Hannah Johnston & Jamie Woodcock - UBER and the COVID crisis: business model, state regulation and social impact

Publication Type:

Compte Rendu / Report


Report of the Gerpisa monthly seminar, Number 260, Virtual (2021)


Hannah Johnston, Northeastern University, Massachusetts
Jamie Woodcock, the Open University, UK

Full Text:

Building on presentations by Dr Hannah Johnston (Northeastern University, MA) and Dr Jamie Woodcock (Open University, UK) on the nature of platform work and on different labour organising experiences within the taxi industry, the seminar aimed to reflect on the Uber case from three different angles: the sustainability of its business model, possible attempts to regulate the sector, and the impact of the Covid crisis.
Introducing research work that will be included in his forthcoming book The Fight Against Platform Capitalism: An Inquiry into the Global Struggles of the Gig Economy (2021, London: University of Westminster Press) Jamie Woodcock provided a critical overview of organising in transport platform work (broadly including Uber transport, food delivery through Uber Eats and Deliveroo). By quoting cases coming from extensive fieldwork conducted in the UK, Europe, US, India, South Africa, he started by strongly questioning the representation of platform workers as unorganisable, due to the lack of a common workplace, the difficulties in uniting and high turnover in the sector. In this regard, the low market bargaining power of platform workers is often associated to a low impact of any action they may engage in, and the use of technology seen as undermining their ability to organise. Countering these arguments, Woodcock illustrates how examples of organisation and forms of resistance do occur, are creative and actually have an impact.
Through a rich archive of anecdotal examples, Woodcock discusses the dynamics involved with platform work, how solidarity and networks emerge and the broader implications of ‘uberisation’ for the world of work.
Whilst not sharing a workplace in a traditional sense, platform workers have found ways to collectively meet and be connected. Contrary to a picture of them as isolated, atomised workers, unable to face the contradictions related to their working conditions, they are increasingly showing the capability to set the building blocks of organising and to form networks. Often connecting via Whatsapp, they have organised strikes and coordinated initiatives across countries. They have demonstrated to be active agents, able to engage with their lived working experience and to react to it.
Within growing attempts to build solidarity, Woodcock argues, three ‘moments’ have been crucial:
1)     The increasing connection between platform workers, no longer isolated. They have started building networks and communities, and sharing experience of work;
2)     The lack of communication and negotiation with the platforms. This has often led to workers communicating amongst themselves and quickly escalating actions around shared issues (UK, wildcat actions);
3)     The internationalisation of platforms – this has changed how we see transport work (we see very similar issues in Bangalore or in London, ex. increasing commission extracted from driver, just with different media coverage). Uber drivers across the globe have shown interest in international issues and comparisons, and widespread use of media and apps.
The transnational commonality in the experience as an Uber driver, in a sense, has been shaped by the company itself. Uber put in fact a significant effort in creating the image of a ‘global’ Uber driver – the self-employed, flexible, modern taxi driver. However, while this informed a shared experience at global level, it also disclosed the difference between global and local, where the common working experience is still bound to state regulations (ex. specific intermediate worker status in the UK, need of license only in some countries). Overall, regional differences in how Uber operates and integrates in national regulatory frameworks persist.
In terms of workers’ actions, these have often been localised but in a few cases also coordinated at international level, having a high symbolic impact (like the performative action around UBER’s IPO). From an organising perspective, the international comparison is useful and may lead to interesting reflections, whereby new and creative organising models are emerging (through existing trade unions, new unions, worker networks that are not trade unions etc.).
In conclusion – Woodcock warns against excessive emphasis placed on the role of technology and on the platform nature of companies like Uber. It is important, he claims, to look at how technology is used within the labour process and to draw attention to the social dimensions of platform work (ex. why workers chose this work, role of migration and shared experiences/ networks). In rejecting the argument that Uber is just a technology company, we should bear in mind two key features: 1) Platform work is indeed work and an employment relationship. In this regard, platforms exert managerial control over workers and profit by extracting surplus value, and by doing so clearly show not break from the employment relationship. Mechanisms of surveillance and control, added to the frequent refusal to communicate and negotiate with the drivers, unmask all the contradictions of this ‘’bogus self-employment’’ 2) Platform workers are indeed workers, they’re not disconnected self-employed seeking business opportunities. Flexibility is something the drivers initially search for, compared to previous employment. In reality, they find a job with its own T&Cs, in most cases substantially different from what they had hoped to achieve.
Discussing the impact of Uber’s entry in the US taxi industry, Dr Hannah Johnston tells us of a very interesting and peculiar case of attempted regulation and workers’ organising. Having first studied the yellow cab industry, she followed its trajectory throughout the ‘Uber disruption’ (2011-12) and up to the most recent Covid shock, with a specific focus on New York City.  
