{"id":3569,"date":"2014-12-07T00:56:23","date_gmt":"2014-12-07T00:56:23","guid":{"rendered":"http:\/\/peerproduction.net\/?page_id=3569"},"modified":"2015-01-15T09:24:44","modified_gmt":"2015-01-15T09:24:44","slug":"disrupting-the-cab-uber-ridesharing-and-the-taxi-industry","status":"publish","type":"page","link":"http:\/\/peerproduction.net\/editsuite\/issues\/issue-6-disruption-and-the-law\/essays\/disrupting-the-cab-uber-ridesharing-and-the-taxi-industry\/","title":{"rendered":"Disrupting the cab: Uber, ridesharing and the taxi industry"},"content":{"rendered":"
\n

by Moira McGregor (Mobile Life @ Stockholm University), Barry Brown (Mobile Life @ Stockholm University) &\u00a0Mareike Gl\u00f6ss (Department of Informatics and Media, Uppsala University)<\/strong><\/p>\n<\/div>\n

\n

 <\/p>\n

INTRODUCTION<\/span><\/h1>\n

In the summer of 2014, four thousand London taxis brought the centre of London to a standstill following similar protests that had taken place in Paris, Madrid, Rome, Milan and Berlin, (Fleisher 2014). These protests were targeting the smartphone app Uber, a \u2018ridesharing\u2019 app that allows users to hail private cars for travel, as well as allowing drivers to earn money from picking up rides in over two hundred cities worldwide. Uber, and similar apps such as Lyft and Sidecar, are part of a purported \u2018sharing revolution\u2019, where forms of consumption around shared goods and activities rival private, state or public consumption (Aigrain 2012, Belk 2014).<\/p>\n

The Uber app incorporates fleet and driver management, social interaction between driver and passenger, taxi hailing and payment. The threat posed to the incumbent taxi service providers, regulators and users resides in the transfer of control over aspects of an entire industry\u2014such as pricing, discrimination and work allocation\u2014to whoever controls the software. In this essay we present results from 32 interviews with drivers and users of Uber and Lyft, as well as conventional taxi drivers and private hire drivers. Interviews were conducted in San Francisco (SF) and London, two cities with different legislative and commercial history for taxi driving, as well being at respectively mature and fledgling stages in development of ridesharing services.<\/p>\n

Seeking a distinctive perspective, this essay looks beyond headline stories about Uber, or its executives, to document and focus on the impact of rideshare apps upon the lives of the key actors\u2014drivers and their passengers.\u00a0 We learn how the apps affects travel in the city, while excluding certain passengers and drivers; yet for some drivers the apps create new economic opportunities but also new financial risks. Rideshare apps warp the existing context\u2014lowering the value of existing cab licenses and disrupting existing jobs. In doing so they subvert regulatory regimes and change the economic context of cities. Moreover, as critics increasingly characterise Uber as predatory and exploitative, its increasing corporatisation of ridesharing may seem incompatible to the purported goals of a just and sustainable \u2018sharing economy\u2019.<\/p>\n

 <\/p>\n

Methods & Background<\/span><\/h1>\n

We spoke with a mix of taxi drivers, Uber drivers and passengers. Ranging from 15 minutes to 1 hour 10 minutes, the average interview was 32 minutes long. We interviewed eight conventional taxi drivers (two SF taxis, two London mini cabs, four London black cabs), 17 Uber drivers (10 in London, seven in SF) and seven users (six SF Users and one London user). One Uber driver was female, all others were male. Interviews were transcribed and qualitatively analysed to produce in-depth understanding of the practices of our interviewees.<\/p>\n

\u2018The drivers are scared of the customers but also the customers are scared of the drivers.\u2019 (London mini cab driver)<\/p>\n

Cab driving is dangerous work which, while low-paid, offers opportunities for a reasonable living, at the price of long hours of work. Historically, London\u2019s cab business is divided into two segments: black cabs which can pick up passengers on the street; and mini-cabs which can only accept fares booked in advance. \u2018Black cabs\u2019 charge higher fares, are regulated by city authorities, and drivers must pass \u2018The Knowledge\u2019, a difficult exam on geography of London, which takes three or four years to complete. The SF cab business is less segmented, however \u2018Yellow cab\u2019 drivers must pass an exam and work with a regulated \u2018medallion\u2019 \u2014 a license to drive in the city, with medallions changing hands for hundreds of thousands of dollars.<\/p>\n

