Wednesday 26 November 2014

Why you shouldn't use Uber or companies like it

Summary: Many "sharing economy" boosters love Uber because it's been so successful so quickly, disrupted entrenched monopolies and is trailblazing the changes needed for similar peer-to-peer enterprises to take off. But even if offering valuable, new solutions, not all businesses are worthy of support. Uber is a classic example of a business where profit matters more than people and social consequences. In this post, I'll collate various articles that expose Uber's unethical philosophy and practices, and by extension all profit-seeking transport enterprises with similar priorities. However, real ridesharing and carpooling are important enablers of going car-free, so I will also try and identify the best alternate options available.

Related Posts:
How to contribute to genuine, transformative sharing
TransportCamp Melbourne data, apps, links and ideas

1. Selected critiques of Uber's philosophy, values and practices
- Some articles to read on Uber's revealed philosophy and practices are listed below. A range of articles from many sources are listed in the Further Info section at the bottom.
Travis Shrugged: The creepy, dangerous ideology behind Silicon Valley’s Cult of Disruption
The moment I learned just how far Uber will go to silence journalists and attack women
The pro-Disruption argument goes like this: In a digitally connected age, there’s absolutely no need for public carriage laws (or hotel laws, or food safety laws, or… or…) because the market will quickly move to drive out bad actors. If an Uber driver behaves badly, his low star rating will soon push him out of business. Laws don’t exist merely to frustrate the business ambitions of coastal hipsters: They also exist to protect the more vulnerable members of society. Back home in London (where such statistics are available), 11 women a month are attacked in unlicensed cabs, and unlicensed drivers are responsible for a horrifying 80 percent of all stranger rapes. If Uber doesn’t have to follow licensing laws, then neither does any Tom, Dick, or Harry who chooses to paint the word “TAXI” on the side of his car, and start offering rides via the Internet. A disruptive CEO will shrug and insist that it’s not his fault that such criminals exist. “Just because there are people who want to rape, murder, or rob you shouldn’t prevent me from making another million dollars,” he’ll argue. 
The truth is, what Silicon Valley still calls “Disruption” has evolved into something very sinister indeed. Or perhaps “evolved” is the wrong word: The underlying ideology — that all government intervention is bad, that the free market is the only protection the public needs, and that if weaker people get trampled underfoot in the process then, well, fuck ‘em. Given their Randian origins, we kid ourselves if we think most Disruptive businesses are fighting government bureaucracy to bring us a better deal. A Disruptive company might very well succeed in exposing government crooks lining their pockets exploiting outdated laws, but that’s only so the Disruptor can line his own pockets through the absence of those same laws. A Disruptive company may give you free candy in your 50-dollar cab but, again, that’s only because doing so is good business. If poisoning that same candy suddenly becomes better business (like encouraging New York cab drivers to be distracted by their phones, or putting vulnerable people at risk of attack is better business)… well maybe that’s an option worth exploring too.
Travis Shrugged: The creepy, dangerous ideology behind Silicon Valley’s Cult of Disruption
- Note that PandoDaily and Sarah Lacy are not beyond ethical reproach themselves but much of their critique is based on undisputed facts. Whether other aspects of their Uber antipathy are personal will become evident given Uber's most significant adverse impacts also apply to its competitiors like Lyft.

2. Uber wants to dominate transport but externalise any adverse impacts and disown responsibility
- Putting its philosophy into practice, means a single minded focus on capturing markets and profit while deliberately externalising all adverse impacts and risks. By legally protecting itself from these risks Uber isn't eliminating them it's just ensuring they are not effectively mitigated:
Is Uber the worst company in Silicon Valley? The taxi app company has proved to be one of the most aggressive of the new generation of tech startups – showing a willingness to take “disruption” to new heights. Governments, states, taxi drivers, tax authorities, rivals, even blind people – all have come up against Uber and lost. The company is currently being sued in San Francisco by the family of a six-year-old girl who was killed by an Uber driver. The company claims its driver was not performing an Uber ride at the time, but the family argue he was on the road because he was working for Uber. The company has been sued by the National Federation of the Blind for allegedly refusing rides once the driver saw the passenger had a service dog. Worryingly, Kalanick’s sharp-elbowed approach works, as far as investors are concerned, and it comes as Silicon Valley eyes an ever larger share of the “1099 economy” – self-employed people often engaged in the service industry. Taxi drivers, laundry workers and home cleaners are just the first guinea pigs for a new breed of tech firms looking to make big business out of often low-paid workers. The Guardian: Is Uber the worst company in Silicon Valley?
See also:
Uber sued by family of six-year-old killed in San Francisco crash

