Uber and the Modern Business Model of Exploitation

Daniel Drew,  11/21/2014


It is not easy to recall the last time a company of Uber's size has been the subject of a relentless wave of negative publicity. In Uber's case, most of it was brought on by itself.

Anyone can make $25 per hour, so they say. Previously, the marketing numbers were even higher, as much as $45 per hour. What's the catch?

You need to buy your own car, pay for all maintenance and fuel, pay toll road fees, pay 20% of your revenue to Uber, pay Uber to use their cell phone, maintain a 4.7 driver rating, violate your personal auto insurance policy, take strangers into your car with no physical safeguards, deal with possibly drunken and rowdy passengers, and now most recently, subject yourself to "God view," a GPS system that allows any Uber employee to see where you are.

All in a day's work.

But Uber isn't really new. It's just the latest player in the "Matchmaking" tech industry. Technology companies are not actually focused on improving business efficiency anymore. The new strategy is to play Matchmaker, to connect people for various activities. And that's all they do: Facebook connects people for superficial digital interaction, Uber connects people for transportation services, Washio connects people for laundry services, and Airbnb connects people for lodging services.

Here is where the story diverges.

Unlike the companies of yesteryear, Facebook, Uber, Washio, and Airbnb don't actually take any responsibility for providing those services. They want you to be the middleman. Moreover, they want you to pretend like you're just someone's pal who is "helping out." It's not a business! It's a community! Therefore, you shouldn't be treated like an employee. You're an independent contractor, at best.

The business model of the modern social tech company is dependent on avoiding licensing, regulation, insurance, standard labor costs, and basic business responsibility. Why should they manage a fleet of cars when they can convince you to drive your car? Why should they manage properties when they can recruit people to use their homes for hospitality? They are profiting off the property of other people without assuming any of the risk of property ownership. These companies don't even bother with the facade of some kind of leaseback agreement.

The Uber arrangement reminds me of an earlier time. In medieval Europe, feudalism was a system where peasants lived on the land of the lords, offering their labor in exchange for military protection. Uber doesn't even offer that much. They offer you commercial auto insurance, which is contingent upon you having personal auto insurance. But if your personal auto insurance company finds out you are an Uber driver, they will give you the Uber boot, and you won't have any personal auto insurance. That means no commercial insurance either. That means no more Uber driving, no more money, and a blacklisting from the personal auto insurance industry. Without personal auto insurance, you can't even drive on your own time.

So the next time you see Ashton Kutcher praising Uber, give him a shout out, "Dude, where's my car?"