This doesn’t mean dri­vers are bet­ter off work­ing for a tra­di­tion­al taxi com­pa­ny. While Uber’s bur­den­some cost-shift­ing has come to define Uber­iza­tion, the com­pa­ny mere­ly dig­i­tized the taxi­cab industry’s already exploita­tive prac­tices. The taxi medal­lion sys­tem , which requires dri­vers to pay their cab’s medal­lion own­er at the start of each shift, deserved to be ​“dis­rupt­ed.” But Uber’s employ­ees face seri­ous costs and risks nonetheless.

Yet again, an inves­tiga­tive report has found that Uber under­pays its dri­vers. Using com­pa­ny-pro­vid­ed data and leaked doc­u­ments, Buz­zfeed found that dri­vers in Detroit, Hous­ton, and Den­ver ​“earned less than an aver­age of $13.25 an hour after expens­es” and faced year­ly expens­es of rough­ly $3,000.

The pos­si­bil­i­ties don’t have to be so restrict­ed how­ev­er. Ride-share dri­vers usu­al­ly already own their vehi­cles, so in the­o­ry they could enter the ride-share mar­ket­place them­selves. By ditch­ing Uber’s preda­to­ry prac­tices for a coop­er­a­tive mod­el that uses the same tech­nol­o­gy, dri­ver-owned apps could democ­ra­tize the ride-shar­ing mar­ket­place, ful­fill­ing the ini­tial promise of the so-called shar­ing econ­o­my.

A co-op app would also avoid the pit­falls of oth­er work­er-owned taxi coop­er­a­tives like San Francisco’s Yel­low Cab Co-op, which filed for bank­rupt­cy in Jan­u­ary. Yel­low Cab relied on the old­er ride-hail­ing mod­el; if new co-ops employed a ride-shar­ing mod­el — like the one indus­try giants Uber and Lyft use — they could com­pete in the same mar­ket­place and poten­tial­ly out-dis­rupt the Sil­i­con Val­ley darlings.

The bot­tom line

Uber’s plat­form tech­nol­o­gy may have for­ev­er changed the way peo­ple catch a ride, but it’s real­ly the company’s adept reg­u­la­tion-dodg­ing and cost-shift­ing that made it the prof­itable behe­moth it is today. That, and the fact that it hasn’t shared its suc­cess with its drivers.

Uber empha­sizes its pos­i­tive impact on the lives of part-time work­ers who treat dri­ving as a side gig, but the com­pa­ny depends on its full-time ​“part­ners” to trans­port a major­i­ty of rid­ers. Less than 30 per­cent of Uber’s con­trac­tors work more than thir­ty hours a week.

But accord­ing to a sur­vey by Har­ry Camp­bell — a dri­ver who blogs as the ​“Rideshare Guy” — these full-time work­ers dri­ve about half the total road hours across Uber’s plat­form. His blog has also report­ed that due to rate cuts, Uber dri­vers today dri­ve near­ly twice as many hours to earn the same amount in fares in 2013.

The dri­vers who don’t com­plete­ly depend on their work with Uber to pay their bills — a group that makes up about half of the company’s work­force — depress full-time work­ers’ wages. Because they have less skin in the game, they aren’t moti­vat­ed to demand bet­ter pay and benefits.

Full-time dri­vers have already joined forces to demand bet­ter con­di­tions. In Feb­ru­ary, hun­dreds gath­ered in front of the company’s New York head­quar­ters and shut off their apps in protest of a 15 per­cent price cut, the lat­est in a series of cor­po­rate deci­sions that have harmed dri­vers’ bot­tom lines. The Uber Dri­vers Net­work — which has been attempt­ing to rep­re­sent dri­vers in New York since 2014 — coor­di­nat­ed the action. The New York Post spoke to a protest­ing dri­ver who told the paper he works six­teen hours a day, adding that the week before “[he] worked nine­teen hours in one day, and I slept in the car at JFK.”

