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- <span class="toLocalTime" data-tlt-epoch-time="1422791820">Sunday, Feb 1, 2015 11:57 AM UTC</span> </span>
- <h1>
- The sharing economy is a lie: Uber, Ayn Rand and the truth about tech and libertarians </h1>
-
- <h2>
- Disruptive companies talk a good game about sharing. Uber's really just an under-regulated company making riches </h2>
- <span class="byline"><a href="http://www.salon.com/writer/richard_r_j_eskow/" rel="author" class="gaTrackLinkEvent" data-ga-track-json="[&quot;author&quot;,&quot;click&quot;, &quot;Richard (R.J.) Eskow&quot;]">Richard (R.J.) Eskow</a></span>
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- <p class="topics">Topics: <a href="/topic/uber" class="gaTrackLinkEvent" data-ga-track-json="[&quot;topic&quot;, &quot;click&quot;, &quot;uber&quot;]">uber</a>,
- <a
- href="/topic/libertarians" class="gaTrackLinkEvent" data-ga-track-json="[&quot;topic&quot;, &quot;click&quot;, &quot;libertarians&quot;]">libertarians</a>, <a href="/topic/sydney" class="gaTrackLinkEvent" data-ga-track-json="[&quot;topic&quot;, &quot;click&quot;, &quot;sydney&quot;]">Sydney</a>,
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- data-ga-track-json="[&quot;topic&quot;, &quot;click&quot;, &quot;sharing_economy&quot;]">sharing economy</a>,
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- href="http://www.salon.com/category/technology/" rel="tag">Technology News</a>
- </p>
- <div class="featuredMedia"><a class="lightBox" title="The sharing economy is a lie: Uber, Ayn Rand and the truth about tech and libertarians"
- href="http://media.salon.com/2014/12/uber_rand_paul.jpg"><img alt="The sharing economy is a lie: Uber, Ayn Rand and the truth about tech and libertarians" title="The sharing economy is a lie: Uber, Ayn Rand and the truth about tech and libertarians" src="http://media.salon.com/2014/12/uber_rand_paul.jpg"/></a>
- <span
- class="caption">Ayn Rand, Rand Paul <span class="photoCredit">(Credit: AP/Manuel Balce Ceneta/Photo montage by Salon)</span></span>
- </div>
- <div class="articleContent">
- <p>Horror stories about the increasingly unpopular taxi service Uber have
- been commonplace in recent months, but there is still much to be learned
- from its handling of the recent hostage drama in downtown Sydney, Australia.
- We’re told that we reveal our true character in moments of crisis, and
- apparently that’s as true for companies as it is for individuals.</p>
- <div
- id="ym_1007925900364593340" class="ym"></div>
- <div class="recirc1"></div>
- <p>A number of experts have challenged the idea that the horrific explosion
- of violence in a Sydney café was “terrorism,” since the attacker was mentally
- unbalanced and acted alone. But, terror or not, the ordeal was certainly
- terrifying. Amid the chaos and uncertainty, the city believed itself to
- be under a coordinated and deadly attack.</p>
- <p>Uber had an interesting, if predictable, response to the panic and mayhem:
- It raised prices. A lot.</p>
- <p>In case you missed the story, the facts are these: Someone named Man Haron
- Monis, who was considered mentally unstable and had been investigated for
- murdering his ex-wife, seized hostages in a café that was located in Sydney’s
- Central Business District or “CBD.” In the process he put up an Islamic
- flag – “igniting,” as <a href="http://www.reuters.com/article/2014/12/15/us-australia-security-idUSKBN0JS0WX20141215">Reuters</a> reported,
- “fears of a jihadist attack in the heart of the country’s biggest city.”</p>
- <p>In the midst of the fear, Uber stepped in and tweeted this announcement:&nbsp;
- <span
- style="font-size: 13px;">“We are all concerned with events in CBD. Fares have increased to encourage
- more drivers to come online &amp; pick up passengers in the area.”</span>
- </p>
- <p>As <a href="http://mashable.com/2014/12/14/uber-sydney-surge-pricing/">Mashable </a>reports,
- the company announced that it would charge a minimum of $100 Australian
- to take passengers from the area immediately surrounding the ongoing crisis,
- and prices increased by as much as four times the standard amount. A firestorm
- of criticism quickly erupted – “<a href="https://twitter.com/Uber_Sydney">@Uber_Sydney</a> stop
- being assholes,” one Twitter response began – and Uber soon found itself
- offering free rides out of the troubled area instead.</p>
- <p>What can we learn from this incident? Let’s start by parsing that tweet:</p>
- <p><em>“We are all concerned with events in CBD …”</em>
- </p>
- <p>That opener suggests that Uber, as part of a community under siege, is
- preparing to respond in a civic manner.<em></em>
- </p>
- <p><em>“… Fares have increased to encourage more drivers to come online &amp; pick up passengers in the area.”</em>
- </p>
- <div class="recirc2"></div>
- <hr/>
- <div data-position-name="300-mi1" class="adPosition bigBox ad-300-mi1 flex"></div>
- <hr/>
- <div class="toggle-group target hideOnInit" data-toggle-group="story-13850779">
- <p>But, despite the expression of shared concern, there is no sense of <em>civitas</em> to
- be found in the statement that follows. There is only a transaction, executed
- at what the corporation believes to be market value. Lesson #1 about Uber
- is, therefore, that in its view there is no heroism, only self-interest.
