Easily the high point of the early Trump resistance was the huge, spontaneous gatherings at airports across the country to oppose the travel ban. On January 28, as protesters assembled outside JFK Terminal 4 to demand the release of two detained Iraqi refugees, the New York Taxi Workers Alliance, which represents many Muslim and South Asian drivers, called an hour-long strike in support. Travelers waiting for private transport were suddenly stranded — until Uber showed up. The company had turned off its surge pricing at JFK, breaking the taxi drivers’ strike with what critics were quick to call scabbing. A call spread across social media to delete Uber, an attempt to warn the company that any support for Trump would hurt its bottom line. (Travis Kalanick, then Uber’s CEO, had joined the President’s economic advisory council back in December.) The tactic appeared to work. By February, 200,000 users had deleted their accounts. And taxi workers, who had been decrying Uber’s illegal wage-cutting practices for years, finally had allies. It was enough to raise hopes that the Trump-Kalanick alliance had revived the flagging cause of labor solidarity.
#DeleteUber was one link in the chain of events leading to Kalanick’s ouster in June. The company was mired in a series of sexual-assault scandals dating back to last summer, when leaked screenshots of Uber’s customer-service software showed thousands of user complaints containing the words sexual assault and rape. (Uber discounted the volume on the assumption that many of these reflected casual usage, such as — to use one of their examples — “You raped my wallet.”) By June of this year, external lawyers discovered 215 complaints of sexual harassment within the company, and twenty people were fired as a result. The same month, a passenger filed a lawsuit against Uber executives for trying to quash her accusation that a driver in New Delhi had raped her (not her wallet). She alleged that Uber had tried to pass off her allegation as a conspiracy fabricated by another ride-sharing or taxi company. By this point, Kalanick’s position had become untenable. A petition from investors forced his resignation.1
Kalanick is the latest entrant into the burgeoning pantheon of tech sociopaths. His departure will deprive the press of a major quotient of noxious statements and bad behavior, as Kalanick indulged in more tech-bro phraseology than most people ever breathe. “If you can get a Prius for cheaper than a taxi, you just changed 100,000 people’s lives in a city,” he once said. “If you can get it reliably? Holy shit. That’s hashtag winning.” His infamous claim that his riches granted him women on demand — “we call that Boob-er” — was one of many hints that he might be inclined to foster a sexist company culture. Kalanick was caught on camera yelling at an Uber driver for complaining about low wages (“You know what? Some people don’t like to take responsibility for their own shit. They blame everything in their life on somebody else. Good luck!”). After the video was made public, he apologized and announced his intention to seek “leadership help.” As part of his self-adjustment, Kalanick would commandeer the company’s lactation room to meditate.
What has been the effect of all the bad press? According to data, Uber has lost 7 percent of US market share, chiefly to its primary rival, Lyft. Seeing an opportunity, Lyft’s president, John Zimmer, has recast the company as a social-justice warrior and sensitive lover. “We’re woke,” he told Time. “Our community is woke, and the US population is woke. . . . We’re a better boyfriend.” Despite these losses, Uber maintains a much larger market share than its competitor. Lyft operates only in the US, while Uber works in dozens of countries around the world. Except for a major loss in China, where it was driven out by a competitor and regulators, Uber has not been seriously hurt by scandal. Even if Uber’s share of rides has decreased, the total number of rides has spiked and remains on the rise. And ride-sharing, woke or not, is bad for taxi workers.
The personal loathsomeness of Kalanick obscures the broader trends that made his company possible. The cult of the CEO has constrained the imagination of the press. Is Uber’s culture too damaged to change? Will it lose out to Lyft? Stories like these place too much emphasis on how a single individual shapes an organization. Sexual harassment and discrimination pervade Silicon Valley like fog. Even well-established Google was revealed in a recent study to suffer from “extreme gender pay disparity.” A 2016 survey of Silicon Valley workers titled “Elephant in the Valley” revealed that 60 percent of women in Silicon Valley had suffered harassment, and one in three felt afraid for their personal safety. One would have to go back to the office world of the 1970s to find such an asphyxiating atmosphere of fear and gaslighting, or to Fox News.
What makes Silicon Valley novel — or perhaps a throwback to Standard Oil and the railroads — is the homology between its companies’ internal culture of predation, sexual and otherwise, and the swashbuckling illegality of their public maneuvers. For all the hoopla over their parental leave and benefits, Valley companies extract punishing hours from their workers, whose salaries they keep artificially low by ensuring they can’t shift jobs. In the world at large, they gain monopoly power by busting regulations, flouting antitrust laws, and buying politicians. Despite the microdistinctions people like to make between the two, bad Uber and good Lyft are united in these practices. From the outset, both intended to undermine the rules that regulate transportation, and both have succeeded.
