The Silicon Valley gospel of “disruption” has descended into caricature, but, at its core, there are some sound tactics buried beneath the self-serving bullshit. A lot of our systems and institutions are corrupt, bloated, and infested with cream-skimming rentiers who add nothing and take so much.
Take taxis: there is nothing good about the idea that cab drivers and cab passengers meet each other by random chance, with the drivers aimlessly circling traffic-clogged roads while passengers brave the curb lane to frantically wave at them. Add to that the toxic practice of licensing cabs by creating “taxi medallions” that allow businesspeople (like erstwhile Trump bagman Michael Cohen) to corner the market on these licenses and lease them to drivers, creaming off the bulk of the profits in the process, leaving drivers with barely enough to survive.
So enter Uber, an app that allows drivers and passengers to find each other extremely efficiently, that gives drivers realtime intelligence about places where fares are going begging, and which bankrupts the rent-seeking medallion speculators almost overnight.
Of course, Uber also eliminates safety checks for drivers (and allows them to illegally discriminate against people with disabilities, people of color, and other marginalized groups); it used predatory pricing (where each ride is subsidized by deep-pocketed, market-cornering execs) to crush potential competitors, and games the regulatory and tax system.
Uber (and its Peter-Thiel-backed rival Lyft) are not good companies. They’re not forces for good. But the system they killed? Also not good.
In 2016, the City of Austin played a game of high-stakes chicken with Uber and Lyft. Austin cab drivers have to get fingerprinted as part of a criminal records check, and Austin wanted Uber and Lyft drivers to go through the same process.
Uber and Lyft violently objected to this. They said it would add a needless barrier to entry that would depress the supply of drivers, and privately, they confessed their fear that giving in to any regulation, anywhere, would open the door to regulation everywhere. They wanted to establish a reputation for being such dirty fighters that no city would even try to put rules on them.
(Notably, Uber and Lyft did not make any arguments about criminal background checks perpetuating America’s racially unjust “justice system” in which people of color are systematically overpoliced and then railroaded into guilty pleas.)
Austin wasn’t intimidated. They enacted the rule, and Uber and Lyft simply exited the city, leaving Austin without any rideshare at all. All the drivers and passengers who’d come to rely on Lyft and Uber were out of luck.
But the drivers were undaunted. They formed a co-operative and in months, they had cloned the Uber app and launched a new business called Ride Austin, which is exactly like Uber: literally the same drivers, driving the same cars, and charging the same prices. But it’s also completely different from Uber: the drivers own this company through a worker-owned co-op. They take home 25% more per ride than they made when they were driving for Uber. Uber and Lyft drivers commute into Austin from as far away as San Antonio just to drive for Ride. That’s how much better driving for a worker co-op is. [Continue reading…]