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Uber Takes a Hit in London

In today’s neoliberal world, colossally lucrative enterprises, making their originators some of the wealthiest people on earth, exist in a realm that can best be described as virtual: Uber and Lyft own no taxis, Airbnb owns no rental properties, eBay/Alibaba possess no inventory, Facebook generates no content of its own, TaskRabbit and Amazon’s Mechanical Turk (the latter’s motto: “giving you access to a scalable workforce”) create no genuinely sustainable jobs, but use the internet to “match” individuals with substantial incomes needing someone to undertake menial tasks or run small errands with a hapless “gig” clientele prepared to do this for chickenfeed.

London and New York are the capitals of our neoliberal world, so the recent decision by the Transport for London (TfL) not to renew Uber’s licence when it expires on 30 September, on the grounds that it was not a “fit and proper” operator, comes as something of a surprise.  Uber will be allowed to operate while it appeals TfL’s decision.

TfL, in justifying its decision, highlighted Uber’s failure to report criminal offices, as well as being derelict in obtaining medical certificates and driver background checks. Uber kept a driver on its books after he had committed a sexual assault on a passenger, and the driver went on to commit a more serious sexual assault four months later.

Uber’s use of Greyball– software used to block regulators from accessing its app– was also cited by TfL as a justification for its decision.

I’ve never used Uber or Lyft, since I’m in the fortunate position of being able to afford taxis that aren’t a part of the gig economy.  Moreover, I prefer public transport to any other alternative when I’m in London.   That said, TfL’s decision to ban Uber is to be welcomed.

Uber is the underbelly of neoliberal London.

Anybody who is fairly well-informed will be aware that Uber is cheap precisely because it is not properly regulated.  Even a cursory look at analyses of its business model will show that once it is appropriately regulated– e.g. being required to give its drivers full workers’ rights, and vetting them satisfactorily– Uber will no longer be “cheap”.

Uber’s dodge, which has been challenged in courts in several countries, is to maintain that its drivers are not “employees”, but “self-employed contractors”, in this way obviating the need to give them the rights and benefits– such as a minimum wage and the right to days off work while being paid—required by law of employers.  A safety issue is at stake here, since without the right to take time off while being paid, exhausted drivers will be on the road posing a safety risk to other road users.  In any event, Uber drivers already work long hours to cover their overheads, which Uber won’t pick up because it designates its drivers as “self-employed”.

Another dodge employed by Uber lies in its claim that its advantage over competitors comes from its willingness to espouse state of the art technology, thereby implying that officially regulated taxi drivers who do not avail themselves of this technology are Luddites.

However, Uber’s self-description as a “technological disruptor” is largely flim-flam, and the not so secret reason for Uber’s so-called advantage lies elsewhere.

Uber’s business model, in essence, is to flood the market with drivers– it already has 40,000 in London– through low entry requirements, thereby driving down prices.  An Uber driver, writing anonymously in The Guardian, says that Uber is so eager to recruit drivers that he’s seen drivers being signed-up at Uber’s London office with translators standing beside them.

Proper regulation will dry up the flood of drivers, and Uber will in all likelihood no longer enjoy its price advantage because it can’t underprice its competitors.

Uber UK also enjoys perks not available to its competitors, such as not paying the Value Added Tax (VAT), which helps Uber keep its fares artificially low.

In Quebec, Canada, regular taxi drivers are required to undergo 35 hours of mandatory training, whereas Uber drivers are only required to do this for 20 hours.  The government there is now proposing to bring Uber’s training requirement up to the 35-hour standard, to have Uber’s background checks undertaken by the police (as opposed to private “security” companies), and to have the vehicles of Uber drivers inspected every 12 months.  Regular taxis in Quebec must comply with such requirements, but, according to The Guardian, Uber Quebec is now threatening to stop operating in the province if this legislation is passed.

Uber Quebec should follow the example of Austin, Texas, which gave Uber the boot, and promptly saw it replaced by other taxi-hailing apps.

Uber operates a controversial “surge” pricing policy, ostensibly intended to get more drivers on the road when demand for taxis is high.  “Surge” pricing kicks in automatically, and can increase fares by two, three, or four times what is normally charged.

The impact of “surge” pricing became clear during a siege in December 2014 inside a busy café in Sydney’s central business district (CBD) in which 3 people (including the armed hostage-taker) were killed.