Regulation impacts drivers\u2019 experiences heavily, (Cooper et al. 2012, Hara 2011, Hodges 2007, Maguire and Murphy 2014, Moore and Balaker 2006). In de-regulated taxis markets (e.g. Stockholm, Dublin, San Diego) increased numbers of drivers compete for passengers. In regulated cities however, costs are higher due to the price of \u2018medallion\u2019 or whichever regulatory tool permits them to drive. The SF taxi organisation statistics suggest an income of around USD$11 an hour for drivers and US Labour Statistics calculate an average salary of USD$14.52 per hour (Hara 2011). This large variation is in part due to chronic underreporting of salaries for tax avoidance purposes, with as much as 75 per cent of drivers underreporting income, (Hara 2011) making the \u2018average\u2019 driver elusive. It\u2019s clear, however, that taxi driving is low paid \u2014 but above minimum wage. Uber entered these markets first in San Francisco in 2009, then internationally into over 200 cities worldwide (London launched 2012).<\/p>\n

 <\/p>\n

Findings<\/span><\/h1>\n

Findings focus on groups affected most by ridesharing: Uber passengers; traditional taxi drivers; Uber drivers.<\/p>\n

Uber passengers<\/strong><\/p>\n

When discussing Uber with our passengers, traditional taxi services were a common point of comparison and since interviewees were self-declared Uber users, they were often hostile and dismissive in describing incumbent taxi drivers and experiences with them.<\/p>\n

New Uber app users must firstly obtain an Uber account, requiring a valid credit card and billing address, meaning that Uber cannot be used by the 10 per cent or so of Americans without a bank account, and other \u2018unbanked\u2019 passengers around the world. Our passengers found the app more reliable than incumbent taxi services, with Uber giving more information before and during the ride and, critically, committing a driver to pick them up once their order is placed through the app. Practicalities of downtown parking and alcohol consumption were motivators for Uber use. One survey of Uber users in SF found that if Uber was not available, around 8 per cent would not have taken the trip, 39 per cent would have taken a taxi, 33 per cent would have taken public transit and 6 per cent would have driven (Rayle et al. 2014). Yet whether to take an Uber is not simply a practical judgment about time, distance and cost\u2014it also involves judgments about whether it is a journey one can reasonably take by taxi, or whether a certain journey is too extravagant to make by taxi. Journeys that took place as part of nights out eating or drinking, for example, were still more \u2018taxi-able\u2019 than routine trips to work. Once a taxi has been ordered via the Uber app, it displays a countdown until the driver arrives, alongside a picture of the driver and details of the car model and registration. Although traveling in a stranger\u2019s car, our Uber passengers described this as a preferable experience to getting into a taxi. They believed a private car would be better maintained than a taxi cab, whereas the relationship between traditional taxi driver and a leased fleet cab is much looser, less accountable \u2014 with SF passengers giving accounts of unkempt taxi cabs.<\/p>\n

When actually in the car and on route, the security of the ride came to the fore. The ability with Uber to see the ride route taken on the receipt afterwards, as well as the rating system, all contributed to the perception of Uber\u2019s security\u2014the accountability of the ride serving to protect against both overcharging or physical harm. While traditional drivers have to go through checks that are at least as strenuous as those for Uber, our passengers perceived Uber drivers as more trustworthy; our users talked about enhanced levels of service and friendlier Uber drivers. Earlier work has referred to the \u2018homophily\u2019 of the sharing economy, (Ikkala and Lampinen 2015) meaning that often similar \u2018types\u2019 of people provide and use these services (in terms of class, education and race). For our Uber passengers, this was presented as, \u2018Uber drivers are like me<\/i>\u2019.<\/i><\/p>\n

Drivers are rated by passengers at end of journey, and vice versa. Many of our passengers were unaware they were rated by drivers and could be refused rides if they had low ratings. As for rating drivers, most passengers would give stars, and would also drop stars occasionally\u2014some giving low ratings as a feedback \u2018service\u2019 to drivers.<\/p>\n

Ultimately, the Uber ride closes with payment. The automated \u201cpaymentless\u201d payment had unexpected ramifications; one was that parents could pay for their children\u2019s Uber rides (and thereby track their child\u2019s location via receipts). Alternately, one passenger commented on the awkwardness of trying to split an Uber fare after the ride, since no cash changes hands in the car.<\/p>\n

\u00a0<\/i><\/p>\n

Incumbent taxi driving<\/strong><\/p>\n

One impact of city regulation in both cities is that traditional taxi vehicles (the yellow and black cabs) are significantly more expensive than regular cars. This, combined with additional requirements such as a license to drive (SF medallion), means that drivers have large outgoing costs to meet before breaking even each day. As one driver put it to us, they didn\u2019t earn anything for the first three hours of their nine-hour shift.<\/p>\n