3. Companies like Uber increase the incidence of distracted driving but evade liability for the deaths and injuries that result
- The clearest example of this was Uber's response to the preventable death of Sofia Liu caused by an Uber driver.
Uber driver Syed Muzzafar hit Sofia Liu and her family at a green light on New Year’s Eve, killing the girl and seriously injuring her mother and younger brother. Muzzafar has been charged with vehicular manslaughter and gross negligence. Because he did not have a passenger at the time of the crash, however, Uber argues that the company is not liable for any damages, as its drivers are freelance operators, not employees.
Uber sued by family of six-year-old killed in San Francisco crash
"Uber shares in the profits of its drivers and must share in the responsibility for the harms they cause," Dolan wrote in a statement. "The use of the Uber app. by drivers violates California laws designed to eliminate driver distraction. Drivers are constantly interacting with their mobile devices creating serious risk to both passengers and the community."
Sfist: Uber Sued For Wrongful Death Of 6-Year-Old Sofia Liu
Uber, Lyft, Sidecar – Distracted Drivers and Auto Accidents, Who’s to Blame?
Find Law: Ride Service Uber Sued Over Girl's Death

4. Companies like Uber don't care about their large contract workforces
- Despite its claims that it wants drivers to be paid more, its CEO is looking forward to being able to make the drivers obselete (thus their jobs and incomes too). Of course, driverless cars taking over are a tech fantasy but the aspiration is telling.
A day after Google unveiled the prototype for its own driverless vehicle, Kalanick was visibly excited at the prospect of developing a fleet of driverless vehicles, which he said would make car ownership rare. "The reason Uber could be expensive is because you're not just paying for the car — you're paying for the other dude in the car," Kalanick said. "When there's no other dude in the car, the cost of taking an Uber anywhere becomes cheaper than owning a vehicle. So the magic there is, you basically bring the cost below the cost of ownership for everybody, and then car ownership goes away." Asked about what he would tell the Uber drivers who will some day replaced, Kalanick said that day was still a long way off. But it's also inevitable, he said. "I'd say 'Look, this is the way of the world, and the world isn't always great.'
Uber will eventually replace all its drivers with self-driving cars
- The bigger issue with Uber and similar companies is their use of freelance or labour-hire workforces that aren't directly employed and have no rights, benefits or protections as employees of the company. These disposable contractors can be subjected to all sorts of unfair and exploitative practices:
Was my house cleaner — the one I'd hired through a company that has raised $40 million in venture-capital funding from well-respected firms like Google Ventures, the one who was about to perform arduous manual labor in my house using potentially hazardous cleaning chemicals — homeless? To explain why it's possible for a cash-flush tech start-up to have homeless workers, it helps to know that the man I hired through Homejoy wasn't a Homejoy employee at all. That's because Homejoy doesn't employ any cleaners — like many of its peer start-ups, it uses an army of contract workers to do its customers' bidding. To hear Homejoy tell it, it's simply the digital middleman that allows people seeking home-cleaning services to find people willing to do it.
NYMag: Does Silicon Valley Have a Contract-Worker Problem?
See also:
> Slate: In Search of Uber’s Unicorn

5. Companies like Uber push exploitative deals like subprime loans that impoverish their drivers
- As I've explained on this blog (e.g. link1, link2), the cost of owning and running a car is massive and underestimated by virtually everyone. The worst thing you can do is to own more cars than you need, upgrade them more often than necessary and to own expensive cars that are costly to run, maintain and repair. Yet these high costs simply represent another wealth-extracting opportunity for rapacious companies that don't care about the outcomes for people, including the people that work for them.

