More than 100 furious hacks surrounded Uber's offices in New York this week to protest the company's unfair policies toward its drivers. The good news is that the free market is on their side.
Abdul, an UberBlack driver in New York, leads a protest outside of Uber's offices in Long Island City. Photos by the author.
If you live in a major city, chances are your local taxi industry has been upended by Uber, or will be soon. Created in 2009 by founders who “just wanted to feel baller in San Francisco," the app has become a ride-sharing juggernaut, waging a techno-libertarian insurgency against politicians and regulators standing in the way of its plans to dominate the global car service industry. With an estimated worth of $17 billion, the company is the darling of Silicon Valley’s cult of disruption, viewing itself not so much as a car company, but as a technology platform that will end ownership as we know it.
Increasingly, though, that techno-libertarian vision has come bumping up against the more mundane realities of running what is still essentially a taxi service. That was definitely the case in New York this week, where more than 100 irate black car drivers surrounded Uber’s headquarters in Queens to protest the company’s deceptive treatment and unfair payment policies. For the better part of the morning Monday, the drivers rallied on the corner of Jackson Avenue, shaking their fists at the black U logo, waving handmade signs, and shouting down bewildered twentysomethings that the company sent out to reason with mob.
The main beef, it seems, is Uber’s recent decision to start forcing drivers who signed up for its premium UberBlack and SUV service to receive ride requests from the lower-tier UberX and UberXL services. Previously, luxury drivers were able to opt-in to accept cheaper rides, but now Uber has effectively removed that choice. In an email last week, the company informed drivers that it would assign UberX fares to all drivers, regardless of their vehicle tier; drivers who canceled those trips risked having their accounts suspended or being kicked off the app altogether.
Uber insists that the changes are actually good for black car drivers, giving them the opportunity to pick up more rides, and theoretically at least, make more money. “What this does is increases earning potential,” said Taylor Bennett, a chestnut-haired spokesman who pulled me away from the protest to give me Uber’s spin. Over the summer, he said, the company found that black car drivers who opted to take UberX trips earned 35-to-50 percent more than those who just took luxury rides. “At the end of the day, it’s more trips and more money for our partners.”
Cabbies gang up on a stunned Uber employee.
Clearly, the chanting drivers around us did not agree. When Bennett walked away, I was besieged by protesters clamoring to give me a lesson on the economics of driving a hack in New York City. The gist of their argument is that while drivers might technically make more money by accepting UberX, the fares are lower and the rides are typically shorter, which means that drivers are taking more trips for less money. And taking more trips means higher gas costs and increased wear-and-tear on the vehicle, so while drivers might technically be able to make more money per hour, they are actually losing money on many of their UberX rides. On top of that, drivers said they felt like the company is playing a shell game, signing people on to be luxury car service providers (two drivers told me that Uber had actively encouraged them to purchase a higher-end vehicle), only to have the company turn around and demand that they be taxi drivers.
“The price of gas is not going down, the price of insurance is not going down,” said Michael Ogbonna, a Nigerian-born driver who has been driving livery cars in New York for the past 10 years. “Nothing is adding up. We can’t even pay our house rent. It’s not worth doing.”
“How can they compare us to a yellow cab?” he added. “They don’t have customers, they have passengers. We take care of our customers, believing that they will come back again. We dress nice. We wear suits. You can’t compare us to yellow cabs.”
More broadly, the protest signals a breaking point in long-simmering tensions between Uber and its “driver-partners.” In its pursuit of global car service domination, Uber has lured in thousands of drivers with the promise that they could earn up to $90,000 working full-time for the ride-sharing service. But a growing number of drivers are now saying that Uber is pulling a bait-and-switch, and that aggressive UberX price cuts, lack of gratuities, and an opaque driver ratings system have made it impossible to earn a living working for the service. UberX drivers vented these frustrations with demonstrations in Seattle and San Francisco this week, as well as in Los Angeles, where the hacks have aligned with the Teamsters Union to demand better treatment from the company.
An army of hacks.
Of course, there is no indication that Uber gives a shit about any of this. So far, the company has strong-armed its drivers in the same ruthless way it has steamrolled regulators and sabotaged its competitors. In fact, Uber CEO Travis Kalanick has quipped that he is waiting for the day when he can get rid of drivers, or “the other dude in the car,” and replace them with robots. "The reason Uber could be expensive is because you're not just paying for the car—you're paying for the other dude in the car," Kalanick said at a recent tech conference. "When there's no other dude in the car, the cost of taking an Uber anywhere becomes cheaper than owning a vehicle. So the magic there is, you basically bring the cost below the cost of ownership for everybody, and then car ownership goes away."
The underlying paradox here is that while Uber’s success relies on its ability to recruit armies of drivers, the company has no interest in being a car service. Instead, Uber’s founders and investors see it as the future Amazon of the “sharing economy”—a technology platform that will create techno-utopias where people and their shared possessions will be ferried around on demand by driverless Uber cars.
As exciting as all that may sound, though, the reality is that Uber is still essentially a car-hailing app. And while the company has a huge lead in the taxi wars, the disruption Uber has wreaked on the consumer transportation market could eventually stop working to its advantage.
The good news for drivers is that the free market is in their favor. Uber and its competitors are drawing from a finite pool of qualified drivers. If the company continues to steamroll its drivers, there are other options. In Queens on Monday, it was clear that the black car drivers had a sense of this opportunity. Most of the people I spoke to had already signed up as drivers for Lyft, the ride-sharing competitor that has been branding itself as a kinder, gentler Uber. Others had their own ideas for how to disrupt their industry: Drivers passed around a book of cell phone numbers for something called “The Uber Driver Network,” which organizers described vaguely like a text-based attempt to cut out Uber as the middle man. A group of Algerian drivers told me they were looking for investors to start their own luxury car service. Another driver told me he is developing his own ridesharing software to compete with companies like Uber and Lyft.
“This is New York City. There is always money on the street,” he said. “All people have to do is go on their smart phones and link two people together—that’s the billion-dollar innovation. It’s an app. In a year from now you’re probably going to have 10 different companies exactly like this.”