Far­roukh Kham­damov, one of the group’s orga­niz­ers, orig­i­nal­ly joined Uber to sched­ule work around his class­es, but even­tu­al­ly had to take on addi­tion­al hours to com­pen­sate for unex­pect­ed rate cuts like the one in Feb­ru­ary. Uber claims these cuts increase demand and there­fore decrease dri­ver wait times.

But, as Kham­damov points out, most dri­vers can only accept so many rides with­in a giv­en time frame, so the price cut doesn’t ben­e­fit them at all. Hav­ing joined the com­pa­ny antic­i­pat­ing flex­i­bil­i­ty and inde­pen­dence, these dri­vers become more dis­en­chant­ed each time Uber asserts its con­trol by low­er­ing their wages.

Mem­bers of the group have col­lab­o­ra­tive­ly devel­oped an app called ​“Swift,” which would be entire­ly dri­ver-owned. Kham­damov thinks that dri­vers — as Uber’s ser­vice providers and car own­ers — can lever­age labor and cap­i­tal against the com­pa­ny because after all ​“with­out the dri­vers, it’s just an app on your phone.” As a coop­er­a­tive Swift hopes to cre­ate employ­ee equi­ty, increased job sta­bil­i­ty, and shared gov­er­nance — enabling dri­vers to dic­tate the val­ue of the ser­vice they provide.

The app’s launch date has yet to be announced, but dri­vers inter­est­ed in dri­ving full-time can already sign up. And while Swift has not detailed exact­ly how it will recruit and hire dri­vers, sev­er­al mod­els exist.

In the last ten years, taxi dri­vers have part­nered with unions like the Team­sters and the Com­mu­ni­ca­tions Work­ers of Amer­i­ca in Seat­tle and Den­ver, respec­tive­ly. Union Cab in Madi­son, Wis­con­sin — in oper­a­tion since 1979 — has even man­aged to become the city’s mar­ket leader. Wages and ben­e­fits pro­vid­ed by Union Cab ​“exceed indus­try norms and still allow the com­pa­ny to make a prof­it. Vet­er­an dri­vers’ annu­al income can exceed $40,000 (about 35 per­cent high­er than the nation­al aver­age) and they receive health insur­ance, a rar­i­ty for taxi drivers.”

Com­bin­ing these mod­els with ride-share apps would help co-ops to sur­vive in the new marketplace.

Two ways forward

Com­pet­ing with Uber might seem intim­i­dat­ing, but in many respects the com­pa­ny is a paper tiger. Its mas­sive val­u­a­tion, which stood at $62.5 bil­lion in Jan­u­ary, comes from intel­lec­tu­al prop­er­ty — its brand and data — rather than from tan­gi­ble assets. While con­sumers rec­og­nize Uber’s pow­er­ful brand­ing, the com­pa­ny isn’t offer­ing an exclu­sive prod­uct, nor does it own many liq­uid assets or means of production.

The com­pa­ny does, how­ev­er, reg­u­lar­ly invest in main­tain­ing its exploita­tive busi­ness mod­el. Uber reg­is­tered as a ​“tech­nol­o­gy com­pa­ny,” and has suc­cess­ful­ly defeat­ed attempts to re-clas­si­fy it as a tra­di­tion­al trans­porta­tion com­pa­ny. Recent­ly in Los Ange­les, it paid near­ly $100 mil­lion to set­tle a class-action suit with about 385,000 of the city’s dri­vers. If the com­pa­ny had lost the suit, it might have had to treat these dri­vers as reg­u­lar employ­ees, poten­tial­ly cost­ing them bil­lions in wages and benefits.

For Uber, offer­ing a com­par­a­tive­ly small set­tle­ment to indi­vid­ual dri­vers is an easy choice. Dri­vers and unions who can’t afford a lengthy court bat­tle will take what­ev­er con­ces­sions they can get through a set­tle­ment. (Work­ers can now solic­it tips via a sign placed in their car’s back seat!)

