By V. Adams

Uber is part of the burgeoning ‘gig economy’ based on using a disruptive digital technology (in this case a ride-sharing app) to hail “everyone’s private driver” which is “better, faster, cheaper …than a taxi.

The existing fragmented for-hire taxi service industry may be flawed, over-regulated and too costly for many consumers to use. This does not mean, however, that fleet cab owners/licence holders and drivers should be tossed on the trash heap in favour of one Silicon Valley tech company, Uber.

This company’s ambition is to become the world’s largest logistics company as well as its premier personal ride/small parcel and meal delivery service. And now, with its key partner Google, it is poised to bring to market the next wave of new disruptive automobile technology – driverless cars.

Uber is a $40 billion market cap corporate juggernaut backed by a coterie of venture capitalists and partners such as Google and Goldman Sachs. Operating in 70 countries and more than 360 cities, it has a war chest of eight billion dollars. It uses this money to put pressure on local governments through well-paid lobbyists and an experienced legal team who make sure Uber is accepted and even anointed as a star in the “sharing economy.” The message to politicians and regulators - Uber has the playbook and calls the shots. If you want to survive in a world ruled by unicorns, you had better bend to their wishes.

In the words of Victoria’s Mayor, Lisa Helps, and her high-tech sector supporters, Uber offers citizens an opportunity to embrace “the way of the future.” The notion of ‘sharing’ in the digital economy is misleading.

Uber’s “game changing strategy” is a pragmatic business model based on “deregulation and self-regulation” to skirt social safety-net obligations. Is it also an elaborate tax avoidance scheme to hide profits in ‘safe havens?’

The sole purpose of this ‘gig’ is to amass untold wealth in the hands of its founders and investors at the expense of a vast low-paid contingency workforce.

A number of US-based studies show that the majority of Uber drivers already have a job and drive on a casual basis to supplement their incomes. Over half their drivers turn over annually with most of them barely making the minimum wage, while taxi drivers are seeing a 40 per cent reduction in income and are obliged to work 12-hour shifts just to make ends meet. In other words, few if any meaningful full-time jobs will be created in order to sustain the growing needs of their families.

This “new economy” employer relies on the fact that it has few employees. Uber has only “independent contractors” who receive rewards in the form of a percentage of the app fare. Since Uber does not pay employment insurance, Workers Compensation, CPP/OAS, medical insurance, fuel, vehicle insurance, maintenance etc., it can shift all these expenses onto its contractors while pocketing its own portion of the app fee with few deductions.

Uber will comply with the BC government’s regulated taxi industry framework to do business here. It will likely agree that Uber drivers must obtain a provincially-approved licence, pass a criminal record check and complete an annual vehicle inspection in order to obtain insurance - a small hurdle to jump in order to enter this lucrative underserviced market.

There is however no guarantee that Uber will offer their “cheap” service to patrons with disabilities, provide service outside affluent neighbourhoods, or provide regulated fares during natural disasters etc. In fact, Uber’s predatory “surge pricing” allows them to adjust fees based on mileage as well as supply and demand of cars and drivers. If few cars are available during a peak period, riders may find they have to pay through the nose and may yearn for the old yet familiar regulated taxi fare schedule.

There is no guarantee that Uber will respect the privacy of its ride-sharing patrons. The names and addresses of riders and their credit card information will be stored in a database together with their pick-up and drop-off information. In addition, their itinerary will be tracked by GPS installed in cars and synchronized with the geo-location app linked to Google Maps and retained on the company’s servers in one location. Uber may then share this valuable information with its partners and third parties including government security services or possibly even private firms wishing to pay dearly for vital “market intelligence” or corporate espionage.


Uber driver profiles:

Will Uber ever run out of drivers: Uber’s low retention rate: – half leave after one year

Uber drivers plan boycott after fare cuts slash their earnings below minimum wage – January 2016

40 per cent reduction in taxi revenue due to Uber: Montreal Gazette – Apr. 18/16

Taxi association urges Victoria to block arrival of Uber – Victoria News March 23, 2016

The Social Costs of Uber, Brishen Rogers, The University of Chicago Law Review

Canada Fact Check: Part 1 - Why Uber is bad for Canada – Feb. 2, 2016

 Canada Fact Check: Part 2 - The secret strategy behind the Uber invasion of Canada – Feb. 25, 2016

 Canada Fact Check: Part 3 - Uber in Canada: Cutting corners on taxes and benefits – March 12, 2016

Canada Fact Check: Part 4 - Uber in Canada: What governments must do to protect the public interest – March 30, 2016

Data is Uber’s. But protecting it may be its biggest weakness – The Washington Post – Nov. 18, 2014

Uber’s privacy woes should serve as a cautionary tale for all companies – – Jan. 2015

Uber’s privacy charges are overblown except-for one thing – Fortune, June 23, 2015

Uber and the growing threat of corporate surveillance – Nov. 21, 2014

 Stolen Uber accounts worth more than stolen credit cards – Jan. 19, 2016

Uber Transportation Service or Big Data Company

Uber: Big Data – April 13, 2016