To get passengers, both London black cab drivers and SF drivers relied on watching for passengers hailing them on the street (although some used digital despatchers like Flywheel and Hailo). Our London drivers described the need to visually screen or \u2018interview\u2019 potential passengers before they got in to assess whether the ride might be worthwhile or \u2018troublesome\u2019. Taxi driving is dangerous, so some caution about passengers seems reasonable. Yet the \u2018interview\u2019 can cause issues for passengers\u2014regarding race and cab drivers, one study suggests taxis are around 11 per cent less likely to stop for a African American passenger (Cooper et al. 2012):<\/p>\n

\u2018Yeah, you have an interview at the door, you don<\/i>\u2019<\/i>t just get in. I always speak to ya before you get in.\u2019
\n<\/i>(London black cab driver)<\/p>\n

To add to these issues, incumbent drivers had to find good fares; one driver described how he targets hotels for passengers in need of an airport ride. Amongst drivers there was considerable competition over passengers and recent work discusses issues of taxi drivers\u2019 low mutual dependence and high mobility, (Elaluf-Calderwood 2009). Once hailed, the driver needs to navigate to the destination requested by the passenger. The London black cab drivers made least use of technology, relying instead upon their distinctive, expert knowledge of the city, which they were quick to defend \u2014 one driver mentioned that whenever pitted against a \u2018GPS\u2019, the black cab invariably won. London mini-cab and SF drivers navigated using a mix of their own knowledge of the city and GPS. Clearly the GPS has become an established part of taxi driving. The interaction with the customer is one part of the drivers\u2019 job that requires constant assessment and flexibility. Davis\u2019 classic paper stresses the importance, at that time, of tipping for drivers, and the lengths to which drivers went to maximise their tips (Davis 1959). Yet SF drivers also referred to cases where a passenger seemed in some financial difficulty and they would give a free fare, like one passenger on his way to be married. There was also a darker side of the relationship, with passengers behaving inappropriately in the car and causing additional time and cost for the driver but also acting as a potential risk. Working the night shift causes particular problems in that passengers are frequently inebriated, with resulting problems of behavior and violence. Threats include passengers running from a cab without paying or even attempting to rob the driver. <\/i>Indeed, cab driving is a dangerous business, (Gambetta and Hamill 2005).<\/p>\n

As for payment, our taxi drivers talked about the popularity of cash transactions. Along with the tradition of being a cash-only business, our London black cab drivers put this down to tax avoidance.<\/p>\n

\u2018We<\/i>\u2019re talking about tax evasion. That<\/i>\u2019s what you<\/i>\u2019re talking about.<\/i>\u2019<\/i> (London black cab driver)<\/p>\n

 <\/p>\n

Uber Driving<\/strong><\/p>\n

To become a driver with Uber is fairly streamlined; the driver, their documentation and vehicle are scrutinised and approved, if found suitable by Uber. This procedure requires little contact between driver and company, and is perceived by most drivers as rather effortless \u2014 as an example, the female Uber driver interviewed was recruited through Twitter. Thereafter the relationship between Uber and their drivers is managed almost entirely though the app and while this suited many drivers who prefer to stay out on the road, some were frustrated by low interpersonal contact with Uber staff.<\/p>\n

The working day of the Uber driver is somewhat similar to traditional taxi driver. While they do not have to pick up a taxicab\u2014because they must provide their own vehicle\u2014they nevertheless have to acquire customers, navigate to their destination and get paid. The Uber app is central to this work, amalgamating the ride dispatch function of a traditional cab firm, along with \u2018innovations\u2019 such as ratings, navigation and payment.\u00a0 To obtain fares an Uber driver logs into the app and indicates they are ready to drive, (these and other features can be seen in online videos used as part of their training program). While drivers can decide whether to accept a ride \u2014 they are only given a name, distance, address and passenger rating, and they are penalised if they reject too many rides. As one SF driver put it: \u2018this new technology matches you with the passenger.<\/i>\u2019<\/i> Once allocated a ride, the driver then needs to drive to and find the passenger. This can involve some searching and communication. The information provided to both driver and passenger via the Uber app make it easier to find each other, especially where supply may be contested, e.g., outside a busy club.<\/p>\n

The importance of navigation knowledge has radically diminished in taxi driving; while some of the Uber drivers we spoke with took pride in knowing \u2018their\u2019 city, most had not undergone any formal navigational training and relied heavily on GPS systems. While the Uber application provides an in-built map, navigation was largely conducted instead using Google Maps and Waze as they provide real-time traffic information. In turn, social interaction plays a more central role in the Uber driver\u2019s working life. Many drivers saw customer interaction as a positive job experience; some even claimed to drive for the social interaction with others.<\/p>\n

