Setting Things Straight

Setting Things Straight

FROM THE LEFT SIDE OF THE BALCONY | Is Uber a new business culture or an excuse for big profits?

Uber plans to move part of its global headquarters to Oakland next year, having bought the old Sears building on 20th and Broadway. It will employ an estimated 2,000 to 3,000 workers and, according to some, add juice to the revitalization of the Uptown district.

But Uber comes with a business culture full of controversy and phony philosophy. So, as an Oakland resident, I’d like to set a few things straight about our city’s new neighbor.

Uber supporters say the corporation is part of the “sharing economy.” When I lend my car to a friend, that’s sharing. When East Bay folks go into The City during rush hour using the Casual Carpool, that’s sharing. Uber drivers don’t share their cars with the public. They charge a fare. Uber is a $50 billion taxi company with apps. la

Uber management also proudly proclaims that it enjoys “disrupting” society. Oakland Mayor Libby Schaaf even said, referring to Uber, “Oakland has mad love for disrupters.”

As an old ’60s radical, I know something about disruption, having helped organize anti-Vietnam War and anti-draft demonstrations in downtown Oakland. But Uber’s disruption is different. It breaks laws in order to generate big profits.

It allowed drivers to disregard insurance requirements and taxi ordinances. It plays fast and loose with laws on how to compensate drivers. So the question arises: What exactly is Uber disrupting and for whose benefit?

To be fair, there’s a lot to like about Uber and Lyft. I use them on occasion. These companies have introduced digital innovation and created some positive social impact. So far, the UberX service charges significantly lower fares than taxi companies. That will likely change as the industry becomes an oligopoly or monopoly, but for now it’s cheaper.

The apps on smart phones allow customers to hail an Uber car and track its arrival time. Since drivers don’t know your destination until they arrive, they can’t turn down short rides or refuse to take you to a neighborhood that is perceived to be dangerous. These new taxi companies also provide part-time employment for all kinds of people, including those who might otherwise have a hard time finding jobs: immigrants, people of color, students, and ex-cons making new lives for themselves.

Now for the negatives.

Let’s start with the surge-pricing scheme, which is a massive pain in the butt. Uber can unilaterally increase fares by any amount when it deems that there are more customers than available cars. So, suddenly, that ride downtown can cost more than twice a taxi fare. Legacy taxi companies are legally restrained from such gouging.

Traditional cab companies have serious problems as well, of course. Cabbies are independent contractors who lease their cars and must pay for their own gas. They are among the lowest paid workers in the area. But Uber makes money by shifting even more costs onto drivers. As independent contractors, Uber drivers, who own their own cars, must pay for insurance, gasoline, and car maintenance. Uber takes 25 percent of each fare and expects the drivers to pay for everything out of what’s left. Some Uber drivers complain about not even earning minimum wage, once their expenses are factored in.

When Uber first got started, it knew that drivers were using personal auto insurance when they were supposed to buy special policies for cars that carry commercial passengers. It allowed drivers to pick up passengers at airports where Uber was prohibited from operating. Under threat of law suits and prosecution, Uber now complies with many, but not all, applicable laws.

Uber calls its policies “disruption.” But its concept of disruption reflects a right-wing libertarianism that really only seeks to replace one set of corporations with another. That right-wing view carries over into employee relations. Uber has come under strong criticism for lack of people of color in its management and higher-ups.

In January, Uber unilaterally lowered rates in 100 cities by 15 percent, which also meant less money for drivers. Angry Uberites held protest rallies in New York.

Frankfurt, Paris, and other European cities have banned Uber for failing to provide training, health benefits, and decent wages afforded to traditional cab drivers. Many European countries prefer that workers be employed by a company—full or part time—rather than work as powerless independent contractors.

There is a similar effort in the United States as well. In December the Seattle City Council voted to allow Uber drivers to unionize and required the company to provide driver’s names to unions or nonprofits seeking to organize. In mid-March a bill was introduced in the California Legislature to allow groups of 10 or more independent contractors working for hosting platforms like Uber and Lyft to unionize for workplace protection.

Uber drivers in San Francisco have filed a class action lawsuit in federal court arguing that Uber has violated a number of federal laws. For example, the suit notes that Uber publicizes that tips are included in the fare, but no tips are given to drivers. The suit also argues that drivers should be treated as regular employees, not contractors.

If the California legislation or the lawsuit succeed, Uber may be forced to significantly revise its business model by paying hourly wages, health care, and pensions. Workers could unionize. The lawsuits will not be resolved for years if either side appeals to higher courts. In the meantime, the battle continues at the city and local levels.

I welcome Uber to downtown Oakland if it changes the business model to improve the lives of its drivers. And it wouldn’t hurt to stop the Orwellian vocabulary tricks. Uber doesn’t share or disrupt; it maximizes profits and breaks laws to favor its version of capitalism. Let’s start the conversation there.

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The new Miles Davis biopic, Miles Ahead, starring Don Cheadle opens in the East Bay April 15. Haven’t seen it yet, but hope springs eternal.

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Conleth Hill and Frances McDormand offer outstanding performances as Mr. and Mrs. Macbeth at the Berkeley Rep playing through April 10. Her “out damn spot” soliloquy chills the spine.

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Oakland journalist Reese Erlich writes this arts and culture column every month. Follow him on Twitter @ReeseErlich, on Facebook (https://www.facebook.com/reese.erlich) or contact him by email, ReeseErlich2@hotmail.com

Faces of the East Bay