Travis Kalanick has been making headlines since Uber’s launch and not necessarily because of the company’s potential, but because of Travis’ aggressive strategy for making Uber the number one car hailing app on the planet.
Silicon Valley’s start-up mentality has given a wide berth to founders like Steve Jobs whose personal foibles led to many conflicts within the company and at times brought Apple to the brink, but his overarching vision and bullish determination to make something “insanely great” overrode his character flaws and Apple rose to become a behemoth of industry.
Sure, Apple was ruthless and Jobs knew how to lock up a sector. My school’s computer program shut down shortly after Apple sued Franklin Computer Corporation for copyright infringement and won. We ran with Franklin Ace 1000s and couldn’t afford the Apple IIe.
However, it could be argued the Apple’s case was pivotal in that it was the first time an appellate court in the U.S. held that an operating system, and the machine code underneath, could be protected by copyright. Jobs set precedent for the industry and laid the foundation for his empire.
As a result of the efforts of Jobs and other pioneers like Bill Gates, a whole new consumer sector formed and jobs were created, making material contributions to the economy.
Kalanick is a maverick, not unlike Jobs. He pushes everybody passed their limits, but that’s where the similarity ends. Kalanick doesn’t want to change the world, he can’t even use his own service. He’s in it for the dollars. His respect for his own contribution amounted to calling it “Boob-er” in Vanity Fair for all the action he was getting because of the company.
I do not wish him ill or want to gloat over anything that has gone wrong with his life since he and Garrett Camp started UberCab in 2009, but the Uber story paints an ugly picture of Silicon Valley and foretells a frightening future for the rank-and-file worker.
Despite all the shenanigans such as the Grey Ball scandal and the rampant sexism and harassment, Uber is dangerous for a whole other reason. It says its opening an industry to serve a real need. That’s where this gets a little sketchy. Let’s face it, it’s a convenience, but here’s what that convenience will get us if Uber has its way.
The taxi industry is entrenched, that’s not up for debate. Most municipalities set limits on taxi licences and as a result, some can cost as much as a house, especially in Vancouver where taxi licences were reportedly going for $800,000 in 2014.
There is a noticeable void in service provision, I’m not arguing that either and I’m all for filling a need, but the system can be fixed. The problem with letting Uber do the fixing is the decimation of both collective bargaining and individual worker rights.
Uber’s classification of its drivers as independent contractors gives the company unfair advantage to compete in the market. There is one entity coming to town, not a local collective of drivers offering to fill the gap. Uber drivers are employees and the vehicles are assets, but because it’s an app, Uber claims that somehow it is different and gets away without having to invest in a workforce and material overhead.
This gives Uber the ability to aggressively ply its trade in a way the competition is incapable of due to financial and legal constraints.
Uber offers the same services a taxi provider, it just pushed the responsibility and functionality outward. It claims that its empowering drivers, but as the inevitable price wars commence when the market saturates, individual drivers will suffer most while Uber will average out its losses through volume.
If individual drivers take all the physical risk, invest the hard capital and provide the revenue-generating labour, shouldn’t they own a piece of the company whether in paper, which would be a logistical nightmare, or quarterly dividend payments?
Look, Uber isn’t democratizing an industry, it isn’t socially responsible, it’s looting a privileged “need” through legal loopholes and using its ‘workforce’ to build enough capital attraction for the eventual elimination of drivers all together.
As apps, like Uber and Airbnb, fuel the gig economy we need to be acutely aware of how the new way is subtly and irreversibly changing the relationship between individual workers and their employment. Will the loss of collective bargaining decimate the working class? Should companies like Uber keep the ability to legally separate themselves from their working arm? Should Uber be held accountable for the nefarious things it did for market share and its blatant disregard for authority? Should our gig economy have a universal set of workers’ rights?
Whether Kalanick is a good human being and Uber is better than taking a taxi seems almost insignificant to the deeper questions this whole mess poses.
FULL DISCLOSURE: The author has no connection to any of the companies named in this article.Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.