Another aspect of the app that differs from conventional cab driving is the use of ratings. Drivers are rated by passengers from 1 to 5, and low scoring drivers can be suspended from the Uber service. Acting as a form of surveillance, ratings force drivers to attend to passengers and causes anguish when their rating falls: \u2018\u2026we really work hard to have those stars.<\/i>\u2019 <\/i>This adds a form of \u2018emotional labour\u2019 (Hochschild 2003) to the job\u2014alongside the responsibility of driving safely and efficiently; the driver is required to adapt to customers\u2018 social and emotional needs. Thus, some Uber drivers mentioned feeling dependent upon somewhat arbitrary customer ratings. The rating system has, nevertheless, increased the drivers\u2019 sense of control and security; since customers are registered and rated through the app, the drivers now know who\u2019s getting into their car and that payment will be made\u2014making the work safer for them.<\/p>\n

The customer preregistration payment system has made Uber taxi payment easier, and drivers are no longer required to process transactions or carry cash in the car. However, some drivers criticised the practices of Uber in terms of dealing with pricing policy, suggesting that they are carrying the risks of driving alone. As one long-term Uber driver put it:<\/p>\n

\u2018They don’t spend the gas, they don’t spend the maintenance for the car, they don’t do nothing. How do you think they<\/i>\u2019re worth $15 billion? Do you think they make it from the customer? No<\/i>\u2026they make it from the drivers.<\/i>\u2019<\/i> <\/i>(SF Uber driver)<\/p>\n

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Contrasting Uber and Taxi drivers<\/strong><\/p>\n

The negative reputation of traditional taxi companies and moreover, their control over the car and the driver, play a factor in the choice of many Uber drivers to distance themselves from the incumbents. Uber drivers have some freedom and independence in choosing how many hours to work and when to end and start a shift, unlike most SF taxi drivers. Many of our interviewees were driving Uber part time, to supplement incomes.<\/p>\n

Yet this perceived independence stands in strong contrast to Uber\u2019s control over prices and commission.\u00a0In addition, the unobtrusive role the company adopts in daily business, is viewed with concern by some drivers. Uber itself is reduced to the app, company personnel can only be contacted through email. The flexibility and casualisation of the job can thus be seen as a blessing or a curse. While Uber calls their drivers \u2018partners\u2019, the drivers carry a big part of the risk and responsibility without being in control of fares or regulations.<\/p>\n

Finally, how much do Uber drivers actually earn? Uber provide only very general figures\u2014some media reports claim an hourly rate of around USD$27, with others claiming that after costs drivers make below minimum wage. In some markets Uber guarantee at least USD$15, and USD$25 at peak times. While this suggests Uber drivers are making more than existing cab drivers\u2014with Uber aggressively cutting rates, these figures could be in decline.<\/p>\n

 <\/p>\n

Discussion and conclusion<\/span><\/h1>\n

These interviews reveal how ridesharing is changing the nature of taxi services. The livelihood of drivers from Lagos to Shanghai is impacted by decisions made by those designing and implementing the Uber app: we need to move from notions of the \u2018app economy\u2019 to understanding the effects of the app in the economy. Our analysis seeks to focus on the changing everyday practice of drivers and customers, by paying attention to the app\u2019s role in managing labour and money. By avoiding simplistic descriptions of Uber as wholly \u2018good\u2019 or \u2018bad\u2019, we see whom it affects and how apps make winners and losers.<\/p>\n

At first glance both Uber customers and drivers are clear winners. The app circumvents the complex system of \u2018middle-men\u2019, to match customers and drivers together more efficiently. Our drivers wait less time for rides, and passengers get faster service. Yet this means that existing cab drivers, companies, owners of medallions and city authorities have less control over taxi driving, and passengers. While the app opens new customer segments by offering cheaper rates and efficiency, it excludes others without bank accounts and smartphones. Also excluded are existing cab drivers who don\u2019t fit Uber\u2019s preferred driver profile. This creates something of a two-tier cab market\u2014dividing both drivers and passengers. As the market leader, Uber now essentially sets the rates and working conditions for a considerable slice of the taxi driving market worldwide, undercutting years of government regulation. A central concern is what this shift in control means for the wages of drivers, which can now be cut (or raised) at will by the rideshare provider\u2014more broadly invoking a transformation of labour itself. A critical perspective might identify here processes of increased surveillance, deskilling, casualisation and intensification with the advent of ridesharing\u2014indeed, the critical might also question if Uber can be said to fairly represent the shared economy, which sets out to share profits and risk more equally and sustainably. This said, we should not discount the advantageous changes Uber brings to an occupation that was characterised by poor wages and conditions.<\/p>\n