- This is Ayn Rand’s brutal, irrational and primitive philosophy in its purest
- form: altruism is evil, and self-interest is the only true heroism.<em></em>
- </p>
- <p>There was once a time when we might have read of “hero cabdrivers” or
- “hero bus drivers” placing themselves in harm’s way to rescue their fellow
- citizens. For its part, Uber might have suggested that it would use its
- network of drivers and its scheduling software to recruit volunteer drivers
- for a rescue mission.<em></em>
- </p>
- <p>Instead, we are told that Uber’s pricing surge <em>was</em> its expression
- of concern. Uber’s way to address a human crisis is apparently by letting
- the market govern human behavior, as if there were (in libertarian economist
- Tyler Cowen’s phrase) “markets in everything” – including the lives of
- a city’s beleaguered citizens (and its Uber drivers). <em></em>
- </p>
- <p>Where would this kind of market-driven practice leave poor or middle-income
- citizens in a time of crisis? If they can’t afford the “surged” price,
- apparently it would leave them squarely in the line of fire. And come to
- think of it, why would Uber drivers value their lives so cheaply, unless
- they’re underpaid? <em></em>
- </p>
- <p>One of the lessons of Sydney is this: Uber’s philosophy, whether consciously
- expressed or not, is that life belongs to the highest bidder – and therefore,
- by implication, the highest bidder’s life has the greatest value. Society,
- on the other hand, may choose to believe that every life has equal value
- – or that lifesaving services should be available at affordable prices. <em></em>
- </p>
- <p>If nothing else, the Sydney experience should prove once and for all that
- there is no such thing as “the sharing economy.” Uber is a taxi company,
- albeit an under-regulated one, and nothing more. It’s certainly not a “ride
- sharing” service, where someone who happens to be going in the same direction
- is willing to take along an extra passenger and split gas costs. A ride-sharing
- service wouldn’t find itself “increasing fares to encourage more drivers”
- to come into Sydney’s terrorized Central Business District. <em></em>
- </p>
- <p>A “sharing economy,” by definition, is lateral in structure. It is a peer-to-peer
- economy. But Uber, as its name suggests, is hierarchical in structure.
- It monitors and controls its drivers, demanding that they purchase services
- from it while guiding their movements and determining their level of earnings.
