apps, Buzz, Collaborative Consumption, Corporate Social Responsibility, Europe, Facebook, London, Policy, Regulation, ride-hailing apps, TC, tfl, Transportation, uber

Uber only has itself to blame for London license loss

The tech industry’s over-processed supply of irony might not be enough to service all the ramifications of Uber being stripped of its London license by the city’s transport regulator.

Uber advocates were immediately scrambling to bust out the reactionary clichés — painting the regulator as “anti-innovation” and claiming London is now ‘closed’ for digital business. (A point that might have more substance if they were talking about Brexit.)

Guys. Spare us. Please.

NB: A regulator’s job is literally to uphold a set of standards on behalf of the public, not to bow down before your shiny app.

The old ‘They’ve caved to the taxi cartels and/or the unions!’ refrain was also wheeled out and waxed off. Harder to spot: Any mention of how much Uber spends on lobbying lawmakers to influence regulatory decisions in its commercial favor.

Nor how Uber mobilizes its app infrastructure and users to create thousands-strong lobbying armies to apply pressure to city authorities at key moments of regulatory threat.

So — quelle surprise! — there’s already a petition with thousands of signatures against TfL’s decision. A petition set up and promoted by, er, Uber, of course…

At the same time, some genuinely outraged London Uber users, who have become accustomed over the past five+ years to a VC-subsidized regime of unsustainably cheap cab rides, have taken to social media to cry that it’s simply not fair!

And to wonder aloud how they’ll be able to go anywhere without Uber. This in a city that has one of the most extensive and accessible public transport networks in the world — not to mention a large number of private hire vehicle companies other than Uber, some of which can also be summed by an app (such tech! much innovation! wow).

How will we get home safety now, fretted others — apparently untroubled by the fact that London’s Met Police had informed the regulator that Uber was failing to report sex attacks by drivers on its platform. TfL cited Uber’s “approach to reporting serious criminal offenses” as a contributing factor to its decision to withdraw licensing.

The deepest irony of all is that Uber can continue to operate in London while it appeals the regulator’s decision. Which will, at very least, take months. It could take years.

Being told you’re not “fit and proper” to operate a service yet allowed to keep operating your service? Tell me again exactly how London is ‘closed for digital business’?

Uber for a laundry list of scandals

Corporate social responsibility? Uber’s company fabric has demonstrably been cut from a very different kind of cloth. That’s why its new CEO is right now having to triage a laundry list of scandals — from dealing with an internal culture of sexism and bullying; to privacy and security failings so massive Uber just had to agree to two decades of oversight by a US regulator; to what appears to be a disturbing habit of building software tools that aim to blur the line of legality — such as by helping it evade regulators or slurp data from rivals.

Meanwhile Uber intones that TfL’s decision will “put more than 40,000 drivers out of work”. And claims it’s going to court to “defend the livelihoods of all those drivers”.

Yes, this really is the same company that studiously avoids ’employing’ any of those thousands of platform dependents — rather it categorizes them as ‘self-employed contractors’. Being ‘in work with Uber’ means accepting the risk and responsibility of being precariously managed by a tech entirely beyond your control.

Uber has even tried to monetize that insecurity by selling personal injury and illness insurance its drivers. How very innovative indeed! Such shame it doesn’t provide sick pay in exchange for sweating toil in the first place.

In a test case last year, a UK employment tribunal disagreed with Uber’s classification of drivers as self-employed contractors — ruling the company must pay the individuals in question the national minimum wage, as well as cover holiday pay and provide adequate work breaks.

Uber’s business has of course been structured to try to avoid the expensive rights of millions and millions of workers landing on its balance sheet. Despite the fact that, without the labor (and possessions) of all those drivers it wouldn’t be able to deliver its service.

Displaying a very black sense of humor, Uber calls its powerless platform precariat “partners”. Even as it routinely charges its lawyers to appeal decisions seeking to expand their rights. And even though it fought for so long against adding a tips option to its platform. (It routinely challenges any moves by cities trying to raise safety standards for its users too.)

But politicians are waking up to gig economy regulation. As indeed are gig economy workers. That Uber employment tribunal ruling looks like both warning klaxon and tip of a titanic iceberg.

So if you’re an entrepreneur, and circumventing employment regulation is your benchmark for ‘innovation’, it’s really time to get a new playbook.

In Europe, governments are as unfond of seeing their tax bases shrinking as workers are their rights evaporating. While legal minds do appear to have grokked how a tech business which replaces human managers with an app that barks orders is still, er, managing workers.

Europe also appears to be approaching a consensus legal view that a tech platform whose primary business is the delivery of transport services is — wait for it — a transportation company! And should therefore be regulated like all the other transportation companies.

The legal mists Uber has exploited for so long look to be clearing.

