This is a magazine for American Leftists, so they're really quite clear what they want: they want valuable services rendered to people with profits shared among the workers, not the gatekeepers to an arbitrary app. More than creating wealth, they want that wealth to be owned by the workers. To quote from the piece:
> This doesn’t mean drivers are better off working for a traditional taxi company. While Uber’s burdensome cost-shifting has come to define Uberization, the company merely digitized the taxicab industry’s already exploitative practices. The taxi medallion system, which requires drivers to pay their cab’s medallion owner at the start of each shift, deserved to be “disrupted.” But Uber’s employees face serious costs and risks nonetheless.
> The possibilities don’t have to be so restricted however. Ride-share drivers usually already own their vehicles, so in theory they could enter the ride-share marketplace themselves. By ditching Uber’s predatory practices for a cooperative model that uses the same technology, driver-owned apps could democratize the ride-sharing marketplace, fulfilling the initial promise of the so-called sharing economy.
Uber is really a place where the leftist case makes the most sense, because the means of production is already owned by the workers and are in effect paying a portion of their profits for the right to take part in an economy.
2) The high liquidity of drivers would imply a functioning market (not to say that it's perfect). The most obvious solution for drivers who are unhappy with the pay would be to get a different driving job, right?
3) The core issue is that the barrier of entry to driving for Uber is very low, increasing labor competition. This also keeps the price of a ride low. The wage of the driver is the agreement between the rider and the driver for the service, Uber is acting as a mediator. There is nothing in this article that comes close to proving that Uber is not fulfilling it's role as a mediator.
4) It will be interesting to see if the app works, but the strategy seems flawed. The constrained variable are the riders; there are already plenty of options. Paying drivers more doesn't seem to be a very compelling reason for riders to choose a different service.
2) Yes, to a company that is owned by the drivers and gives them back the maximal share of the revenue, taking into account the (minimal) operating costs.
3) To call Uber a "mediator" when both the customer and the driver have no say in the cost of the fare is laughable. Uber unilaterally sets the price, and if you don't like it, you're shit out of luck.
4) Like the point I made in 1), Uber takes a much larger cut than what is truly necessary. Even if the hypothetical ridesharing co-op had the exact same fares as Uber, a much larger proportion of the fare goes to the driver. And I would disagree that riders are the only constrained variable - there is almost zero switching cost between different ridesharing services for not only the rider but the driver as well. If only Uber and the ridesharing co-op are the only options for ridesharing in a given city, and they have the exact same fares for customers, but the co-op pays the drivers better than Uber, any driver would logically switch to the co-op since they would be paid more, and the customers would quickly switch to using the co-op's app as well, since the waiting times would be shorter compared to Uber.
That said the fact it could happen it not really related to if it should happen - as you say it's unclear how much extra money would actually flow to drivers as potentially Uber is operating on thin margins.
Just as in buying computers, buying food, education, airplane fares, consumers want lower prices which is a good thing. In the case of taxis, that means the elderly who often need them because they can no longer drive and are on a fixed income can more readily afford them (surely a leftist notion).
There is no disagreement that "economic rents" are harmful to the economy, giving people artificially high profits (see the Wikipedia entry).
Are you saying that a politically left magazine want to harm the economy through economic rents instead of helping it through wealth creation? Who would be for that?
Is that easy to understand?
Assuming that Uber is profitable (this is not clear) then costs to riders could be lowered and drivers could be paid more, simply by splitting the profits going to Uber between these two ends. That's what a co-op is designed to do.
I didn't downvote you, but if I had it would have been because you applied the standard arguments about Uber/Lyft without considering the specific argument here: that co-op systems can benefit both the consumer and worker.
This is the comment I was responding to.
If the drivers provide a services at sufficient lower costs than Uber (something easy to do in NYC at least) then they won't have to worry about Uber.
Peter Thiel would like to have a word with you. We're supposed to be building monopolies that no natural market force can topple.
For Netflix, sure.
People spend a considerable amount of money on Uber/Lyft etc at least in NYC where I live, thus many would respond to a competitor with a 20% to 30% discount or more. This is possible in NYC because the rates are so much higher than other cities.
But there are a lot of people who need taxi like services that are price sensitive. Think of elderly who aren't able to drive or use mass transit so well and are on a fixed income.
In Jacobin's world, the only person providing value here is the driver. In the world the rest of us inhabit, things like the star-rating system and the dispatch system are valuable too.