- And its pricing mechanisms impose unpredictable costs on its customers,
- extracting greater amounts whenever the data suggests customers can be
- compelled to pay them.<em></em>
- </p>
- <p>This is a top-down economy, not a “shared” one.<em></em>
- </p>
- <p>A number of Uber’s fans and supporters defended the company on the grounds
- that its “surge prices,” including those seen during the Sydney crisis,
- are determined by an algorithm. But an algorithm can be an ideological
- statement, and is always a cultural artifact. As human creations, algorithms
- reflect their creators. <em></em>
- </p>
- <p>Uber’s tweet during the Sydney crisis made it sound as if human intervention,
- rather than algorithmic processes, caused prices to soar that day. But
- it doesn’t really matter if that surge was manually or algorithmically
- driven. Either way the prices were Uber’s doing – and its moral choice.<em></em>
- </p>
- <p>Uber has been strenuously defending its surge pricing in the wake of accusations
- (apparently <a href="http://gothamist.com/2012/11/04/uber.php">justified</a>)
- that the company enjoyed windfall profits during Hurricane Sandy. It has
- now promised the state of New York that it will cap its surge prices (at
- three times the highest rate on two non-emergency days). But if Uber has
- its way, it will soon enjoy a monopolistic stranglehold on car service
- rates in most major markets. And it has demonstrated its willingness to
- ignore rules and regulations. That means<em> </em>predictable and affordable
- taxi fares could become a thing of the past. <em></em>
- </p>
- <p>In practice, surge pricing could become a new, privatized form of taxation
- on middle-class taxi customers.<em></em>
- </p>
- <p>Even without surge pricing, Uber and its supporters are hiding its full
- costs. When middle-class workers are underpaid or deprived of benefits
- and full working rights, as Uber’s <a href="http://www.businessinsider.com/uber-drivers-say-theyre-making-less-than-minimum-wage-2014-10">reportedly are</a>,
- the entire middle-class economy suffers. Overall wages and benefits are
- suppressed for the majority, while the wealthy few are made even richer.
- The invisible costs of ventures like Uber are extracted over time, far
- surpassing whatever short-term savings they may occasionally offer.<em></em>
- </p>
- <p>Like Walmart, Uber underpays its employees – many of its drivers <em>are</em> employees,
- in everything but name – and then drains the social safety net to make
- up the difference. While Uber preaches libertarianism, it practices a form
- of corporate welfare. It’s reportedly <a href="http://www.washingtonpost.com/blogs/wonkblog/wp/2014/11/17/why-uber-loves-obamacare/">celebrating Obamacare</a>,
- for example, since the Affordable Care Act allows it to avoid providing
- health insurance to its workforce. But the ACA’s subsidies, together with
- Uber’s often woefully insufficient wages, mean that the rest of us are
- paying its tab instead. And the lack of income security among Uber’s drivers
- creates another social cost for Americans – in lost tax revenue, and possibly
- in increased use of social services. <em></em>
- </p>
- <p>The company’s war on regulation will also carry a social price. Uber and
- its supporters don’t seem to understand that<em> </em>regulations exist
- for a reason. It’s true that nobody likes excessive bureaucracy, but not
- all regulations are excessive or onerous. And when they are, it’s a flaw
- in execution rather than principle. <em></em>
- </p>
- <p>Regulations were created because they serve a social purpose, ensuring
- the free and fair exchange of services and resources among all segments
- of society. Some services, such as transportation, are of such importance
- that the public has a vested interest in ensuring they will be readily
- available at reasonably affordable prices. That’s not unreasonable for
- taxi services, especially given the fact that they profit from publicly
- maintained roads and bridges.<em></em>
- </p>
- <p>Uber has presented itself as a modernized, efficient alternative to government
- oversight. But it’s an evasion of regulation, not its replacement. As
- <a
- href="http://fusion.net/story/33680/the-inside-story-of-how-the-uber-portland-negotiations-broke-down/">Alexis Madrigal</a>reports, Uber has deliberately ignored city regulators
- and used customer demand to force its model of inadequate self-governance
- (my conclusion, not his) onto one city after another.<em></em>
- </p>
- <p>Uber presented itself as a refreshing alternative to the over-bureaucratized
- world of urban transportation. But that’s a false choice. We can streamline
- sclerotic city regulators, upgrade taxi fleets and even provide users with
- fancy apps that make it easier to call a cab. The company’s binary presentation
- – us, or City Hall – frames the debate in artificial terms.<em></em>
- </p>
- <p>Uber claims that its driver rating system is a more efficient way to monitor
- drivers, but that’s an entirely unproven assumption. While taxi drivers