But its exploita­tive busi­ness mod­el has costs, par­tic­u­lar­ly for dri­vers. Accord­ing to Uber’s pub­lic num­bers, the com­pa­ny hem­or­rhages half its dri­vers every year. Uber dri­vers seem to share the same expe­ri­ence of work­ing for the com­pa­ny: they enjoy a brief hon­ey­moon peri­od, then soon endure what Camp­bell calls ​“pain points” — suc­ces­sive irri­ta­tions like reg­u­lar com­mis­sion hikes or deal­ing with the company’s intractable cus­tomer ser­vice oper­a­tion. Some dri­vers adapt by learn­ing the kinds of work-arounds high­light­ed by blogs like Campbell’s, but most even­tu­al­ly quit.

Uber’s attri­tion cre­ates a huge pool of frus­trat­ed but expe­ri­enced dri­vers who could com­pete against the com­pa­ny in coop­er­a­tives. After com­par­ing the company’s growth rate to the size of its dri­ver force, Camp­bell cal­cu­lat­ed that Uber needs to hire almost six­ty thou­sand new dri­vers a month to make up the dif­fer­ence. Coop­er­a­tives wouldn’t need to bear the expen­sive costs of dri­ver recruit­ment — one obvi­ous advan­tage of hav­ing sta­ble employees.

More­over, the cre­ation of an open-source ride-share app would allow dis­grun­tled dri­vers in any city to form local co-ops, a sce­nario that soci­ol­o­gy pro­fes­sor Ger­ald Davis argues would not just dis­rupt but poten­tial­ly dev­as­tate Uber. In his new book, The Van­ish­ing Amer­i­can Cor­po­ra­tion, Davis describes two paths for­ward, one where evap­o­rat­ing cor­po­ra­tions and cor­po­rate respon­si­bil­i­ty con­tin­ue to increase inequal­i­ty and anoth­er where grass­roots groups use tech­nol­o­gy to build their own infrastructure.

By employ­ing expe­ri­enced full-time dri­vers vest­ed in the qual­i­ty of their ser­vice, co-ops could eas­i­ly out­shine Uber’s part-time work­force. ​“Co-ops can com­pete by attract­ing the best dri­vers and by pro­mot­ing a high­er lev­el of ser­vice than gig employ­ees can give.” Reg­u­la­tions could play an impor­tant role, and giv­en reg­u­lar inci­dents involv­ing dan­ger­ous Uber dri­vers, ​“gov­ern­ment require­ments for suit­ably vet­ted dri­vers (like in Ger­many) might tilt toward co-ops over Uber.”

Davis points out that to com­pete with Uber, coop­er­a­tives must con­sid­er whether ​“peo­ple have room for one more app on their phone.” One way to coun­ter­act infight­ing between dri­ver-owned com­pa­nies would be to ​“make the soft­ware open-source, so that upgrades can be con­tributed on the fly.”

Giv­ing dri­vers a say

Con­sumers are gen­er­al­ly hap­py with Uber and the company’s spe­cial sta­tus, so there’s lit­tle demand-side pres­sure to treat its employ­ees bet­ter. How­ev­er, Davis says, ​“co-ops may be less prone to attract­ing local resis­tance, and also more like­ly to gen­er­ate loy­al employ­ees and, per­haps, riders.”

While 60 per­cent of fre­quent ride-shar­ing app users believe that ser­vices like Uber should not be sub­ject to the same reg­u­la­tions as tra­di­tion­al taxi com­pa­nies, they might be will­ing to switch to a co-op mod­el that offers a cheap­er price and sol­id ser­vice. Forth­com­ing apps like Swift will test this theory.

Uber attract­ed dri­vers with flex­i­ble hours and the promise of ​“being your own boss.” Own­er­ship stakes in coop­er­a­tives could actu­al­ly pro­vide dri­vers with this autonomy.

By turn­ing to co-op apps, dri­vers can retain the flex­i­bil­i­ty of work­ing under a mod­el like Uber’s while also hav­ing a say in their own wages and con­di­tions. As soft­ware becomes more broad­ly avail­able and dri­vers real­ize the low cost and high poten­tial of orga­niz­ing a co-op, Uber may find itself the vic­tim of disruption.

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