for last summer’s Democratic National Convention. All the convention materials advertised its presence. The first night’s party, hosted by the company, was picketed by taxi workers. Hundreds of Democrats walked past them.
Once Uber and Lyft were legalized in a city, it became impossible to hold them to existing regulations. When the companies refused to submit to driver-fingerprinting laws in Austin, the city put the requirement to a referendum and voters booted ride-sharing out of town. But in 2017, the Texas legislature overruled the city’s voters. The fingerprinting requirements were lifted, and Texans were left with no choice but to accept ride-sharing. The companies are believed to have spent $2.3 million on lobbying Texas lawmakers this year alone.
In their antiregulatory crusade, Uber and Lyft have fostered a divided society, pitting one kind of worker against another, one kind of user against another. The largest group of Uber drivers is white (40 percent), with black non-Hispanics the second largest (19.5 percent); the largest group of taxi drivers is black (over 30 percent), with white drivers in second (26 percent). Most Uber drivers are younger and have college experience, and many have degrees; most taxi drivers are older, married, and have never been to college. Though Uber is generally cheaper, its ridership is younger and richer than taxi riders, with most identifying themselves in the “middle 50 percent” of incomes (around $45,000 a year); seniors, the disabled, and the poor make up a higher percentage of taxi clientele than their share of the general population.
The political strategy behind ride-sharing lies in pitting the figure of the consumer against the figure of the citizen. As the sociologist Wolfgang Streeck has argued, the explosion of consumer choices in the 1960s and ’70s didn’t only affect the kinds of products people owned. It affected the way those people regarded government services and public utilities, which began to seem shabby compared with the vibrant world of consumer goods. A public service like mass transit came to seem less like a community necessity and more like one choice among many. Dissatisfied with goods formerly subject to collective provision, such as buses, the affluent ceased to pay for them, supporting private options even when public ones remained.
The promise of ride-sharing is that it complements public transit. In practice, ride-sharing eliminates public transit where it exists. The majority of ride-sharing trips in San Francisco take place in neighborhoods with the highest concentration of buses and subways, and even before New York’s summer of subway hell, train ridership had dipped. Bus ridership has decreased, too. What happened to all of those riders? Some are biking, some walking — but many are in cars on the streets. A 2017 study of traffic patterns proved conclusively that congestion in New York City has increased since the introduction of ride-sharing. Meanwhile, Uber and Lyft are negotiating with cities to replace public buses with subsidized rides.
Once Uber and Lyft were legalized in a city, it became impossible to hold them to existing regulations. When the companies refused to submit to driver-fingerprinting laws in Austin, the city put the requirement to a referendum and voters booted ride-sharing out of town. But in 2017, the Texas legislature overruled the city’s voters. The fingerprinting requirements were lifted, and Texans were left with no choice but to accept ride-sharing. The companies are believed to have spent $2.3 million on lobbying Texas lawmakers this year alone.
In their antiregulatory crusade, Uber and Lyft have fostered a divided society, pitting one kind of worker against another, one kind of user against another. The largest group of Uber drivers is white (40 percent), with black non-Hispanics the second largest (19.5 percent); the largest group of taxi drivers is black (over 30 percent), with white drivers in second (26 percent). Most Uber drivers are younger and have college experience, and many have degrees; most taxi drivers are older, married, and have never been to college. Though Uber is generally cheaper, its ridership is younger and richer than taxi riders, with most identifying themselves in the “middle 50 percent” of incomes (around $45,000 a year); seniors, the disabled, and the poor make up a higher percentage of taxi clientele than their share of the general population.
The political strategy behind ride-sharing lies in pitting the figure of the consumer against the figure of the citizen. As the sociologist Wolfgang Streeck has argued, the explosion of consumer choices in the 1960s and ’70s didn’t only affect the kinds of products people owned. It affected the way those people regarded government services and public utilities, which began to seem shabby compared with the vibrant world of consumer goods. A public service like mass transit came to seem less like a community necessity and more like one choice among many. Dissatisfied with goods formerly subject to collective provision, such as buses, the affluent ceased to pay for them, supporting private options even when public ones remained.
The promise of ride-sharing is that it complements public transit. In practice, ride-sharing eliminates public transit where it exists. The majority of ride-sharing trips in San Francisco take place in neighborhoods with the highest concentration of buses and subways, and even before New York’s summer of subway hell, train ridership had dipped. Bus ridership has decreased, too. What happened to all of those riders? Some are biking, some walking — but many are in cars on the streets. A 2017 study of traffic patterns proved conclusively that congestion in New York City has increased since the introduction of ride-sharing. Meanwhile, Uber and Lyft are negotiating with cities to replace public buses with subsidized rides.
by The Editors, N+1 | Read more:
Image: uncredited