Part of a broad, for-hire vehicle infrastructure, NYC has the largest taxi cab industry in the US. Historically, the yellow cab industry could be seen as a private industry providing a public service: highly regulated and directly subsidising public transit (ex. the company collects a standard fee per trip that goes towards public transportation). From a structural perspective, taxi workers have a unique leverage in how they express collective grievances and high disruptive potential.
Through her presentation, Johnston illustrates two main issues:
1)     The transformation of the taxi industry in general: how neoliberal reforms changed the taxi labour market and the emergence of Uber.
2)     Attempts of regulation in a context of low unionisation, looking at the role of drivers through Hirschmann’s (1970) EVLN (Exit, Voice, Loyalty, Neglect) framework.
Analysing collective organising in non-standard work and amongst workers who are generally exempted from unionisation, she reports the case of the New York Taxi Workers Alliance (NYTWA), the first AFL-CIO affiliate of self-employed workers. NYTWA managed to reach up to 21000 members, gathering together a very diverse and dynamic group of workers, and adopting a wide toolbox of strategies for collective organising, going beyond unionisation.
Going back in time, Johnston traces the history of the yellow cab sector in NYC and of its workforce. For many decades drivers were considered employees, they joined unions and organised campaigns, some of which successful. Early industry regulations go back to 1937 – when following the deep economic downturn, the taxi market was flooded with unemployed workers coming from other sectors. With drivers facing insufficient earnings and worsening working conditions, the situation became explosive. The City  then introduced a medallion (permit to drive in the city) system. Such an attempt to regulate the number of circulating cabs forced some out of the industry, and also gave rise to private buy&sell of medallions, until the number of medallions was eventually stabilised (13586). Other attempts to regulate the sector included the right to stop in the street only reserved to yellow cabs, and the standardisation of meter rides. Outside of the yellow cabs, the sector remained very unregulated, with no licenses. Together with private transfers of medallions, the car lease market also opened up – with drivers often owning the vehicle and loaning the medallion. In the 1970s – the proposal of shifting from a regulated and protected employment status (including rights and a minimum wage) to a leasing status was firstly advanced. The ‘unorganisable’ workers immediately proved the myth wrong: drivers promptly came together in a big campaign against the leasing model (No horse hiring! campaign), seen as shifting the whole economic risk from garages to the workers/drivers. The drivers were eventually classified as self-employed, excluded from LRA, and the union lost power. New working conditions thus affected the ‘yellow industry’, including workplace fragmentation, longer working hours, H&S concerns, little control over T&Cs, no benefits, limited control on means of production (lease), high lease prices, exploitation, overcharges.
Then the ‘Uber shift’ took place. Drivers started moving from the yellow industry to Uber. In the yellow industry, leases had become unsustainable, medallions too expensive. When Uber entered the market in 2015 – it came with promises of higher earnings, of flexible hours, of easy access financing/discounts to get a car and of ‘becoming your own boss’’. Uber then represented an EXIT, and felt like a CHOICE. At the same time, for drivers from the yellow cab industry that had invested their life savings to get a medallion and a car this had a heavy impact. They also started leasing their cars. Initially, yellow cabs became integrated into the uber dispatch infrastructure, until they gradually disappeared from the system. In the past few years, the number of black Uber cars has exponentially multiplied, from about 10000 in 2014 to nearly 110000 in 2018.
Regarding working conditions amongst black cabs drivers, a recent ILO survey has reported long hours, decreased earnings, unilateral contract changes, surveillance, deactivation, no ability to set fares, lack of flexibility, and a regular oversupply of drivers.
Within the yellow cab industry, increasing debt and a proper race to the bottom have been observed. The NYTWA also conducted a survey which clearly reported a desperate situation amongst medallion owners, who saw the price of their medallion terribly decreasing (from 1.2-5 million to 200k dollars). Out of over 300 app based drivers, many declared to be indebted, some on bankrupt, 73% unable to earn a liveable income, 82% driving more hours and earning the same or less. Coming to a tragic end, in 2018 the industry was properly shaken by repeated cases of suicide amongst both yellow and black cab drivers (the first famous story, drawing attention to the issue, being that of Douglas Schifter).
Since then, NYTWA have kept campaigning for a sector wide solution, expecially insisting on a vehicle cap and a sector wide rate. Indeed, their case showed how drivers were really able to come together.
During Covid, not only debt has remained very high, but the crisis has exacerbated long standing problems. Ultimately, the crisis has also revealed how the taxi industry workers are severely exposed to risk and violence.
The two presentations triggered a wide and interesting discussion, partly reported here. For more details and the full debate please also watch the session video
Some contributions:
SC. Viability of the uber model and the platform work: in a sense, uberisation is not completely new – self-employment has been rather omnipresent in the history of capitalism, it has existed in the metal sector in the 19th century, it has existed in clerical work in the early 20th century, in a certain way we focus too much on the novel aspect of the platform work. At the same time, platform work today does not concern so many people, there is a consensus on this that it ranges between 1 and 6% of the workforce depending on the country. Is therefore platform work an epiphenomenon, something that will not last or remain marginal? My view is that uberisation is not to consider completely new but must be seen in the long history of precarisation under capitalism.
