Q: How did the “sharing economy” become a predatory landscape?
A: It’s simple; Capitalism is a predatory beast. Corporations will appropriate idealism, deceive customers, cheat workers, and squander good will in a New York Minute if doing so accrues value to shareholders and executives.
As Dean Baker wrote in CounterPunch several years ago, “… in their exuberance over the next big thing, many boosters [of the sharing economy] have overlooked the reality that this new business model is largely based on evading regulations and breaking the law.” He’s right about the criminality but his piece paints sharing with too broad a brush.
There’s an old Russian proverb that Trump and his minions should take to heart: “A fish rots from the head.” It’s redolent of the kind of moral decay that sets in when CEOs mistake market share, earnings and valuation for virtue. The stench that now pervades the entire economy is overpowering to everyone who doesn’t have a financial bubble to wall it out.
Uber, the (allegedly) $69B ride sharing company, is particularly odoriferous. It’s a poster child for how good, old-fashioned greed and exploitation can so rapidly invade the new, Net-enabled economy and devour its entrails.
Like any newcomer to a market, Uber offered come-ons, such as baiting new drivers with promises of lucrative per-mile rates that went down after they were corralled. It offered users lower rates for trips away from downtown (except to airports), but drivers are free to refuse them if a destination is too far from popular neighborhoods where they can charge the higher fares the company mandates during peak hours.
When New York taxi drivers—mostly immigrants themselves—called a strike in solidarity with a day of protest against Trump’s immigration ban by refusing to service NYC airports, what did Uber do? It told drivers to service airports at off-peak rates. Its CEO Travis Kalanick had already resigned from Trump’s Business Advisory Council, but was more than happy to demonstrate his solidarity with The Donald by simultaneously giving protesters the finger and cutting some of the money his NYC drivers could have made that day.
Of course, Uber isn’t the only ascendant cannibalistic enterprise. The world of startups is replete with would-be disrupters claiming they can create a better world by undermining time-honored pathways of work and play. Disruption, of course, is Uber’s stock in trade. It made no secret of its plan to propagate its cellphone app to upend the ride-hailing industry and put taxicab companies out of business everywhere. And a large swath of the mobile-equipped populace, sick of seedy cabs piloted by swarthy immigrants, cheered on by an innovation-happy media, was okay with that. Until recently.
First came a spate of Uber drivers who molested or came on to female passengers, echoing the company’s testosterone-fueled corporate culture. Last month, a recently departed Uber engineer named Susan Fowler, blogged that her manager had propositioned her for sex and that she’d taken the issue to human resources, accusing the company of having a culture of sexual predation. “When I joined Uber,” she noted, “the organization I was part of was over 25 percent women. By the time I was trying to transfer … this number had dropped down to less than 6 percent.” Uber’s response was to protect the manager and attempt to destroy her reputation, sending a message to users saying in part “Everyone at Uber is deeply hurting after reading Susan Fowler’s blog post.” All that did was to pour fuel on a campaign annotated #DeleteUber already burning its way across the Net that prompted 200,000+ users to uninstall their Uber apps.
Fowler’s exposé came just after Uber’s head of self-driving cars was slapped with a federal lawsuit for having stolen secret documents from Google. Then, just a day after Fowler went public, an Uber VP was forced to resign for not revealing he’d been let go by Google for sexual misconduct.
But it was Kalanick himself getting perped by a dashcam that finally shook things up. There he was in the back of one of his premium service black cars with two young ladies, cursing at his driver for having the temerity to complain about pay cuts. When the video was released by Bloomberg it went viral and promptly forced CEO Kalanick to publicly apologize to his driver, one Fawzi Kamel, who now may or may not be enjoying his new-found notoriety.
Kalanick went on to issue a mea culpa to his organization:
“…To say that I am ashamed is an extreme understatement. My job as your leader is to lead…and that starts with behaving in a way that makes us all proud. That is not what I did, and it cannot be explained away. It’s clear this video is a reflection of me—and the criticism we’ve received is a stark reminder that I must fundamentally change as a leader and grow up. This is the first time I’ve been willing to admit that I need leadership help and I intend to get it.”
Uber also has financial woes. It’s been bleeding money at an astounding rate, not because its ride-hailing business isn’t profitable but because of a spate of business acquisitions and its fixation on developing self-driving cars. Underlying all that is a fixation on a business model in which the quest for growth and market share overrides everything else. And grow it did, from a head count from four in San Francisco in 2009 to 11,000 worldwide now. The reported difficulties drivers and customers have in communicating with the company and by all accounts its chaotic, dysfunctional management teams in large part are a consequence of too rapid, non-organic growth.
Put all that together and Uber isn’t going to issue its long-awaited IPO anytime soon. And while Uber’s self-inflicted harm should serve as a cautionary tale for other executives, I doubt it will much influence the thinking of most Silicon Valley entrepreneurs and vulture capitalists. The ethos of launching a disruptive start-up, stirring up buzz, and flipping it so that the founders can do it again isn’t exactly visionary. It’s just business as usual in corporate America, where corporate growth is our most important product, even if it is also the ethos of a cancer cell.
Predatory beasts like Uber and Airbnb aside, a real sharing economy does exist. Some of it is new, other aspects of it are timeworn. Marjory Kelly, a business ethicist, says in Owning Our Future, something she calls the “generative economy” is “a corner of the economy (hopefully someday much more) that’s not designed for the extraction of maximum financial wealth. Its purpose is to create the conditions for life.” She’s talking about organizations like agricultural and industrial cooperatives and guilds, worker-owned companies, “benefit” corporations, community land trusts, social mission enterprises, and community-based enterprises enabled by nonprofit support and microlending.
Kelly characterizes the totality of such activity as a nascent movement, “an ownership revolution” all about “broadening economic power from the few to the many and about changing the mindset from social indifference to social benefit.” Neither capitalist nor communist, this multifaceted, decentralizing movement is happening all around us but rarely heralded. The adjective for it I like to use is communitarian.
One of the guiding lights of Codecademy is Douglas Rushkoff, a new media pioneer and a social and media critic. In Throwing Rocks at the Google Bus, from a similar but more tech-centric viewpoint as Kelly’s, he dissects the “extractive economy” to show how it concentrates wealth as it consumes commonwealth, squanders resources, stifles creativity, and simply isn’t sustainable. Rushkoff was on to Uber’s game well before the press woke up to it (and mostly still doesn’t get its venality). In the book, Rushkoff talks a lot about Uber. At one point, he compares it to a somewhat similar service called Sidecar, also a cellphone app:
Uber’s [app] is a corporate-driven world where speed and convenience trump socializing and planning. It exploits a platform monopoly to extract value from its users, while Sidecar attempts to help its users create and exchange value in a new way. Uber’s reviews and other capabilities are worth more to us in an anonymous landscape, where we are depending on this information to judge one another. Sidecar depends more on its users finding favorite drivers, engaging in repeat business, and setting up regular schedules.”
In his view, networks of riders and competition from more generative enterprises will keep Uber honest better than regulators can. But that didn’t happen for Sidecar. Its car doors closed at the end of 2015, after battles with authorities and competition from the likes of Uber. Its physical and intellectual assets were acquired by General Motors, which (along with sharks and Trump advisors Peter Thiel and Carl Icahn) has a substantial stake in Lyft. At this point GM could probably acquire Uber for a relative song to truly monopolize ride-hailing, which would be a fitting outcome in our extractive economy.
And speaking of ride-hailing, whatever became of hitchhiking?