According to NBC News, Uber drivers were charging a minimum fare of A$100/US$82/£59 for journeys from the CBD, more than four times the normal fare before the siege occurred.  After a storm of protest on social media, Uber reversed its policy, and instructed drivers to offer free lifts to those fleeing the CBD on that day.

For now, Uber is stiffing its drivers (oops, “self-employed contractors”), but its aim is to dispense with them altogether by using self-driving cars.  With financial backing from Goldman Sachs, BlackRock, Mercedes-Benz, and other multibillion-dollar companies, Uber has started using “autonomous” vehicles.

In a pilot project in San Francisco, Uber’s self-driving vehicles had to be taken off the road when one of them ran a red light.

Uber’s self-driving vehicles have now been approved for use in Arizona.

Uber has had a pilot project in Pittsburgh since 2014.  Two Uber employees sit in the front of the vehicle, one to gather data, and the other to take control of the vehicle if something goes wrong.  A Huffington Post article, dated 2017-09-29, said that of Uber’s job openings in Pittsburgh that week, only 1 out of the 56 jobs was for a vehicle operator–  all the other openings were for technicians and engineers.

Self-driving technology is clearly in its infancy.  The inventor James Dyson, best known for his bagless vacuum cleaner, and now producing an electric car to rival the Tesla, has said that his electric car will not feature any driverless technology because “total hands-off driving is some way off”.

San Francisco’s traffic is nothing compared to London’s, and anyone who uses a driverless Uber taxi in London, at this stage of the technology’s development, could with some justification be accused of intending “suicide by Uber”.

However, the introduction of driverless technology is inevitable, and only a matter of time.  The issue here is not that Uber is striving to use it, but that it’s strategy when faced with regulation is to say that regulation imperils the livelihoods of its drivers.  This may be true, but obscures the fact that Uber is seeking to abolish in toto the possibility of anyone making a living by driving one of its cars.

Uber is using a well-tried two-pronged strategy in fighting back against TfL.  On the one hand, it’s made the customary insincerely humble apology to its customers (we all know the familiar rigmarole– “Yes, we got things wrong, but we’re committed to putting them right”).  On the other, it’s deployed a team of lawyers and PR smoothies to push back against TfL, primarily by initiating pro-Uber petitions in social media.

Uber therefore apologizes for wrongdoing, in effect pleading guilty to TfL’s charges, but still has the effrontery to appeal against TfL’s decision to revoke its license for wrongdoing.  As any petty criminal in the same situation, but without Uber’s resources to get away with this kind of brazen impudence, would say: Crikey!

I’ve read many of the comments accompanying the signatures on these petitions.  It’s clear numerous comment-makers are clueless about Uber’s modus operandi, and/or don’t give a damn about its exploitation of drivers.

Uber has suddenly started to display immense concern, publicly, over the 40,000 drivers who are likely to be out of work if its London license is not restored– despite the fact that (as we have seen) Uber’s ultimate aim is to advance, in all possible haste, the deployment of self-driving cars that will make these drivers redundant en masse.

The cynic in me presumes Uber will get its license back from TfL after it undertakes to make a few largely cosmetic changes.

Only a knucklehead believes Uber will make fundamental changes to its business model in response to TfL’s decision.  If it did comply in full, Uber will perforce have to function like other fully regulated taxi companies, thereby surrendering its advantage over these adequately regulated competitors.

Uber is a typical “race to the bottom” predatory enterprise spawned by neoliberalism.  These predators flourish because they pay the lowest possible wages, try every way possible to avoid giving workers adequate benefits, minimize their contractual obligations, game the existing regulatory system (often with the connivance of avaricious rightwing politicians), and dupe their customers into thinking they are doing them a “service”.

Uber and the other virtual enterprises benefitting from neoliberalism can however be put to social uses:  Uber can become a communal car-sharing service, Airbnb can serve the homeless, and TaskRabbit and Mechanical Turk can service the needs of a market providing substantial employment beyond the level of “gig” jobs.

For now, this is just a dream.

But weep for Uber?  To use Cockney rhyming slang:  not on your Nelly!

More articles by:

Kenneth Surin teaches at Duke University, North Carolina.  He lives in Blacksburg, Virginia.

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