Uber IPO Exposes Failures of Rideshare Corporations


The Uber IPO suffered the worst first-day dollar loss of any IPO in U.S. history. Things aren’t looking too hot for the rideshare giant: stocks in Uber are continuing to fall, and after the second day of trading, their valuation dropped to the lowest it’s been since July 2015.

The Lyft IPO, which opened in March, is similarly suffering, dropping almost 50% in value since its debut.

Concurrently, thousands of Uber drivers from around the world went on strike last week to protest the company’s flagrant mistreatment of its employees. Since Uber launched in 2009, drivers have endured a gradual systematic slashing of earnings, and now, with average earnings well below the federal minimum wage, many drivers are compelled to work longer hours while still living below the poverty line. To add insult to injury, Uber offers its drivers nothing by way of job security, insurance, workers’ union or health benefits.

Some might call the strike of gig economy workers anachronistic - rideshare drivers are technically self-employed contractors, and thus don’t necessitate the same securities as traditional salary or hourly wage earners. But something is amiss here. Uber won’t even acknowledge the protests. The corporation clearly doesn’t care about the drivers. And why should they? Drivers, according to Uber’s longstading masterplan, are merely a stepping stone, a way to siphon money and build a customer base while they prepare for the launch of fully automated self-driving cars.

While this may sound like more discouraging news for human drivers, the situation isn’t all bleak. Viable self-driving car technology is still questionable and at best years in the making, and even then, there will always be a demand for true peer-to-peer commerce and interaction.

Why do we need greedy tech corporations anyway? Drivers are, after all, self-employed independent contractors. Uber doesn’t provide any tools necessary to perform their services. Drivers own their own cars, pay their own car insurance, and use their own cell phones and data plans to contact their customers. Driver’s own the infrastructure. Uber is just the middle man - a logistics company.

There’s no need for rideshare drivers to remain beholden to the whims of predatory tech giants who don’t have their best interests at heart. Protesting is a great way to expose the unethical labor practices of the current system, but we have no reason to believe that Uber or Lyft will change their exploitative corporate strategies anytime soon.

What the rideshare gig economy currently needs is more grassroots organization on the part of the drivers - and for people everywhere to adopt the evolved tech models that can support their efforts. We need a full paradigm shift from platform corporations to platform cooperatives.

What is a platform cooperative?

A platform cooperative is a term coined by New School professor Trebor Scholz, used to describe a worker-owned and democratically governed digital service platform, where agents can exchange their labor without the need of an invisible middleman.

“Platform cooperatives offer workers dignity, financial stability, and higher social standards than those provided by the corporate sharing economy”, says Scholz.

Arcade City is one leading example of a platform cooperative - a driver owned and operated community that empower service providers with the ability to unionize, set their own rates, control their own reputation system, and form both local and global networks of solidarity with their colleagues and customers.

The tradeoff is, of course, that platform cooperatives require service providers to take the extra step and self organize. There’s a lot more work up front than simply signing up and clicking “accept ride”.

But in times like these, what could be more valuable than cooperative ownership and democratic consensus? Let’s harness the power of collective intelligence and do away with the unscrupulous middle man.