LM. Reflecting on the issue of whether regulation is possible, I was thinking of two aspects that probably complicate the picture, that both pertain to the social dynamics within the uber sector: on the one hand, the stratification – the working relation is not always linear, where you have the driver and the platform. You often have (as Hannah stressed through her case) this question of the lease and the ownership, which gives rise to a situation (as I saw in SA) where you often have a mid-layer of car owners that are a private layer, that rent the car out. They are either those that are registered on the platform, and the driver does not exist anywhere, or they are themselves not registered, often belonging to a sort of ‘criminal networks’ the drivers depend on. This not only complicates the picture, that becomes multi-layered, but definitely proves the idea of self-employment wrong, whereby the driver is doubly attached, to the platform and to the car owner. This is definitely not a free-lance type of situation. If you have observed this in more cases, it would be nice to hear more. The other issue is the often conflictual relationship between the regular taxi drivers and the uber drivers. In same cases, this takes the traits of an external lobby, like in Italy where Uber never properly thrived because of the regular taxi lobby strongly defending their privileges and the licenses that they often paid at a very high cost. Sometimes it becomes open conflict: in South Africa regular taxi drivers used to attack Uber drivers, even in a violent way. Or, it takes the shape of a legal dispute – see the case of the congestion tax in London, and the dispute between black cabs and Uber drivers. All this often hampers the possibility of enacting regulations. If you want to articulate any of these issues in relation to the cases you observed, I would be glad to hear more. The last thing relates to COVID and Uber: on the one hand we have seen Uber absorbing a large pool of workers and becoming a large employer of last resort, but it also becomes a necessity of the customers, in a moment where public transport entails higher risks. My question here would be – do we have any data/evidence on whether COVID has caused an expansion of the industry, of the number of drivers, in different countries?
TP. I would like to articulate a few ideas and also provide some information on the GERPISA network, and explain from which angles we developed an interest in these issues, in the light of your presentations. Firstly, in GERPISA there is a long tradition of work on car companies, as you can imagine, with an analysis in terms of productive models, and a key element in this was their profitability. So, the idea is that if these companies managed to stay regularly profitable probably they have developed viable productive models. In this regard, we also developed the notion of a compromise of government between stakeholders and the conditions for profitability. This was written by the founder of the GERPISA network, Michel Freyssenet, together with an economist from the French Regulationist School, Robert Boyer, in the early 2000s. When we started looking at Uber, presented as the ‘future business model’ for the auto industry, to a certain extent, as the auto industry now wants to move towards mobility as a service, they claimed to be ‘providers of mobility’. We started looking at Uber and we were very surprised to see that even if this is a global business, now very well-known and on the stock market, it keeps losing money. In fact, Uber’s revenue is not the gross revenue, the gross revenue is the money they take from people who use uber but then they need to repay the drivers, so the net revenue are the fees, and on the fees they lose 80%, so they have -80% profit rate. If a car maker had that just for one year it would go bankrupt and that’s it. So that’s intriguing for us. So I tried to dig into the story and understand 1) Why Uber loses money – if they’re just a mediator between the driver and the customer, and they take a fee? How can they lose money if they don’t own anything, they don’t pay for social security of the workers, they don’t hire anybody? You need to constantly attract drivers and customers. Eventually though, it seems that there is not enough value in the service they provide, to make the business work. For example, why was the cab industry regulated? Well, because if you leave the industry unregulated nobody earns a living. This is where Uber doesn’t seem to work: they are unregulated but they don’t seem to generate enough value to sustain the model. In this sense, class struggle seems the inevitable outcome of this business model – they try to squeeze value out of their drivers but there is not enough value. The reference by Jamie to EP Thompson put very well the way this creates a transnational working class, and in a way Uber itself helps the drivers gain consciousness of the fact that they are all in the same situation. Consciousness seems to emerge out of this homogeneisation of working conditions made possible by the platform economy. Eventually, the regulation could be a way out for Uber. Is there something we can think of, like ‘reembedding Uber is the only way to save Uber from just going bankrupt?’ Just a provocative thought. Another question to Hannah is, about the California case – what would have it meant if Uber and the other had lost? And what did they win? Is the new status acquired in California a very bad thing? How does it change things?
JW (A): Not a fan of the argument that the Gig economy is a fundamentally new form of work, but what I think is new is the speed at which workers have begun to organise. If we look at the automobile industry, it often takes a generation of workers or an entire cycle of struggles to achieve the same level of organisation. My argument here is that ICT rather than introducing new forms of precarity in this workforce, has allowed many of these workers to do things quicker than they would have done otherwise. The platforms want to say that of course all this is new.
