Super Pumped: The Battle for Uber
by Mike Isaac · 2 Sep 2019 · 444pp · 127,259 words
especially Kalanick weren’t above playing dirty. They started booking secret meetings with regulators in San Francisco and encouraging them to go after Lyft and Sidecar. Where once Uber had scoffed at City Hall, now they implored city officials to shut the other companies down. “They’re breaking the law!” Geidt and
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its head. The mustachioed startup invited anyone with a car and an ordinary Class C driver’s license to start driving for Lyft. But as one Uber employee competing with Lyft at the time said, “The law isn’t what is written. It’s what is enforced.” To Kalanick’s dismay, SF transit
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with the gold medal at the end of the day, why even show up to the game? At Uber, winning meant the obliteration of any opponent. There wasn’t enough room for Uber and Lyft to coexist, he believed. The game was zero-sum. Every single ride-hailing car on the road in
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got a lot of catching up to do,” Kalanick would tweet at Zimmer. He loved adding the hashtag “#clone” to his tweets, insinuating that Lyft was an Uber copycat. Zimmer tried to take the high road when he responded, but Kalanick was pissing him off. “He wasn’t satisfied with winning,” one
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immediately after.” The tactic worked. Zimmer would soon get a call from the investor, apologizing and backing out of Lyft’s latest series. Wherever Lyft went, Uber showed up to harass them. One of Lyft’s most effective grassroots tactics was holding what they called “driver events,” small parties for a hundred people that
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of their T-shirt. The codes were for Lyft drivers to enter when they signed up for Uber, earning them a bonus. Even when they weren’t crashing Lyft parties, Uber found ways to mess with Lyft. All around San Francisco, Uber bought street signs and billboards targeting Lyft. Each billboard showed a large, black disposable razor
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blade with “Uber” printed on the handle, poised above one
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of Lyft’s pink, cuddly trademark. In the text beside
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doesn’t actually have access to running water, and might want that need met first, was a detail that the Uber CEO and his peers never addressed. *** Ridiculously enough, the idea for Lyft’s pink mustache sprung out of one employee’s recognition of the popularity of “truck nutz,” literally a pair
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, was a major hire who knew how to influence city-level as well as national politics. In Portland, Uber hired Mark Weiner, one of the most powerful political consultants in the city. In Austin, Uber and Lyft paid $50,000 to the former Democratic mayor to lead their campaign against regulation. Later, as
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didn’t think the public perception of him matched up to reality. Every time someone cited Uber’s belligerence, they cited Kalanick’s attitude toward Lyft, Uber’s closest US competitors. Reports that Uber employees were hailing Lyfts and then trying to recruit the driver were met with disgust—something that confused Kalanick and
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tasked his chief product officer, Jeff Holden, to drop everything and copy the carpooling feature immediately. Uber announced the impending launch of “Uberpool,” a carpooling feature, mere hours before Lyft announced the product it had invented. By the time Green and Zimmer hit the publish button on their corporate blog, they looked
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of a ride. It was a simple gesture that would earn the company significant goodwill with their driver base; besides, Lyft offered it. Yet Kalanick remained staunchly against tipping. Kalanick felt Uber worked so well because of the frictionless payment experience. A passenger could exit the vehicle without even thinking of money
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. He dubbed his late-night strategy meetings the “North American Championship Series,” or NACS, a nod to Uber’s competition with Lyft. The luckiest employees got to work on “Black Gold,” the code name for Uber’s Asia strategy meetings. The name was special: “Black Gold” was a reference to political corruption, the
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. Information about those vehicles was then sent back to Uber and stored in a database. “Hell” created a way for Uber to monitor the real-time positions of Lyft drivers. And because many of those drivers worked for Uber as well, Uber could monitor the rates Lyft was offering for drivers and outbid them, thereby swaying
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. “Scraping” was computer-speak for automating the collection of information through written programs and coded scripts. Uber’s most useful tool scraped information on pricing changes within the Lyft app, allowing Uber to systematically undercut its competitor. Uber also purchased receipts from companies like Slice Intelligence. These data-brokerage firms bought reams of anonymized
