From Logic Magazine:
Veena Dubal is an Associate Professor of Law at the
University of California, Hastings.
Her research focuses on the
intersection of law, technology, and precarious work.
Where does the gig economy come from?
In early 2012, San Francisco taxi drivers began to raise the alarm at organizing meetings and city hearings about “bandit tech cabs” pilfering their fares. “I’ll sit at a hotel line, and I see one of these guys in their own car come up, hailed by some guy’s app, and they’ll turn down my fare,” Dave, who had been driving a taxi for fourteen years, said at a meeting that April. “They steal it. It’s insulting.” Other cabbies said they were seeing the same thing, and that their income was suffering as a result. “I think I made 20 percent less last week than normal,” one driver lamented. He wanted city officials to know; surely, they would put an end to it.
These taxi workers were experiencing the very earliest stage of a global re-organization of private and public transportation, fueled by billions of dollars of financing from venture capitalists. Under the shadow of the Great Recession, in a period of high unemployment and slow job growth, Uber, Lyft, and their erstwhile competitor Sidecar used this technocapital to begin offering almost anyone with access to a car a way to make money by driving people around San Francisco. The companies aggressively marketed themselves as disruptors of the transportation industry; consumers and commentators, seduced by on-demand, technology-fueled mobility and the prosocial promise of what the companies called “collaborative consumption,” enthusiastically adopted their narrative.
Cabbies, however, saw Uber and Lyft as well-financed corporate continuations of the taxi companies that had long subjugated them. “This isn’t about technology,” Mark, a long-time taxi worker and advocate told me in 2013. He explained that, for the previous few years, San Francisco taxi drivers had already been using an app called Cabulous, which essentially did what Uber and Lyft were doing.
“They claim they’re innovative and new, but we already have this technology,” he went on. What was different, Mark described, was that Uber and Lyft had “a new exploitative business model,” though it was just “one step removed from the leasing model that the taxi companies have been using for years.”....MUCH MORE
Since 2012, much of the positive discourse around Uber and Lyft has continued to regurgitate the notion that these are companies built on technological innovations that brought new forms of transportation to people and places who needed them. Meanwhile, critiques of these companies, and of the gig economy as a whole, have typically seen Uber and Lyft as breaking sharply from earlier modes of employment to create new forms of precarity for workers. In both cases, the public discussion tends to see these companies as creating major discontinuities, whether of technology or of labor models. What Mark pointed out, however, is that Uber and Lyft are in many ways not as different as we tend to think from the taxi companies that prevailed until 2012.
In 2020, almost a decade after the advent of Uber and Lyft, we seem to be at another turning point. The ride-hailing industry is facing a wave of militant self-organizing and claims to employment status by drivers. So far, the most significant mobilization has been the fight over AB5, a California assembly bill that was signed into law in September 2019, and which makes it much clearer that drivers should be treated as employees of Uber and Lyft. The companies have fought this reclassification in myriad ways, and some drivers fear that it may cause them to lose their flexibility. But those who have welcomed the passage of AB5 hope it will deliver them many of the benefits—from healthcare to a guaranteed minimum wage—that Uber and Lyft have so far denied them. On all sides of the issue, no one doubts that we are at a critical juncture in the history of labor and urban transportation.
But in order to sort through the arguments surrounding AB5 and grasp the significance of this moment, we must do something that the discourse around ride-hailing has failed to do: situate ourselves historically, tracing both the continuities and the discontinuities that the cabbie Mark pointed to. Our present moment is largely the product of two neoliberal shifts in the taxicab industry—and, in a certain sense, in US society as a whole—that occurred in the late 1970s and the 2010s. Understanding the reasons for these shifts can help us get beyond the easy assumptions made on different sides of the debate: that employee status is an unalloyed good or ill, that innovation made the rise of Uber and Lyft inevitable, or that the issues raised by the sector are matters of technology rather than politics.
Few people understand those reasons better than the drivers themselves—though, like other workers, they rarely have their voices centered in public discourse. By listening to drivers’ accounts of how their industry operates and has changed, we can come to understand how and why, despite some fears and ambivalence, they are using employee status to create a much-needed friction in the wheels of technocapital.
Leasing as Liberation
Typically, mainstream observers see two defining features of the business model of Uber and Lyft. The first is that the people who drive “on” their platforms are treated not as employees of the companies, but rather as independent contractors using those platforms to run their own personal taxicab businesses. In the US, direct employment increases corporate costs by roughly one-third, so classifying workers as independent contractors significantly increases profitability. (This is essentially the labor arrangement underlying the entire gig economy, from people delivering food and groceries to those performing rote tasks for Amazon’s Mechanical Turk.) The second defining feature is the technology—the apps and the various pricing and dispatching algorithms behind them—that the corporations use to exert enough control over drivers in order to provide a more or less on-demand service. In both cases—the non-employment model and the technologies—Uber and Lyft share more in common with the previous generation of taxicab companies than many people understand.
The independent contractor model that underlies today’s gig economy first developed in the taxicab industry in the late 1970s, as the United States shifted towards a neoliberal conception of society in which almost everything was to be subjected to the forces of competition. Workers and households were reimagined as entrepreneurial concerns, sole proprietorships that should fend for themselves in the tumult of the great American marketplace. Embodying this logic, the taxicab industry was one of the first among US businesses to slough off the costs and liabilities—minimum wages, healthcare benefits, disability insurance, among other things—associated with direct employment.
Taking advantage of rank-and-file discontent with traditional unions, as well as an existing carve-out for independent contractors in labor laws, cab companies all over the US reorganized their business models in this period, claiming to “free” their drivers from the imagined restraints of employment. In San Francisco, taxi companies approached drivers in 1976 and asked if they would like to “lease” their taxis on a shift-by-shift basis, so that the companies could rid themselves of the expenses and risks associated with employing workers, including unemployment insurance, workers’ compensation, and a guaranteed commission that taxi drivers had previously been paid.
Although the Chauffeurs’ Union, which had represented drivers since before the New Deal, discouraged workers from accepting these contract terms, many drivers were interested in the leasing model, which emerged within a tightly-controlled regulatory regime won by the union. In the early twentieth century, the union had successfully fought for municipal regulation of fares and restrictions on the number of taxis operating in the city. This helped to more or less ensure that drivers earned a living wage, even absent formal income guarantees.
Cabbies who chose to lease rather than work as employees continued to benefit from these laws. Many believed they could use their knowledge of the city and business acumen to earn more than they had as employees. Many hoped to be liberated from the companies’ direction and control. Some had also grown distrustful of the Chauffers’ Union, which took a politically conservative and dues-driven approach to the workforce. “The union was even worse” than the taxi companies, recalled Markos, a driver who had emigrated from Africa and signed a lease contract in the late 1970s, when I spoke to him in 2010. “They take your money and they say, ‘Thank you and what can we do for you?’—and they didn’t do nothing.”....