So, that they can be sued or lose lots of profits to a competitor if they don't have a fully safe system.
Large US airlines have a huge incentive to ensure that flights are safe. It is not only that they are afraid of losing market share if there is a large accident (and of course the loss of reputation for loss of life) but the average payout per killed passenger is $4.5 million.
In Germany, Lufthansa, the main carrier of Germany, owned a discount carrier where the pilot deliberately drove the plane into the ground, killing all on board. But in Germany the liability is limited to something like $75,000 per passenger instead of the $4.5 million in the US.
Which makes me more interested in flying with US carriers than, say, German ones, But also Uber/Lyft rather than "co ops."
This is real value provided. An especially important to women and the elderly who are most at risk from a problem driver.
More generally, I'd push back a little: socialism strives to have the workers own the business (broadly, the economy) but there is of course still management and a need for QA, R&D,etc.
I like to point to Vanguard as an example of socialism that works well while people don't even realize it. The people who own Vanguard mutual funds and ETFs are collectively those who own Vanguard and control its direction. There is still a lot more than the service of a mutual fund that Vanguard provides, to the extent we don't realize its inverted corporate structure is a kind of cooperative. And all the time, the owners' financial interests come first in providing low-cost exposure to equity markets.
Why hasn't the broad mutual fund market engaged in a race to cut fees with each other? In fact it has been Vanguard's fees which have usually pushed others' lower.
That's not an abstract hypothesis. That's what happened to the Yellow Cab Co-op in SF.
Vanguard is a decent example, but it's in a unique market where information is shared very widely and customers are extremely sensitive to price. And nothing other than price relative to returns.
As for my personal knowledge at implementing this: I don't know how it can be done since I'm a scientist and not a business analytics person. But I know that a cooperative could compete well against the taxi cab industry. Perhaps not against Uber which broke lots of regulations to become an entrenched force in the industry.
Disengaging, I don't like to discuss with those who attack others while ignoring the evidence brought forward.
Not really, they are paying a portion of their profits for access to the connections to drivers that Uber provides. They have every right to participate in the ride-share market outside of uber.
Through it's app, Uber is providing a known brand (as McDonalds does for burgers). People are welcome to open their own burger shops but when traveling, anywhere there is a McDonald's, I know it is safe.
Uber also provides the app technology which does cost money to maintain.
Like in the case of McDonald's, any driver is able to open up their own shop apart from Uber.
Even in medicine, it is much harder for foreign doctors to work in the US than in Israel, a country with lots of competent medicine.
It really applies to any group that uses politics, regulation, to give profits beyond those in a healthy, efficient market.
In the case of taxis, it is helpful to eliminate economic rents so that fares are more affordable.
Instead of using economic rents to ensure that drivers get undeserved income which works against wealth creation, the workers should focus on eliminating economic rents that creates higher living costs, chief among these are the use of zoning density restrictions to create artificial land scarcity which results in higher rents.
Since a significant portion of one's salary goes towards renting an apartment or house or paying for an overly expensive mortgage, then eliminating the onerous zoning laws will go much farther towards improving the economy.
It is because of zoning density restrictions that housing is so expensive in SF, NYC, Boston, LA, SD, and other coastal cities.
The wiki article you supply gives many examples of this from the FAA, to the NRC, to the Fed regulating investment banks, ....
The economic rents frequently are political laws passed to create special licensing requirements to create politically induced barriers to entry for people wishing to have a job. The economic rents also apply to other politically induced scarcities such as limitations on zoning density to create housing scarcity or taxi medallions to create taxi scarcity.
Regarding labor, guilds or labor unions, or the American Medical Association that makes it more difficult for foreign doctors to work here than Israel makes it for foreign doctors to work there. And so on.
In NYC, because of the legacy taxi medallion system which artificially limited the number of medallions to 13,000 (resulting in a medallion market value of $1.2 million now down to $700,000 after Uber/Lyft), taxi fares are still about twice that of many US cities. The artificial limit of medallions created artificial scarcity which resulted in "economic rents" thus ultimately requiring passengers to pay much higher fares that then went to the medallion owners.
One example would be to lower gas usage by using electric vehicles or hybrid cars (NYC Yellow Taxis are converting to hybrids) which not only lowers fuel costs but lower air pollution. They could make a financial deal with the city or state showing the lower health care costs from lower air pollution and have the cars financed.