Numerically it true, this work is quite small. But like Deliveroo is not about deliveries, it’s about how work is changing. Social security must change, unemployment benefits must change. What is changing for a small group of workers is part of a broader project. It’s a testing ground for techniques that are going to shape other people’s work.
The point about different layers is very important, the fact that these drivers often have an additional relationship with people they loan the car from. I think there are a number of predatory relationships platforms like Uber have built upon. Debt is one of the things that often keeps people working on these platforms, and in part cause platforms would otherwise struggle to compel workers to work for the platform, as they don’t have the traditional means of control of an employment contract.
Re. the relationship between taxi drivers and platform workers is important has it underlines how despite platform have internationalised they have national characteristics. This also includes the relationship with the state (negotiation of employment status, licenses and so on) and the relationship with taxi drivers. In the UK many regular taxi drivers are unionised and have attempted to exclude the uber drivers from the labour movement, and this has also reflected in the way regulation has been determined (ex. congestion targe in London).  Such a relationship is also highly racialised (with most  migrants working for Uber and black taxi drivers more white/British). The violence to which Uber drivers are exposed (like in the SA case) highlights how dangerous and unprotected the work is.
Impact of Covid: we don’t know much yet, but it has already emerged how risky the job is, with high rates of infection amongst Uber drivers. And if they don’t work for long they often lose the job/their car is re-possessed etc. Many of them exit uber driving and enter food delivery, because it has lower overheads. You just need a bycicle, you don’t need a licence etc.
Re. Tommaso’s point. I think Uber’s business model cannot be separated from the kind of capital investment made onto the platform. This affects the profitability. Another frequent discussion is that there are only a 4-5 profitable cities where Uber makes money: I think London, NY, San Francisco, Sao Paulo. And in part the challenge is the amount of money that Uber has spent to compete in big cities like London. Add to this the lobbying cost. I think it wasn’t really meant to be profitable, it aims for a monopoly and to extract monopoly rents from the basis. Another question is the frequent argument that the most valuable thing is data: there is no evidence that Uber are going to be able to make money from that data. This is worrying as it kind of implies ‘well, the drivers do not really matter’, in a sense shifting away from the kind of employment relation that actually takes place
HJ: main point is that the taxi industry has been precarious for a long time, and this is why this business model has taken off there. A note on the mid layer – ILO report on digital employment and platform. What is surprising to hear is that many drivers are working on platform with even a phone or an ID that is not their own. In turn, there is also a cut-off money that is taken away. Most research done in the Global North, this is why research in the Global South is valuable, to unpack all these relationships. In terms of conflicts, this is also old, and it differs depending on how unions respond, inclusively or not. Desire of capital to find loopholes or circumvent existing regulations not to underestimate, to divide workers. One of the strengths of the NYTWA was also to reach across divides. Uber didn’t just negatively impact the taxi drivers, but the public transportation system as a whole. In terms of Covid, to reduce exposure people are also moving less. There’s more drivers multi-homing/working for different platforms and doing different kind of platform work. Uber has allowed the easy integration between Uber transport and Uber eats. We don’t have data yet but they will come.
Other issues discussed:
·       The dispute in California/AB5 legislation
·       Different conditions between part time and full time drivers
·       Examples of local, national, transnational drivers organising
·       Potential of Uber to disrupt the automobile industry, changing the rules of the game
·       Examples of possible regulations that could both guarantee decent jobs and meet consumers’ needs, while avoiding hyperinflation
Concluding discussion: How do you see Uber 10 years from now? The business model falling apart? Workers will get organise and Uber will be regulated?
JW: Really important exercise, around the nebulous debate on the future of work. Two examples: what if these struggles were successful, how could an alternative look like? Imagine these workers had power to reshape the platforms, how would they look like in a way that could not only provide for those workers but had a social benefit? If the platforms could help building social connections, to deliver food to those who are hungry: imagine is a public utility run under workers control. On the flip side, we can imagine a much more dystopian vision, where not only does Uber succeed in getting a monopoly and testing things out, but other parts of capital also say we want to uberise using this model. The same technology is already been tested in other sectors (cleanings, security, teaching assistance, health assistance). We could see the dynamics of Uber being pushed in the much older dynamics of outsourcing. Whether we go for this dystopian or utopian vision, it will depend on whether these struggles will be successful or not. And this is why this stuff matters, because there are many options unfolding at the moment.

HJ. Id like to imagine a more utopian future, it feels more motivating to me, against this sort of techno-determinism. I believe in the power of workers and collective action – how can we build broader solidarity? 


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