- Uber exemplifies this ruthless exploitation by pushing its drivers to purchase new, more expensive cars using loans and lease agreements that are often not affordable (i.e. subprime):
The subprime lending market that plunged America into the Great Recession is back and as unscrupulous as ever. Instead of mortgages, this time a bubble has formed around auto loans, and reliably ruthless Uber is in the thick of it. Two "partners" in Uber's vehicle financing program are under federal investigation, but Uber hasn't slowed its aggressive marketing campaign to get drivers with bad credit to sign up for loans. The company has been bombarding drivers in San Francisco with email offers encouraging them to sign up for Uber's vehicle financing program—including one sent days after the latest subpoena. The most recent ones, obtained by Valleywag, open with the image of a car with cash literally flying out of the backseat. Uber promises drivers that it's "Easy to qualify, even with poor credit or no credit history at all." Valleywag: Uber and Its Shady Partners Are Pushing Drivers into Subprime Loans

- Note that all of Uber's competitors that share its philosophy of "profit/growth is all that matters" are just as bad. Uber's biggest current rival is Lyft and its practices are often as bad and sometimes worse:
Lyft is just as hungry, if not as cunning as Uber. In May, the company convinced drivers to pay $34,000 for "tricked-out" Lyft-branded Ford Explorers in order to launch a luxury service to compete with Uber. Five months later, Lyft canceled the service, leaving drivers with a weak bailout offer: Lyft will help sell the trucks or give drivers a $10,000 bonus, subject to income tax.
Valleywag: Uber and Its Shady Partners Are Pushing Drivers into Subprime Loans
See also:
Fortune: Uber banks on world domination
Lyft Guts Luxury Service, Sticking Drivers With $34,000 Custom SUVs
> Grist: The “sharing” economy cozies up to subprime auto loans

6. Companies like Uber exist to generate as much profit as feasible over the long run
- If Uber's users were ultimately going to save money over the long term by using Uber compared to their pre-Uber transport options then it would be hard to convince users not to keep using them. After all, self-interest typically wins out. However, Uber is a profit-maximising company and will innovate to extend its market and revenues in multiple ways - both obvious and insidious. Surge pricing is a prime example of the use of technology to solve supply and demand mismatches while bumping up profits. Uber customers shouldn't complain, it's what they should reasonably expect - in Uber's free market you need to pay enough to play. Any exceptions to this rule are only made in the interests of long-term profitability not suddenly deciding to abide by customer's ideas of fairness. I would predict that a large proportion of Uber users will spend more on Uber annually than they ever did on their pre-Uber transport options. Hopefully, the service quality and convenience is worth it.
> Above the Crowd: A Deeper Look at Uber’s Dynamic Pricing Model
> CityLab: Uber's Sydney Debacle Is Yet More Reason for Cities to Regulate It
Hey Uber, Here's A Solution To Your Surge Price Woes That Could Make You A Ton Of Money

7. Companies like Uber work against democracy, self-sufficiency, diversity, resilience and equity
- Neal Gorenflo from Shareable understands the true human and social values and dynamics at least as well as anyone, and applauds true Sharing Cities for rejecting Uber and its ilk:
One nation, one solution, one app uber alles is a failed 20th century dream, not the 21st century reality we need. The future belongs to enterprises that distribute control and wealth rather than concentrating it, and that's not a utopian dream, it's an increasingly practical necessity in order to attact and keep customers in a zero marginal cost world. Venture Capitalist Brad Burnham said as much at the SHARE conference in May as reported by the Wall Street Journal in an article entitled, "Why Uber and Airbnb Might be in Big Trouble."
Shareable: Why Banning Uber Makes Seoul Even More of a Sharing City
8. Best current rideshare alternatives to Uber in Melbourne
- The ethical response for individuals to such information should be to not use these company's services. After all, there are many alternatives for getting around; Uber isn't a necessity. The critical step is to delete the app from your smartphone - these deletions are tracked carefully by such companies and their investors.
> CIO: Five Good Reasons to Delete the Uber App Right Now
> NYTimes: To Delete or Not to Delete: That’s the Uber Question
> Time: Dismantling Tech’s Sexist Culture Isn’t Easy, But Deleting Uber Sure Is
> Twitter - #deleteuber

