Uber Wins a Battle With New York, Now It’s War

When New York Mayor Bill De Blasio talked of a Tale of Two Cities on the campaign trail, promising to address an epidemic of social inequality, he probably wasn’t expecting a viral app to drive a multibillion-dollar wedge through Gotham’s fault-lines of race and class.

But now De Blasio and city lawmakers have been blindsided by Uber’s corporate surge, forced to stall an attempt to cap the company’s expansion. The City Council has reportedly shelved for at least four months a proposal to limit Uber’s rate of growth (that is, slowing, not stopping, the expansion) for an assessment of its environmental and traffic impacts. Now the smartphone ridesharing app that traditional cabbies deem an “existential threat” will keep pouring thousands more cars and part-time drivers onto the streets, angling for digital ride-hailers.

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Supporters of the cap cited congestion concerns, a volatile pricing system that constantly fluctuates according to market demand, and the lack of regulatory controls on Uber’s “independent contractors.” These rideshare drivers are not technically employed by Uber, and are minimally regulated by the city whose transportation system the company is hellbent on “disrupting.” That means Uber gets “freedom” from payroll taxes, vehicle standards and workers’ compensation, while drivers are rewarded with “flexible” hours and “self-employment” (or what labor advocates call precarious schedules and zero corporate liability).

In lieu of the cap, Uber has agreed to disclose previously hidden data on its operations. But such “compromises” won’t dent the opposition of angry cabbies like Bill Ledour, who recently testified before the City Council:

“They want to make their own rules and their own standards and impose in the near future fares that will make [their] current sky-high surge pricing seem almost benevolent. New York is in periled. Don’t let the public be at the mercy of these economic terrorists…. [Uber’s expansion] will not only deprive drivers of livable income but undoubtedly add to traffic congestion, air pollution…and most of all impede lifesaving emergency vehicles. How many New Yorkers must die so Uber can live?”

The company nominally categorizes itself as a “black car” or livery service, but generally dodges local taxes and operates with virtually no regulatory pricing standards. (By contrast, the city sharply caps the overall number of traditional cabs, monitors their environmental impacts, and limits permits through the exorbitantly priced “medallion” market.)

Globally, Uber’s ridesharing platform has brought tens of thousands of drivers onto city streets in more than 50 countries, prompting taxi drivers to strike and protest from Paris to Tianjin.

In New York, Uber rivals the city’s yellow and green cabs and livery cars. Though those workers also face poor working conditions, they fear Uber’s contractor system—which promises higher incomes for self-enterprising drivers—will ultimately undermine the entire workforce by driving down wages across the market.

“Proliferating the streets with vehicles is Uber’s business model, it’s not a transportation policy,” says Bhairavi Desai, executive director of New York Taxi Workers Alliance, a labor group representing cabbies, livery drivers and some Uber drivers. Since Uber doesn’t invest in drivers as full employees, Desai argues, “the more cars there are covering the streets, especially during prime times, the better the chance Uber has to deduct a commission off that fare for themselves. So each individual driver will be earning less money, but Uber’s profits go up…. That’s why we call them Walmart on wheels.”

Uber’s $50 billion empire has grown explosively through the charm offensive of some 250 lobbyists, pressing cities to ease local regulations and marketing the brand as a slick icon of the “new economy.” Uber has pumped millions into its New York campaign ads, which pointedly showcase people of color celebrating Uber’s opportunities for self-enterprise (apparently aiming to poach from the mostly immigrant taxi workforce). Taking a populist tack, the company showers consumers with warnings like, “Mayor de Blasio’s plan to stop Uber will cost 10,000 jobs, hurt underserved areas and make wait times for Uber cars skyrocket.” (There’s even an app feature flashing gloomy predictions about the consequences of capping Ubermania, with slogans like “NO CARS—SEE WHY.”)

The public-relations blitzkrieg obscures Uber’s underlying neoliberal business model: Drivers, as contractors, lack many basic protections of federal labor law, and may have no legal recourse over injuries and other road mishaps, unlike their yellow-cabbie counterparts. Despite presenting itself as a neutral “invisible hand,” a digital platform that merely channels “peer-to-peer transctions,” Uber may wield the power to “fire” drivers arbitrarily by just cutting off access to the app with impunity.

With several pending lawsuits trying to hold Uber liable as an official employer, Uber’s legal relationship with drivers remains in flux. But pushback from drivers (even current Uber drivers stand to lose if their ride markets are diluted) is intensifying.

Many see Uber’s aggressive campaign in New York as a play to the national political stage; presidential candidates Jeb Bush and Hillary Clinton have been quizzed on their views about regulating the tech-driven “gig economy.”

“The issue has been elevated to the presidential campaign level,” Desai says. “And they want to send a message, that if you come after us, we will come after you, and here’s a taste of what we are capable of doing.”

As for Uber’s dogwhistle marketing toward communities of color (playing on longstanding tensions over individual cabbies’ refusing to pick up black customers), Bertha Lewis of the Black Institute was unimpressed. Uber’s true colors were exposed, she says, with its profiteering and brazen lobbying against the city’s mass-transit tax on for-hire vehicles:

“Those who don’t take yellow, to green or black [cabs], who take the subway, take the buses, as I do—those are the people that I deal with—pay your fair share—that’s all we’ve ever asked…. you’re actually going to turn around and look us in the face, and claim that you care about black people? No you don’t, ‘cause if you did, you would be able to support the transportation that most black people use. ”

Despite the setback on the Uber cap, activists are pushing ahead, campaigning not just to put the brakes on Ubernomics but to create a more equitable transportation infrastructure for all. Because what this divided city needs is not more ridesharing but wealth sharing, and there’s a long way to go on that front.