The fights that Uber and Lyft wage in cities like Austin look like local politics, but their actions often put corporate interests above local ones.
Photo: David Whitmer
The fights that platforms like Uber and Lyft wage in cities like Austin look like local politics, but their actions often put corporate interests above local ones.
Until earlier this month, Karl G. was an avid driver for Uber and Lyft in Austin. After the companies failed to leverage popular support against a new law requiring their drivers to pass fingerprint-based background checks in a vote on May 7th, they followed through on their promises and ceased operations in the city, claiming the requirement was too onerous. That left Karl and roughly 10,000 drivers upended. "It wasn't necessary," he said.
But for the global e-hail companies, an exit was, clearly, necessary. The companies have argued that fingerprinting-based background checks are flawed, time-consuming, and antithetical to their business model: scaling massively requires an aggressive minimization of on-boarding costs, including time, to ensure access to the largest possible pool of drivers.
Uber in particular has reported high worker turnover: according to an Uber-funded study by Jonathan Hall, Uber's head of policy research, and economist Alan B. Krueger, around half of all new drivers quit after a year. To oppose the ordinance in a referendum vote called Proposition 1, the two companies reportedly spent an unprecedented $8.6 million combined on lobbying and a political-style campaign to mobilize Austin voters—particularly riders and drivers—to rally against fingerprinting. Still, the companies lost the vote by 12 percentage points.
Uber already operates in two U.S. cities where drivers are required by law to get fingerprint background checks, New York and Houston. In Houston, Uber has argued, the fingerprinting requirement is responsible for a huge backlog of applicants, leading to 20,000 drivers dropping out of the signup process. (Lyft left Houston in 2014, and Uber has signaled that it might leave.) But in Austin, Uber and Lyft chose to draw a red line, and stuck to it in order to send a signal to other cities considering regulating or constraining their business model.
The showdown in Austin highlights a paradox for cities and citizens as peer-to-peer platforms like Uber and Lyft extend their operations. Their wide-reaching outreach campaigns mimic the style of local politics, waging attacks and appealing to and seeking our support as "constituents." But in practice, their actions don't necessarily represent our best interests.
After the companies withdrew their services on May 9th, Austinites, having become accustomed to the convenience of e-hail services, reported changing their plans and searching out alternatives. A "black market" between former Uber and Lyft drivers and their passengers is already booming on sites like Craigslist. To find work, some drivers tried commuting to San Antonio, where Uber and Lyft recently resumed operations after driver fingerprint-based background checks were made optional. Meanwhile, Austin's Transportation Department began helping newly-stranded drivers by setting up job fairs to connect them with other e-hail companies, and by organizing fingerprint-check stations around town.
Uber tries to frame itself as a pioneering business advocating in favor of innovation and community interests
"Disappointment does not begin to describe how we feel about shutting down operations in Austin," said Chris Nakutis, General Manager of Uber Austin, in a statement. "For the past two years, drivers and riders made ridesharing work in this great city. We're incredibly grateful. From rallies to phone banking to knocking on doors, they spread the word. Their support was humbling and inspiring." Lyft has not yet replied to a request for comment.
However, among the Uber and Lyft Austin drivers I've recently spoken with in interviews and in online forums—people whom the companies enlisted to help fight for Proposition 1—few particularly objected to the idea of fingerprint-based background checks for drivers, and some questioned the companies' motives.
"They claim that it was because of the background checks that would take too long and so on, but there is a timeframe from now to February 2017 for that, so they had a lot of time to do all the background checks," said Karl G, who is now signed up to work for GetMe, a local e-hail start-up. (His and other names have been changed to protect the identities of drivers from potential retaliation by their employers.) "They didn't need to shut down and leave the city like they did."
Thomas A., a former driver for both companies, said he believed Uber and Lyft took a stand against fingerprints because of high driver turnover rates. "I have no problem with doing it. I think most drivers would have been happy to do it. The problem is that Uber treats their drivers so bad that there's such a turnover that they have to constantly churn them. And the fingerprinting is just another hurdle for them to sign up." When asked to elaborate on bad treatment, Thomas described investing $25,000 in a vehicle to work for Uber and Lyft in 2014, but after five rate cuts, he'd gone from making $1.90/mile, for example, with UberX to $1.00/mile. After car payments, he says he's barely making ends meet.