- I will update a list of rideshare and carpool alternatives for Melbourne as I identify them. I have yet to assess how ethical their business practices are, but they can't be worse than Uber. The model enterprise for Australia would be something like: "As a Social Enterprise, our primary focus is to help our members & partners to save money, reduce car ownership and create environmental benefit. Because Co-wheels is a Community Interest Company, we reinvest profit into our operations to expand the service." See: Co-wheels: About us

Taxi Alternatives / Short Rideshare:
> Ingogo
> Gocatch
> Hailo or Flywheel when they arrive in Australia
> ATIA Taxi Apps
> Choice: Taxi alternatives & booking apps

> Carpoolone

Car Next Door

Long Trip Rideshare:
> Coseats
> Share your Ride

Further Info:
Rideshare Companies & Organisations
> Uber; UberPool
> Lyft; Lyft Line
> Sidecar
> BlaBlaCar
> Carpooling
> Zimride
> Carma
> Bandwagon
> Hailo
> Flywheel
> Curb
> Summon
> Ridejoy
> Wundercar

> Car2go
> RelayRides
> Zipcar

Compare and Share: Australia
Startups List: Transportation Startups

The sharing economy is a lie: Uber, Ayn Rand and the truth about tech and libertarians

The Guardian
Is Uber the worst company in Silicon Valley?
Uber sued by family of six-year-old killed in San Francisco crash
Don't buy the 'sharing economy' hype: Airbnb and Uber are facilitating rip-offs

Pando Daily
Travis Shrugged: The creepy, dangerous ideology behind Silicon Valley’s Cult of Disruption
The moment I learned just how far Uber will go to silence journalists and attack women
Uber driver hits, kills six-year-old girl. Is “Not our problem” still an appropriate response?
The horrific trickle down of Asshole culture: Why I’ve just deleted Uber from my phone
Venture capital and the great big Silicon Valley asshole game
Uber seeing deja vu as riders complain of rate gouging following Caltrain fatality

Does Uber Even Deserve Our Trust?
What Are The Long-Term Implications Of This Latest Scandal At Uber?

The Verge
This is Uber's playbook for sabotaging Lyft
Uber the outlaw: a rogue startup fights the taxi power

Business Insider
All Hail The Uber Man! How Sharp-Elbowed Salesman Travis Kalanick Became Silicon Valley's Newest Star

Vanity Fair
Man and Uber Man

Can We Trust Uber?
The Immaturity and Arrogance of Uber

Does Silicon Valley Have a Contract-Worker Problem?

The Slippery Slope of Silicon Valley

The Conversation
Why criticism of Uber isn’t turning customers away – yet
Is Uber really in a fight to the death?

The Atlantic CityLab
The Strange Tale of an Uber Car Crash and What It Means for the Future of Auto Insurance

Why Banning Uber Makes Seoul Even More of a Sharing City

Modern Luxury SF Magazine: The Smartest Bro in the Room

Four Things About Uber You Wish You Never Knew
Riding Dirty: How Uber Takes Drivers and Passengers for a Ride | Nailed It!
People HATE UBER?! Here's Why!

Uber and Ridesharing Competition
Stratechery: Why Uber fights
> Both Sides of the Table: In defense of Uber


Sharing Economy
> MrTeacup: The Cult of Sharing

Recommended Overseas Examples
> Co-wheels U.K.

Australian Politicians
Andrew Leigh
Smoothing the way for the sharing economy