- have been known to misbehave, the worldwide litany of complaints against
- Uber drivers – for everything from dirty cars and <a href="http://consumerist.com/2014/07/30/uber-passenger-complains-of-spider-bite-in-filthy-car/">spider bites</a> to
- <a
- href="http://www.forbes.com/sites/ellenhuet/2014/09/30/uber-driver-hammer-attack-liability/">assault with a hammer</a>, <a href="http://www.businessinsider.com/uber-nikki-williams-2014-12">fondling</a> and
- <a
- href="http://www.businessinsider.com/an-uber-driver-allegedly-raped-a-female-passenger-in-boston-2014-12">rape</a>– suggest that Uber’s system may not work as well as old-fashioned
- regulation. It’s certainly not noticeably superior.<em></em>
- </p>
- <p>In fact, <a href="http://www.huffingtonpost.com/2014/12/09/uber-california-lawsuit_n_6298206.html">prosecutors in San Francisco and Los Angeles</a> say
- Uber has been lying to its customers about the level and quality of its
- background checks. The company now promises it will do a better job at
- screening drivers. But it <a href="http://consumerist.com/2014/12/18/uber-reportedly-revamping-security-wont-say-exactly-what-its-doing/">won’t tell us</a> what
- measures its taking to improve its safety record, and it’s <a href="http://consumerist.com/2014/12/18/uber-reportedly-revamping-security-wont-say-exactly-what-its-doing/">fighting the kind of driver scrutiny</a> that
- taxicab companies have been required to enforce for many decades. <em></em>
- </p>
- <p>Many reports suggest that beleaguered drivers don’t feel much better about
- the company than victimized passengers do. They tell <a href="http://qz.com/299655/why-your-uber-driver-hates-uber/">horror stories</a> about
- the company’s hiring and management practices. Uber <a href="http://www.salon.com/2014/09/03/uber_unrest_drivers_in_los_angeles_protest_the_slashing_of_rates/">unilaterally slashes drivers’ rates</a>,
- while claiming they don’t need to unionize. (The <a href="http://www.fastcompany.com/3037371/the-teamsters-of-the-21st-century-how-uber-lyft-and-facebook-drivers-are-organizing">Teamsters</a> disagree.) <em></em>
- </p>
- <p>The company also pushes<a href="http://thinkprogress.org/economy/2014/11/06/3589715/uber-lending-investigation/"> sketchy, substandard loans</a> onto
- its drivers – but hey, what could go wrong?<em></em>
- </p>
- <p>Uber has many libertarian defenders. And yet, it <a href="http://pando.com/2014/10/29/uber-prs-latest-trick-impersonating-its-drivers-and-trying-to-scam-journalists/">deceives the press</a> and
- <a
- href="http://www.slate.com/blogs/the_slatest/2014/11/17/uber_exec_suggests_using_personal_info_against_journalists.html">threatens to spy on journalists</a>, <a href="http://money.cnn.com/2014/08/04/technology/uber-lyft/">lies to its own employees</a>,
- keeps its practices a secret and routinely invades the privacy of civilians
- – sometimes merely for entertainment. (It has a tool, with the Orwellian
- name the “<a href="http://www.forbes.com/sites/kashmirhill/2014/10/03/god-view-uber-allegedly-stalked-users-for-party-goers-viewing-pleasure/">God View</a>,”
- that it can use for monitoring customers’ personal movements.) <em></em>
- </p>
- <p>Aren’t those the kinds of things libertarians say they hate about <em>government</em>?<em></em>
- </p>
- <p>This isn’t a “gotcha” exercise. It matters. Uber is the poster child for
- the pro-privatization, anti-regulatory ideology that ascribes magical powers
- to technology and the private sector. It is deeply a political entity,
- from its Nietzschean name to its recent hiring of White House veteran David
- Plouffe. Uber is built around a relatively simple app (which relies on
- government-created technology), but it’s not really a tech company. Above
- all else Uber is an ideological campaign, a neoliberal project whose real
- products are deregulation and the dismantling of the social contract.<em></em>
- </p>
- <p>Or maybe, as that tweeter in Sydney suggested, they’re just assholes.<em></em>
- </p>
- <p>Either way, it’s important that Uber’s worldview and business practices
- not be allowed to “disrupt” our economy or our social fabric. People who
- work hard deserve to make a decent living. Society at large deserves access
- to safe and affordable transportation. And government, as the collective
- expression of a democratic society, has a role to play in protecting its
- citizens. <em></em>
- </p>
- <p>And then there’s the matter of our collective psyche. In her book “A Paradise
- Built in Hell: The Extraordinary Communities that Arise in Disaster,” Rebecca
- Solnit wrote of the purpose, meaning and deep satisfaction people find
- when they pull together to help one another in the face of adversity.&nbsp;
- But in the world Uber seeks to create, those surges of the spirit would
- be replaced by surge pricing.<em></em>
- </p>
- <p>You don’t need a “God view” to see what happens next. When heroism is
- reduced to a transaction, the soul of a society is sold cheap. <em></em>
- </p>
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