cross-posted from The Worker's Paradise
[Editor's note: for further information about the "ridesharing" business model of Uber and Lyft (or rather, the lack of one) interested readers are encouraged to peruse Hubert Horan's series of articles entitled "Can Uber Ever Deliver?" on the finance-focused blog Naked Capitalism.]
I often see posts and efforts regarding platform co-ops that want to co-operatize the “gig” economy. I understand the desire. The co-op community missed this change in our society in a big way. It happened very quickly and utilized an industry whose culture tends not to support collective action (either through labor unions or cooperatives). One of the regularly recurring concepts is to replace Lyft or Uber with a co-op version. I try to be an optimist, but not only don’t I think that it is possible, I think that the co-op community should be thinking about how to reinvent the use to technology in line with the cooperative identity.
Uber and Lyft are not new to the taxicab industry in terms of their model. The only difference between these companies and the traditional taxicab companies, is that they were able to operate in multiple cities and afford political influence at a level that most taxicab company owners could only dream about. The manner in which Uber and Lyft treats the drivers and passengers is part and parcel of the industry that it pretends to replace. It is predatory and extractive.
The primary reason that I don’t think that a co-op version of Uber/Lyft is possible comes from a simple aspect of their plan. These apps are available to provide services in thousands of communities. While it might be possible to create a co-op spanning a similar geography, it would be difficult to have a meaningful democratic control and economic participation through multiple languages, cultures, and nationalities. In addition, Uber and Lyft exist, in my view, more as research labs for their investors (Google among them), so even breaking even isn’t the priority that it would be for a driver-owned platform. It may be possible to simply serve a single area. However, drivers for Uber and Lyft don’t make any more than cab drivers even with millions in marketing support provided by these companies, I a skeptical that a one community company can breakthrough in a single market.
Secondly, a key part of the Uber/Lyft plan works on ignoring liability insurance. This falls on the individual drivers (although there are umbrella plans provided through these companies, the insurance only kicks in if the driver’s insurance is exhausted). However, as far as I know, most insurance companies will not cover pay-for-service transportation on individual plans, which means that the drivers and passengers are completely at risk. Uber and Lyft have a phalanx of lawyers, lobbyists, and a mountain of cash to change laws (as they did in Wisconsin and Virginia) and fight lawsuits.
As to why the platform co-op model shouldn’t re-create Uber, the first act of this company, and others like it, in most cities was to break local ordinances on public transportation (in many cities, such as Madison, taxicabs are considered a “public conveyance”). Most importantly, they effectively red line the ridership based on their ability to own a smartphone, access to either a credit or debit card, and physical abilities. This simple act eliminates a huge percentage of people who need curb to curb transportation. They pretended to have no control over the drivers, even though they do through the software, and this allows drivers to red line their service area for other reasons. These are not cooperative values or cooperative ways of conducting business. Whatever drivers do to collectively challenge the Uber model, they must not copy it.
Taxi cab companies serve their communities and are generally tied to the community. The platform driver model allows a driver with no ties to the community to swoop in and cherry pick rides during peak events. With no connection to the community, there is no responsibility to the community. Co-ops have the ethical values of social responsibility and caring for others. The 7th Principle of Cooperation is Concern for Communities.
Taxi co-ops tend to operate on the co-op values of self-help, self-responsibility, solidarity, and many others. I point out these three, because a connection exists between the drivers of a taxi co-op that enables drivers and staff of the co-op to protect each other, help each other, and provide the education, information, and training that is fundamental to cooperation and a democratic community. A few years ago, I had the opportunity to interview some of the members of Union Taxi in Denver. They pointed out that with the co-op, their lease dropped by $500/week ($26,000 a year). This meant having weekends to spend with their children. At the same time, they still made more than the Uber drivers, had the support of their peers, and access to material support (maintenance, group purchasing, etc.).
A platform transportation co-op that I could get behind would be a secondary or tertiary co-op that provides technical support for the 7-8 taxi co-ops in the country that would offer multi-city support for consumers, provide dispatch and management software for the taxi co-ops, and help start new taxi co-ops. The individual co-ops would be members of the app co-op, pay dues and service fees, help build the co-op community, and have a national narrative about licensed, trained, and safe drivers. They could message the co-op difference about creating safe working conditions, decent pay and benefits, and being a part of the communities that they serve. The could even encourage passengers to add to a co-op development fund as part of the fare (over the tip, of course).
Header image by Rob Chandanais. CC BY-NC-SA 2.0