John D., who lives outside the city limits of Austin and wasn't eligible to vote on Prop. 1, said he would have voted for it (that is, against fingerprint-based background checks), even though he has already gone through such a background check to get his chauffeur's license. But he noted the aggressiveness of Uber's campaign."They came out with these strong statements that if the city council passes this rule, we're out. And it came across as they were trying to bully the city council."
The fight points to a pervasive narrative that Uber—the most politically-visible player in the on-demand economy—perpetuates in its many battles against local authorities: that it represents and protects a political constituency of local consumers and workers seeking to "save Uber" from "anti-ridesharing interests." In short, Uber tries to frame itself not as an outsider attempting to fight local laws, but instead as a pioneering business advocating in favor of innovation and community interests.
That's an attractive argument: after all, Uber would be nothing without its riders and drivers. But in numerous cases, the interests of the platform and the interests of those using the platform are often farther apart than the company's political rhetoric would suggest.
The Austin showdown points to a complex challenge for cities and citizens as both platforms extend their reach: their users (drivers and passengers) are their "constituents," but their political actions at the local level don't necessarily represent the best interests of these citizens.
Even when cities step in to regulate e-hailing, Uber in particular has sometimes circumvented the power of local municipalities by lobbying for concessions at the state level that render local efforts relatively moot. In Indiana, for instance, cities looking to regulate e-hailing must defer to a state law passed in 2015. After a nearly $1-million lobbying effort last year, Uber is expected to seek legislation in the Texas state legislature that would preempt local regulations with an Uber-approved set of statewide standards that exclude fingerprinting requirements. (Austin city council members have also indicated the city was open to continuing talks with Uber and Lyft.)
During the Austin battle, "Ridesharing Works", a pro-Prop 1 political action committee that resembles grassroots campaigns, such as through coalitions with some local groups, but which is predominantly funded by Uber and Lyft, participated in public debates with Council Member Ann Kitchen and others. They also ran ads that have been described as misleading by the Austin Business Journal because they "make no mention of fingerprinting, urging instead for voters to approve Proposition 1 'to require Uber and Lyft to keep doing criminal background checks,' in an ad titled "Safety We Can Count On."
"State leaders need to hear from entrepreneurs like you," Uber has urged drivers, but the rhetoric of entrepreneurship rings hollow with them
If the campaign for Proposition 1 reflected the Bay Area-based companies' expanding political influence, its failure underlined their occasional misunderstanding of local culture and politics. A number of drivers commented that Uber and Lyft didn't account for the strong public support the city council enjoys. The companies' communications with users—largely through a torrent of robo-texts—were also seen as overly aggressive. (Uber is now facing a class-action lawsuit for allegedly violating the Telephone Consumer Protection act by sending thousands of unwanted text messages to its users.)
"The other thing that they did wrong," said John D., "I had a couple fares that day of the vote that said they changed their vote because Uber and Lyft sent them emails and texts everyday, they were not careful with how many they sent. I had two riders that said said this to me, that they changed their vote because they were getting emails and text messages every day and they got tired of it."
In other fights, Uber and Lyft have relied heavily upon in-app notices, text messages and emails—a tactic of mobilizing their users as unpaid political campaigners that Edward T. Walker, a sociologist at the University of California, calls "grassroots for hire." Uber's conflicts with some local governments, waged through these campaigns, are documented in a new report by Public Citizen, a non-profit advocacy group focused on consumer rights, "Disrupting Democracy: How Uber Deploys Corporate Power to Overwhelm and Undermine Local Government."
In Montreal, where Uber is facing legislation that would curb its business practices, when the passenger app is opened (in April 2016), users are met with a notice that reads "Save Uber In Quebec."
In April 2015, drivers in Sacramento, California received notices from Uber urging them to contact Assembly member Garcia to vote NO to state legislation AB 24, which would have imposed new restrictions on ride-sharing companies.
"State leaders need to hear from entrepreneurs like you," read the notices. "We don't have much time, and anti-ridesharing interests hope you'll stay quiet when this bill slips through the state Assembly—but we're confident that with your voice that won't be the case." (In the empirical research study of Uber drivers that I conducted over a 9-month period with Luke Stark, the rhetoric of entrepreneurship rang hollow with drivers. While drivers did value the flexibility of working when they want, the slogans Uber uses to characterize their work, like "be your own boss," did not translate into identities of entrepreneurship for drivers.)
