Uber: to ban or not to ban?

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Posted at 10:12 pm on 26th October 2017 by Kevin Hind

Uber – where do we go from here?

How can we muddle through TFL’s decision to suspend Uber’s licence? On the one hand, Uber has been disruptive to tens of thousands of taxi drivers in London at astonishing pace. Simultaneously, it may have failed to follow security procedures – the least we should expect of any transportation service. Perhaps also challenging is the company itself; amidst allegations of poor workplace culture and sexual harassment, former Chief Executive Travis Kalanick was forced to resign.

There are two issues here – Uber the company, and Uber the model. We cannot possibly let either fail.

Uber the company has had its problems, even if it rejects TFL’s conclusions. While Executive Fred Jones has made clear, “we follow the rules,” there have been security issues Uber must urgently deal with. But we should encourage them to address these problems – not write the company off altogether. It was pleasing to see (new) Chief Executive Dara Khosrowshahi demonstrating a fresh humility by apologizing for past mistakes. Lets also not forget that Uber employs more than 40,000 drivers in London, 90 per cent of them from ethnic minority backgrounds. Iqbal Wahhab, former chairman of the Department of Work and Pensions Ethnic Minority Advisory Group, said: “There is a huge disparity in socioeconomic conditions of BME citizens and their white British counterparts. And for many of them, Uber was a way to earn a living, however modest, and come off benefits.” The distillation of an issue into a crass ‘us versus them’ mentality is never helpful when so many livelihoods are at stake.

As for Uber the model, it has been a transformative, positive innovation. First, for public safety. With a named driver, a rating system and the ability to watch for its (usually very rapid) arrival, many of us feel far more secure at our most vulnerable times. Clearly we should expect the highest standards of security from the provider itself; but there is no denying that the model is superior to waiting on the street to step into an anonymous car. Second, its cheaper. Much cheaper. Researchers have found black cabs in London to be 35% more expensive. Lowering the cost of private transport enables more of us to opt for a safer route home at night. Or, for the more isolated among us – for whom many forms of public transport are difficult – to go out at all. Third, why should any government intervene to bolster what appears to be an outdated taxicab model? Consumers seem to have made their choice. Technology will continue to disrupt, often at a quicker pace than we might always feel comfortable with – but the solution is to better support those who lose out, not reject such change altogether.

Uber, TFL, and all other stakeholders owe it to Londoners to rapidly resolve this issue. 40,000 Uber drivers should not live in uncertainty, and the rest of us should have confidence in how we’ll get home at night.

The contributor is a Labour Party member and a member of the Future Labour Steering Committee.


Uber: Below Minimum Average Rating

The decision of Transport for London to suspend Uber’s licence once again raises the issue of whether there are some businesses – and business models – that are fundamentally anti-social and unethical.

Uber is seen as part of the ‘sharing economy’, a concept whose origins were based on fundamentally progressive principles in terms of the peer-to-peer based sharing of access to goods and services. Mutualised access to information and resources is clearly an idea that would be attractive to anyone on the left, and if technology can act as a catalyst for it then so much the better.

Uber smashes through this rose-tinted view of the sharing economy. In October 2016 the Employment Tribunal handed down a landmark ruling in which it found that Uber drivers were workers. In describing them as contractors, Uber drivers would not be entitled to various statutory protections. Uber attempted to argue that they were entitled to treat the drivers as self-employed contractors.

Such was the audacity of Uber’s behaviour that the Tribunal judges not only rejected this argument but were also incredulous in the face Uber’s efforts to conceal its true relationship with drivers. A direct quote from the Tribunal decision demonstrates this level of disbelief and reveals the lengths to which Uber went to get round the law:

“…We have been struck by the remarkable lengths to which Uber has gone in order to compel agreement with its…description of itself and with its analysis of the legal relationships between the two companies [UBV and ULL], the drivers and the passengers. Any organisation…(c) requiring drivers and passengers to agree, as a matter of contract, that it does not provide transportation services (through UBV or ULL), and (d) resorting in its documentation to fictions, twisted language and even brand new terminology, merits, we think, a degree of scepticism. Reflecting on the Respondents’ general case…we cannot help being reminded of Queen Gertrude’s most celebrated line: ‘the lady doth protest too much, methinks.’” (2202550/1/2015 at para 87)

Controversy appears to follow Uber wherever in the world it operates and recruits drivers. In the United States, the Department of Justice has begun a criminal investigation into Uber over alleged bribery and violation of the Foreign Corrupt Practices Act which makes it illegal for individuals and organisations to pay foreign government officials to obtain or retain business. It was partly because of concerns around the use of controversial ‘greyballing’ software – where Uber shows a different version of the app to certain users – that Transport for London refused to renew Uber’s licence to operate in the capital. In Israel, the country’s transportation ministry said it found Uber recruited private drivers without the necessary licenses. In France, Uber received an 800,000 Euro fine for operating in defiance of an official ban. To follow the Employment Tribunal in quoting Shakespeare, as Marcellus said, “Something is rotten in the state of Denmark”. (Incidentally, the Danish High Court also ruled in November last year that Uber is an illegal taxi service and not a true ride-sharing programme).

It is correct that a progressive and forward-thinking Labour Party should not reduce consumer choice by supporting restrictive practices in the private car hire industry in the same way we might oppose other forms of macro-economic protectionism. Also, why would we want to oppose Uber when, at the time of writing, over 855,000 people have signed a petition to reinstate Uber’s licence in London? How could we ride roughshod over the livelihoods of individual drivers who are just trying to make a living? As argued above, there are strong reasons for Labour to support the ethic behind the sharing economy.

Support for innovative new technology, as well as the sharing economy, and strident support for workers’ rights and consumer protections are not mutually exclusive. Labour must take the lead in arguing that new technology should not act as a catalyst for exploitative relationships. This issue feeds into a wider debate around the responsibilities of employers towards the wellbeing of their workforce. In an essay for the Fabian Society, Frank Field MP and Andrew Forsey argued that a future Labour government should take advantage of recent cases where companies like Uber have wrongly classified workers as being ‘self-employed’. They argue for a stronger layer of protection as well as the extension of the National Living Wage to workers in this category. We could go further, closing other loopholes in employment law that allow exploitation of people who are effectively workers.

Any regulation or legislation in the realm of the digital economy relies on the willingness of employers in this industry to accept a consensus on workers’ rights and employment contracts. Uber is a company which seems institutionally incapable of accepting any checks on its behaviour, as evidenced in its well-documented habit for using all manner of tactics to evade regulation. The anarchic ‘hacker culture’ has always been pervasive in digital technology, with developers looking to circumvent rules, break down barriers and challenge received wisdom. It is a fact of history that pioneers of new technology have done this – long may it continue – but as in previous revolutions such a spirit should not be without a sense of social responsibility. The state must be prepared to step in and enforce regulation where industry will not follow the rules.

To use Uber’s own language, the operator has fallen far below the ‘Minimum Average Rating’ and we should support the attempts of London’s Labour mayor to ‘deactivate’ its access to our capital city unless it can seriously raise its game.

Kevin Hind is Editor of the Future Labour blog and a member of the Future Labour Steering Committee.


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