As Brad Stone tells it in his breathless account, The Upstarts, Uber and Lyft exuded a toddler-like confusion over regulations, taxes, and transit bureaucracy when they started out — obstacles that, when confronted, provoked in them a violent desire to break everything. A cofounder of Lyft, Logan Green, had a frustrating experience when he volunteered on a transit board in Southern California. While vacationing in Zimbabwe, he found exhilarating liberation in the form of unlicensed vans. Here, it turned out, was utopia: a country where public transportation was unknown and the concept of the rule of law risible. Green called the first iteration of Lyft “Zimrides.” Kalanick, for his part, told Stone that he was fortified in his mission after he was reprimanded by Christiane Hayashi, San Francisco’s head of transportation, in 2010.
What did the ride-sharing fraternity hate? The number of licensed taxis was limited by city authorities. Fares were set by the city, save in livery cabs, which don’t pick up riders on the street. Taxi companies were required to insure their drivers and maintain their cars. Ride-sharing companies would change all that simply by ignoring it. Here and there, unlicensed Uber drivers would be pulled over and fined by police. But the company could use its store of venture capital to pay the fines, and in no time, the unlicensed drivers would be back on the streets.
The promise of ride-sharing is that it complements public transit. In practice, it eliminates it.Tweet
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.
After they began to flout the regulations, Uber and Lyft figured out how to undermine them from within. Uber hired former Obama campaign head David Plouffe to work the political angles in the US; Rachel Whetstone, godmother to David Cameron’s eldest child and a senior executive at Uber until April, did the work in the UK. Where the companies didn’t have an in, money made up the difference. Lobbying became a dedicated expense: in the US, Uber and Lyft spent a combined $1.6 million in 2016, up from $600,000 in 2015. Lobbying firms associated with Heather Podesta and her ex-husband Tony, known for their political connections, helped both companies.
Lawbreaking, labor degradation, and piecework were recast, with the help of skilled operatives, as questions of consumer rights, innovation, and progress. New York and London resisted Uber at first. London’s mayor, Boris Johnson, was personally pressured by David Cameron; in New York, Plouffe lobbied the governor, Andrew Cuomo, until the mayor, Bill de Blasio, backed down from his attempt to cap the number of drivers. (Plouffe was recently fined $90,000 by Chicago for illegally lobbying the city’s mayor, Rahm Emanuel.) Lawmakers’ attempts to shut down illegal ride-sharing became halfhearted. Politicians who fashioned themselves after tech CEOs — San Francisco mayor Ed Lee, Pittsburgh mayor Bill Peduto — took up Uber and Lyft as a public cause. “I will not let the governor and the Public Utility Commission shut down innovation without a fight,” Peduto proclaimed.
As a kind of trial run, ride-sharing services were made temporarily legal in Philadelphia just in time for last summer’s Democratic National Convention.2 All the convention materials advertised its presence. The first night’s party, hosted by the company, was picketed by striking Uber drivers and people with disabilities. Hundreds of Democrats walked past them.3
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.
Behind all this lurks the specter of the self-driving car — the emblem of a paradise in which all transportation, everywhere, is replaced by software that regulates, with serene efficiency, the motion of an entire civilization. This is the vision that animates every regulatory collapse, every public-transportation failure, every taxi driver’s lost livelihood. For the consumer, the system is already automated: you press a button, a car shows up, you emerge at your destination. It is, in the jargon of the Valley, “frictionless.”
Eventually, they say, it will all be worth it. It doesn’t seem to matter that these advances are far in the future or may never take place. Meanwhile, an actually existing concept — affordable mass transit — is being lost.
This article uses the term “ride-sharing” to describe companies such as Uber and Lyft, as a matter of common usage. However, the correct, legally appropriate term for them is Transportation Network Companies (TNC). ↩
Correction, September 8, 2017: An earlier version of this piece mistakenly stated that Philadelphia was late in making ride-sharing legal; in fact, it was illegal in Pennsylvania until Governor Tom Wolf signed Act 164 in November 2016, which permitted TNCs in the state. ↩
Correction, September 8, 2017: The article originally stated mistakenly that taxi workers picketed the party hosted by Uber. In fact, it was drivers for Uber as well as people with disabilities. (Very few Uber vehicles have wheelchair-accessible cars.) ↩