And so if your ‘innovative’ business model is intent on siphoning ‘disruptive fuel’ from the tightly managed labor of thousands of people who you won’t classify as workers, you might find VCs aren’t as elated by your pitch as you imagined.

Mark Tluszcz, CEO at VC firm Mangrove Capital Partners, had this cautionary warning following the Uber decision: “There are fundamental issues with the business models of many gig economy companies. While they offer great services and excellent value for money, they are often dependent on not paying salaries, taxes and insurance.”


But no matter — none of that stuff is a barrier to Uber using the precarious livelihoods of its non-employees as an emotive cry for a brake on the TfL regulatory decision right now, and as the claimed justification for what could be years of legal action and uncertainty as it seeks to force the regulator into reverse.

Now don’t get me wrong. TfL isn’t perfect by any means. You can certainly — and people have — call  out the regulator for letting Uber operate for more than five years in the face of mounting concerns. (Or, well, you could say it was demonstrating that London is open for digital business?)

Arguably it could and perhaps should have stepped in sooner to investigate issues being raised. Although it would surely have faced the same or an even more fierce cry of ‘anti-innovation’ had it moved to strip Uber’s license earlier.

The most biting response to TfL’s decision came from James Farrar, co-claimant in the Uber employment tribunal decision, who described it as “a devastating blow for 30,000 Londoners who now face losing their job and being saddled with unmanageable vehicle related debt”.

Although his assessment does also underline exactly how precarious it is for anyone to put their faith in a rights’ less platform to be their forever reliable non-employer.

I mean, this is also a company that has publicly stated its ambition is to remove human drivers from its equation entirely — and replace them with autonomous machines. So its ‘partnership’ offer to (human) drivers has always come with plenty of caveats attached.

But Farrar’s suggestion that TfL should have sought to “strengthen” its regulatory oversight earlier does have some merit. Specifically he says it should have curbed Uber’s “runaway licensing” and sought to protect “the worker rights of drivers”.

It’s the best critique I’ve seen of TfL’s ruling. However it does risk eliding the public safety issue.

As indeed do many of the male voices that have been so quickly raised to speak up for Uber and to brand TfL as ‘anti-innovation’.

Perhaps that’s unsurprising, given it’s women who are disproportionately the victims of sex crimes.

For most men a ride home with a stranger probably sounds like a welcome convenience. For most women the first consideration before getting into a car alone is: Is this going to be safe?

And on the topic of safety, did you hear the story of how an Uber user in the U.S. who was raped by an Uber driver in India is now suing the company for privacy violations after it emerged Uber’s president of business in AsiaPac had accessed, and was carrying around, her medical records?

The bottom line is a regulator’s responsibility is to ensure the entities it grants licenses to are up to its accepted standard. And TfL evidently believes it’s seen enough bad stuff attached to Uber’s business operations in London to merit revoking its pass to operate.

Given how tattered Uber’s corporate reputation is, who can really blame them?

Even Uber’s new CEO has conceded this point — in an internal letter to staff about the London license loss, which was leaked to a journalist, he writes: “The truth is that there is a high cost to a bad reputation.”

The end of the road for antisocial?

Regulators are also, as a rule, underfunded and overworked. These public bodies don’t enjoy the kind of VC largess that allows an entity like Uber or Facebook to aspire to ‘move fast and break things’. So it’s unrealistic — and more than a little ridiculous — to demand that a small public body like TfL funds lengthy interventions aimed at educating far better resourced corporate giants on being socially responsible and on ensuring public safety.

The massive asymmetry between the understaffed regulatory oversees of civic society and the elite techno disruptors, stuffed to the gills with the finest engineers money can buy (but apparently no one who passed a course in ethics), has clearly enabled certain tech entities to accelerate their business growth at the expense of responsibility. At times some are essentially dispensing with legality.

Uber grew by ignoring extant transport rules. Indeed, in the past, it was proudly and loudly breaking such rules. Told by a German court in 2014 to cease operating nationwide, Travis Kalanick era Uber told the judges to stuff their injunction and pressed the pedal to the metal.

So there’s another rich irony to Uber’s new CEO now pleading with the London regulator not to apply its rules, and calling for it to “work with us to make things right”… But hey, at least he’s gaslighting nicely.

While, in the case of another platform giant — Facebook — the result of being powered by a business logic that’s 100% geared towards commercial optimization at massive scale is currently being liberally painted across U.S. political headlines.

And across the prematurely aged visage of its remorseful-in-retrospect founder…

Facebook is a content-curating company that, until very recently, resisted being classified as a media company. For as long as possible it sought to eschew any kind of editorial responsibility for the user generated content flowing across its platform — even as its fleet of engineers worked to tune algorithms to distribute content at an unprecedentedly vast scale and with an invasively exact degree of interest-targeting.

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