Uber’s the ugly face of capitalism: Efficient, smooth and exploitative

Sunday March 19 2017

Uber drivers protest outside Parliament Buildings on February 23, 2017 over the 25 per cent cut by the online taxi. PHOTO | DIANA NGILA | NATION MEDIA GROUP

Uber drivers protest outside Parliament Buildings on February 23, 2017 over the 25 per cent cut by the online taxi. PHOTO | DIANA NGILA | NATION MEDIA GROUP 

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Uber. So convenient. So efficient. The middle classes love it. For the “driver-partners”, though, the service is a waking nightmare.

To make any money from it, they have to work at least 15 hours a day virtually non-stop.

The company finally bowed to protests on Thursday and raised its fares.

But many Kenyans are only waking up to the ugliness of the technology-powered capitalism that defines the new global economy.

Just in the past week, two Facebook friends have told stories of encountering serious accidents involving Uber vehicles with clearly overworked drivers at the wheel.

The service is so successful because the basic idea is innovative and simple. You buy the car and find a driver for it.

Customers then download the app and when they need a taxi, they just click on a button on their phones, which relays the signal to a nearby driver.

Within minutes, the driver will be at your doorstep and you are off to the destination.

The trouble with these tech companies is that they believe in the most extreme version of capitalism, which is powered by the old mantra that “greed is good”.

Uber and similar rivals would still be successful without insisting on taking such high percentages of the earnings of their drivers and without working so hard to make sure they pay tax virtually nowhere.

Uber gets away with having no obligations for the welfare of their drivers because they are not employees but “partners”.

The economics is hellish for the drivers who were lured by extremely high pay when Uber launched, only for them to slash prices later.

Before the fare revision last week, a ride from the central business district to Westlands might have cost Sh200.

Uber takes 25 per cent of that, or Sh50. After accounting for fuel, the driver is left with very little.

Most drivers don’t own the cars and need to pay the owners a flat sum of anything between Sh2,000 and Sh2,500 per day.

To make that, they literally have to drive for up to 18 hours a day.

It’s a modern form of slavery although, in the new age, it is entirely voluntary and so successful because it is so seductive.

To the consumer, Uber is efficient and cheap. Too bad if the drivers are not getting a fair shake. It is capitalism, red in tooth and sharp in claw, to misquote the poet.

Uber is encountering pushback around the world. In the UK and India, authorities are investigating its tax arrangements.

The British parliament has held inquiries as to whether Uber drivers are able to earn a living wage.

The company was forced out of China after spending billions of dollars trying to out-compete a local rival.

Its problems are multiplying in America. Two hundred thousand customers deleted the app in January after it sent cabs to sabotage a strike by taxi drivers who were protesting Donald Trump’s ban on travel by citizens from several Muslim-majority countries.

A family in San Francisco has sued the company after one of its drivers killed their six-year-old daughter in an accident.

Company executives were forced to apologise after being caught boasting they could spend “a million dollars” to hire “four top opposition researchers and four journalists” to “help Uber fight back against the press” by looking into the personal lives of critical reporters.

That was all before Uber CEO Travis Kalanick was caught on tape in a bitter exchange with a “driver-partner” who said the company’s policies had driven him to the edge of bankruptcy.

Not everything is bad about Uber, of course. Competition can often lead to improvements.

Taxi drivers in Nairobi, Mombasa and many other cities were far too expensive before these disruptive options came on the scene.

They were notorious for bad business practices, such as stopping at a fuel station minutes after you board to refuel – and asking you to foot the bill and changing fares mid-journey not to mention driving poorly maintained cars.

The problem is that the new alternatives go to the other extreme. They are efficient and clean and cheap.

But their basic model is exploitative and driven by rampant greed.

As one writer opined in the New Yorker following Trump’s victory, the outcome may have been partly driven by a revolt against the new economy dominated by job-sucking tech giants headed by smart chaps with an “empathy vacuum”.

The Uber experience around the world – and Uber is only singled out here because it is the dominant player – just shows that there are few things like a perfect market in capitalism.

Regulation is always necessary to protect the interests of all parties.

[email protected] Twitter: @mutigam