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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="["author","click", "Richard (R.J.) Eskow"]">Richard (R.J.) Eskow</a></span>
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<p class="topics">Topics: <a href="/topic/uber" class="gaTrackLinkEvent" data-ga-track-json="["topic", "click", "uber"]">uber</a>,
<a
href="/topic/libertarians" class="gaTrackLinkEvent" data-ga-track-json="["topic", "click", "libertarians"]">libertarians</a>, <a href="/topic/sydney" class="gaTrackLinkEvent" data-ga-track-json="["topic", "click", "sydney"]">Sydney</a>,
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data-ga-track-json="["topic", "click", "sharing_economy"]">sharing economy</a>,
<a
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>
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<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:
<span
style="font-size: 13px;">“We are all concerned with events in CBD. Fares have increased to encourage
more drivers to come online & 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 & pick up passengers in the area.”</em>
</p>
<div class="recirc2"></div>
<hr/>
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<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.
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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