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up the results, analyzed them by sector, and packaged them for resale to other companies. Aggregate data for trip receipts from Lyft, for instance, allowed Uber to confirm its competitor’s prices. Combine that data with Uber’s scraped location and pricing data and the company could create a remarkably complete picture of
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that wouldn’t change for his entire tenure as CEO. In the beginning, it was Uber against the greedy, unethical taxi companies who had the sleazy local politicians in their pockets. Later, it was Uber against Lyft, the well-funded startup whose warm and fuzzy branding—those pink mustaches—was just cover for
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Travis Kalanick. It wasn’t that long ago that he had met with the co-founders of Lyft—Logan Green and John Zimmer—to discuss the possibility of a merger. Though Uber was soundly beating Lyft in the war for customers, the pink, mustachioed company still managed to raise money every six months
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or so to keep itself afloat. Executives at Uber figured it would be cheaper to purchase Lyft outright instead of continuing the ongoing price war. Kalanick had invited John Zimmer, Lyft’s president, to his apartment high up in the Castro hills, along with his lieutenant
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two sides presented what each thought would be a fair deal. But they had vastly different ideas of what fairness entailed. Lyft’s founders wanted a 10 percent stake in Uber for selling their company. Kalanick and Michael wanted something closer to 8 percent. As the sides worked toward a compromise—apparently
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signed off on the deal. What improved Kalanick’s mood even more was the state of play at Lyft. By the end of 2016, Lyft was struggling, bleeding capital in a subsidy war with Uber, but without the security of Kalanick’s financial backing. Kalanick took pleasure in hurting Green and Zimmer, and
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showed them no mercy. Joe Sullivan, Uber’s security chief, monitored Lyft’s websites, open-source repositories, and data, seeking a knockout blow. Kalanick was presented with a delicious new secret weapon by a group
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parts of a driver’s smartphone—specifically, the accelerometer and gyroscope—to detect the sound of notifications that came from the Lyft app. If Uber knew that a driver worked for Lyft, Uber could market itself differently to the driver—likely with cash bonuses—to entice them away from the pink moustache. In a
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, but Kalanick wouldn’t acquiesce for years; he wanted to gain insight into user behavior by seeing where people went after getting dropped off. Uber would outsmart Lyft at nearly every turn. Green and Zimmer were competitive and ambitious, but Kalanick always faster, and more willing to use questionable tactics. Kalanick didn
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’t just attack Lyft’s userbase, he went after their best personnel. Travis VanderZanden was an entrepreneur who sold his startup, Cherry—the “Uber for carwashes”—to Lyft in 2013. VanderZanden was a “hustler,” which Kalanick admired. In just a year, VanderZanden
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, the way is to avoid what is strong and to strike at what is weak. Lyft was weak; Uber was strong. Both companies were willing to make war, but Uber was faster, better capitalized, and more ruthless than Lyft. Whereas Green and Zimmer acted the part of nice guys, Travis Kalanick would do anything
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to win. As Lyft’s coffers emptied and the founders struggled to raise money, it looked like Uber was going to prevail. “Holy shit. Am I in over my head here?” Jeff Jones wondered. Perched at an empty
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, each tweet was a presidential proclamation. Where once the public and media had adored Big Tech—Facebook and Twitter gave people a voice, while Uber and Lyft gave anyone a ride—now the public devoured stories of state-sponsored hackers using vast databases of personal information to influence the election. Suddenly, nefarious
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money and on the verge of surrender, benefitted enormously from the backlash. People began to ditch Uber and switch over to Lyft. (Protest felt good, but people still needed to be able to call a car sometimes.) Lyft’s executives then pulled a well-executed PR stunt, publicly donating $1 million to the
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. And people started quitting. Whereas over the course of 2014 through 2016, Uber was hiring thousands of Google employees away, now Google began rehiring Uber’s conscience-stricken workforce in droves; Airbnb, Facebook, even Lyft started to pick off Uber employees. Uber needed to fix its morale problem. Fowler’s blog post had only made