Civil rights and safety arguments
To make its case against fingerprints, Uber has made a bid to ally with civil rights' causes that also supports its business goal of increasing the pool of drivers. In late Dec. 2015, Uber co-ordinated with the New Jersey NAACP to recruit 3,000 new drivers from low-income, minority neighborhoods. A few weeks later, in an effort to bolster its reputation for safe drivers, Uber made a public announcement about changing its hiring policy to include recruits with non-violent criminal histories, records that disproportionately hinder men of color in job applications.
While none of the ten drivers I interviewed in Austin had heard the argument that it would have a disproportionate impact on minorities, during the campaign the Austin branch of the NAACP and the Austin Area Urban League raised the issue, sending a letter to Council Member Ann Kitchen objecting to fingerprints.
"The practice of using fingerprints to access a background database is not a real safety measure as it all-too-often captures only an individual's arrest, not their conviction. As a result, this practice would disproportionately harm Austin's African-American and Hispanic populations as they are already disproportionately arrested, but not necessarily charged or convicted of any offense."
Uber used to promote its own background checks as "industry-leading," but eventually faced accusations from multiple regions for inadvertently hiring drivers with criminal records. Its claims of superior background checks resulted in a civil lawsuit which the company agreed to settle in February 2016 for $28.5 million. (Uber and Lyft provide a detailed overview of their respective driver screening and safety practices here and here.)
While all of the drivers I spoke with in Austin objected to Uber and Lyft's decision to leave, three of them argued that both companies provided better safety to passengers than taxis (which require fingerprint-based background checks) do, because they provide a picture of the driver, a license plate number, and a record of the trip.
"My take is, on Uber, when you request a driver you get a picture of that driver, a picture of his car and his license plate number," said John D. "That's to me, safer than jumping into a car that may or may not be a cab, could have been someone painted his car to look like a cab and all that. When you jump into a car with somebody from Uber or Lyft, there's a record that you're in that car with him, and you've got pictures to know you're getting in the right car. So they could have argued that that's safer than a cab with fingerprints. I think they argued the wrong point."
Despite the fight in Austin, Uber, but not Lyft, acceded to regulations in Houston and both acceded in New York, where fingerprinting is already the law. To drive in any of the five boroughs, the requirements are steep, and include a fingerprint-based background check and a drug test. The process can take up to 90 days for approval after the application is submitted. Yet, this hasn't stilled Uber's growth there: it boasts 25,000 vehicles dispatched per week, compared with 13,000 yellow cabs and 5,000 Lyft cars, as of January 2016. (For an analysis of this data, see here.)
I asked Uber and Lyft what the difference is in their respective reasoning towards Austin vs. NYC. In reply, Uber spokesperson Jessica Santillo noted "that over 30 states and over 55 cities have put in place commonsense ridesharing regulations that do not require fingerprinting." Lyft has not yet replied to a request for comment.
Meanwhile, in Calgary, Canada, the local government tried to regulate Uber drivers as well, requiring a $220 annual fee and licensing and background checks. Uber decided to pull out of Calgary, rather than agree to those terms and conditions, arguing that the $220 annual fee in particular was too onerous on drivers, and "unworkable" (a word Uber uses in a variety of markets to frame an objection to regulation) for the rideshare model. As Calgary Mayor Naheed Nenshi has pointed out, Uber could pay these fees on behalf of drivers; without the fee, he argues, the city would essentially be subsidizing Uber's operations
Uber has responded by urging its users to sign a petition to support Uber's position, and subsequently has engaged in marketing stunts, such as offering to deliver puppies, but not e-hail services, to anyone who requests an Uber, to drum up popular demand for its services. The fine print on the bottom of the petition also contracts Uber's supporters to give their consent for the use of their personal information in campaign materials, and exposes petitioners to the kinds of prospective robo-texts that Uber and Lyft users have received in Austin and elsewhere.
At their core, Uber and Lyft are using technology to mediate labor-consumer transactions—they rely on automation to manage a massive, distributed workforce in a diverse set of regional contexts. From the perspective of a user opening the app, the objective is to provide a clean, reliable, reliable experience wherever and whenever a car is called. The uniformity and seamlessness of user experience and the power of local political campaigns can lull us into a false sense that these platforms have the same interests everywhere, and that those interests are aligned with passengers and drivers. Particularly as more tech companies seek to replicate the successes that Uber and Lyft have had in other contexts, democracies must be alert to the evolving agendas being driven behind the scenes.
Alex Rosenblat is a researcher and technical writer for the Intelligence & Autonomy Initiative at Data & Society, a project supported by the John D. and Catherine T. MacArthur Foundation. She tweets @mawnikr.
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