Will Wilkinson on Uber

December 20, 2014 – 12:46 pm by John

I liked this piece by Will Wilkinson at the Daily Dish on the taxi company Uber, the ignorant reactions to its "surge" pricing, and the calls for it to be dissolved into a worker collective:

There’s something about Uber, the popular ride-sharing service, that brings out the nutty in people. During the awful hostage situation yesterday in downtown Sydney, the volume of people trying to get out of Dodge by beckoning an Uber car kicked the app’s surge pricing into effect. This is most sensible. You see, the increase in demand (and no doubt the dangerous conditions) had reduced the supply of available drivers, leaving many of those desiring a car without one. Surge pricing sweetens the deal for drivers, drawing idle supply into action, helping to ensure that those who want service can get it. This does not amount to the exploitation of a dire situation. It is the best way to ameliorate it. The alternative to temporarily higher prices is a total lack of cars, not a bunch of open cars at normal non-surge pricing.
[emphasis mine]

In response to Mike Konczal and Bryce Covert's suggestion to socialize Uber by dissolving its corporate structure and giving ownership to the workers (drivers), Wilkinson writes,

There’s perhaps a problem or two with this proposal. “It takes an entrepreneur to start up ride-sharing,” Konczal and Covert write, “but not to run it as a firm. A worker collective is the obvious transition.” A system in which entrepreneurship is routinely rewarded with a forced “transition” to a worker collective is a system that is unlikely to continue to producing a valuable of entrepreneurial innovation.

But I really do like the idea of the drivers getting a bigger share of the profits. If it’s true, as they say, that “Newer ride-share ventures can piggyback on Uber’s success and take advantage of these new terms,” then it seems that Uber and Lyft drivers ought to be able to organize, finance the creation of a new app (no big deal, it would seem), and then dominate the market by charging less than those awful, useless, Silicon Valley tech-bro rentiers, all the while getting paid more. Why go through the tumult of trying to socialize Uber when a worker collective would so clearly out-compete Uber? Or maybe it’s not so clear that it would. Maybe organizing drivers, developing, maintaining, and continuously improving an app, doing all the necessary marketing, and managing the whole system isn’t really such a breeze, and by the time you take into account all those costs, which worker-collective drivers would have to cover, they’d end up keeping something in the neighborhood of 80% of their fares, just like Uber drivers. That’s my hunch.

There's nothing wrong with a worker-owned collective, nor with the corporate structure of Uber as it actually exists. I agree with Wilkinson's conclusion that "a more worker-centric Uber seems like a neat idea, and the prospect of developing one from the ground up, no matter how unlikely it may be, seems a lot less unlikely than simply stealing Uber." I wonder: if the worker-collective structure is so much more desirable, efficient, or otherwise better, why didn't a sort of free-agent taxi company arise with such a structure to begin with instead of Uber and Lyft, or why won't one yet arise to compete with or replace them? I don't doubt there are myriad laws making the formation and success of either type of company extremely difficult. We've all heard about Uber's legal battles in its effort to be allowed to compete with "medallion" taxi companies. Maybe a well-funded corporate core with a strong legal team was necessary for Uber to get a foothold in the market to begin with, thanks to the cronyist laws protecting traditional taxi companies. But I fail to see how eliminating all of those laws would put Uber at a disadvantage compared to a hypothetical worker-collective taxi service. It would only be disadvantaged if the drivers could earn more money and/or have more job security in a worker collective...which is already either true or not true, so why doesn't one form? Or maybe those two conditions will become easier to meet as time goes on?

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