Importantly though Uber drivers currently have no control over prices\u2014while previously they at least had forms of political representation with the ability to influence regulations. As for the increase in part-time work and casualisation of driving, for many drivers this is the appeal of Uber, while helping to deal with the spiky nature of demand. These considerations show that a more nuanced perspective on the economical effect of Uber must be critical, without ignoring the benefits for drivers and passengers that ridesharing can provide.<\/p>\n

In this paper we have tried to understand how an app can influence the economic and social conditions of users, drivers and passengers. This concern for understanding the economic role of apps\u2014echoes arguments of authors Harvey et al (2014) who provide a compelling critique of the \u2018pro-social\u2019 nature of technology research, identifying clearly different yet little expressed economic assumptions in work. It is clear that there is more work to be done in understanding not the app economy, but the app in the economy.<\/p>\n

\u00a0<\/b><\/p>\n

References<\/span><\/h1>\n

Aigrain, P 2012. Sharing: Culture and the Economy in the Internet Age<\/i>, Amsterdam University Press: Amsterdam.<\/p>\n

Belk, R 2014. \u2018You are what you can access: Sharing and collaborative consumption online\u2019, Journal of Business Research<\/i>, Vol. \u00a067, pp. 1595\u20131600.<\/p>\n

Cooper, J Mundy, R & Nelson, J 2012. Taxi! Urban Economies and the Social and Transport Impacts of the Taxicab<\/i>. Ashgate Publishing Limited: Farnham<\/p>\n

Davis, F 1959. \u2018The cabdriver and his fare: Facets of a fleeting relationship\u2019, American Journal of Sociology<\/i>, pp. 158\u2013165<\/p>\n

Elaluf-Calderwood, S 2009. \u2018Organising self-referential taxi work with mICT: the case of the London black cab drivers\u2019 (phd), The London School of Economics and Political Science (LSE)<\/i><\/p>\n

Fleisher, L 2014. \u2018Thousands of European Cab Drivers Protest Uber, Taxi Apps\u2019, Wall Street Journal<\/i>, 11 June<\/p>\n

Gambetta, D & Hamill, H 2005. Streetwise: How Taxi Drivers Establish Customer\u2019s Trustworthiness<\/i>, Russell Sage Foundation Publications: New York<\/p>\n

Hara, D 2011. \u2018Taxicab Regulations and Taxi Driver Income\u2019, report prepared for the Taxicab Inquiry of Victoria, Australia.<\/p>\n

Harvey, J, Golightly, D & Smith, A 2014. \u2018HCI As a Means to Prosociality in the Economy\u2019, in Proceedings of the SIGCHI Conference on Human Factors in Computing Systems<\/i>, CHI \u201914. ACM: New York, pp. 2955\u20132964.<\/p>\n

Hochschild, A R 2003. The Managed Heart: Commercialization of Human Feeling (2nd<\/sup> Edition)<\/i>, University of California Press: Berkeley and Los Angeles<\/p>\n

Hodges, G R G 2007. Taxi!: A Social History of the New York City Cabdriver <\/i>(1st<\/sup> Edition), Johns Hopkins University Press: Baltimore.<\/p>\n

Ikkala, T & Lampinen, A 2015. \u2018Monetizing Network Hospitality: Hospitality and Sociability in the Context of Airbnb\u2019, presented at CSCW 2015, ACM Press: Vancouver<\/p>\n

Maguire, M & Murphy, F 2014. \u2018Neoliberalism, securitization and racialization in the Irish taxi industry\u2019, European Journal of Cultural Studies<\/i>, Vol. 17, pp. 282\u2013297.<\/p>\n

Moore, A T & Balaker, T 2006. \u2018Do Economists Reach a Conclusion on Taxi Regulation?\u2019, Econ Journal Watch<\/i> Vol. 3, pp. 109\u2013132.<\/p>\n

Rayle, L, Shaheen, S, Chan, N, Dai, D & Cervero, R 2014. App-Based, On-Demand Ride Services: Comparing Taxi and Ridesourcing Trips and User Characteristics in San Francisco<\/i>, University of California: Berkeley.<\/p>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"

by Moira McGregor (Mobile Life @ Stockholm University), Barry Brown (Mobile Life @ Stockholm University) &\u00a0Mareike Gl\u00f6ss (Department of Informatics and Media, Uppsala University)   In the summer of 2014, four thousand London taxis brought the centre of London to a standstill following similar protests that had taken place in<\/p>\n

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