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, and used forums like UberPeople.net to congregate, share information, and organize walkouts and other protests. Harry Campbell, an aerospace engineer who drove for Uber and Lyft on the side, started a personal blog to document tips and insights. He called it The Rideshare Guy. Drivers were starving for more help and
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set up special computer servers which were unconnected to the company’s primary infrastructure and kept “unattributable” to Uber. On those servers, Uber stored, processed and analyzed information Uber engineers had “scraped” or harvested from Lyft’s apps, websites, and code repositories. The team kept tabs on overseas competitors like Ola in India and
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access to closed WhatsApp group chats, hoping to gather intelligence on whether drivers were organizing or planning to strike against Uber. They conducted physical surveillance, photographing and tracking competitors at DiDi and Lyft, and monitoring high-profile political figures, lawmakers, and police in contentious cities. They followed people on foot and in
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on the competing company. SSG operatives recorded private conversations between opponents at DiDi and at Grab, their Southeast Asian competitor. One Lyft executive grew so paranoid about being followed by Uber that he walked out onto his porch, lifted both middle fingers in the air and waved them around, sending a message
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forced to undergo sensitivity training and executive coaching, but was not let go. POSTSCRIPT After months of speculation, Uber announced that it would hold an initial public offering in May of 2019. Lyft had debuted on the public markets just a few weeks prior at $72 per share. On the opening day
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would later tell reporters: Weise, “This Is How Uber Takes Over a City.” xiv the advertisements said: Alyson Shontell, “10 Ads That Show What A Circus the War Between Uber and Lyft Has Become,” Business Insider, August 13, 2014, https://www.businessinsider.com/10-uber-lyft-war-ads-2014-8#heres-a-similar-ad-that
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-suggests-ubers-are-better-than-taxis-9. Chapter 1: X TO THE X 3 according to
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a letter: Kara Swisher and Johana Bhuiyan, “Uber CEO Kalanick Advised Employees on Sex Rules for a Company
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/2013/11/13/snapchat-spurned-3-billion-acquisition-offer-from-facebook/. Chapter 9: CHAMPION’S MINDSET 82 Kalanick once said onstage: Liz Gannes, “Travis Kalanick: Uber Is Raising More Money to Fight Lyft and the ‘Asshole’ Taxi Industry,” Recode, May 28, 2014, https://www.recode.net/2014/5/28/11627354/travis-kalanick
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-uber-is-raising-more-money-to-fight-lyft-and-the. 82 “There’s been so much corruption”: Andy Kessler, “Travis Kalanick: The Transportation Trustbuster,” Wall Street Journal, January 25, 2013, https://www.wsj.
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like a fist”: Swisher, “Man and Uber Man.” 120 the impending launch of “Uberpool”: “Announcing Uberpool,” Uber (blog), https://web.archive.org/web/20140816060039/http://blog.uber.com/uberpool. 120 their corporate blog: “Introducing Lyft Line, Your Daily Ride,” Lyft (blog), August 6, 2014, https://blog.lyft.com/posts/introducing-lyft-line. 121 Lacy tweeted: Sarah Lacy
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(@sarahcuda), “it troubles me that Uber is so OK with lying,” Twitter, August 20, 2014, 7:01
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/sanjose/news/2016/03/18/mbas-are-increasingly-finding-a-home-in-silicon.html. 133 “In a meritocracy”: Uber’s list of 14 values, obtained by author. 134 Mohrer tweeted: Winston Mohrer (@WinnTheDog), “#Shittybike #lyft,” Twitter, July 11, 2018, 7:21 a.m., https://twitter.com/WinnTheDog/status/1017005971107909633. 135 designed an
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-campaign. 333 “Khosrowshahi has been perfecting his brand”: Jessi Hempel, “One Year In, The Real Work Begins For Uber’s CEO,” Wired, September 6, 2018, https://www.wired.com/story/dara-khosrowshahi-uber-ceo-problems-lyft/. 333 “He’s back?”: Anthony Levandowski, “Pronto Means Ready,” Medium, December 18, 2018, https://medium.com/pronto
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, 309, 312–13, 321, 324, 341 allegiance to Kalanick, 97, 270–72, 287–88, 299, 301 background of, 54–55 Lyft and, 86 selected to be Uber’s first CEO, 55–59 on Uber’s board, 79–80 Great Recession, 33–34, 132 Green, Logan, 85, 86, 120, 186, 187, 188, 189 Greyball
The Upstarts: How Uber, Airbnb, and the Killer Companies of the New Silicon Valley Are Changing the World
by Brad Stone · 30 Jan 2017 · 373pp · 112,822 words
one of its emerging competitors. As Andreessen Horowitz realized the magnitude of its mistake, it would lead one of the earliest fund-raising rounds in Lyft. Uber’s deal with Pishevar would also lead, indirectly, to the collapse of one of Kalanick’s closest friendships. Over the next few months, Pishevar
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rides in February 2012 via its apps for the iPhone and Android smartphones. Though it went out of business in 2016, outfinanced and outmaneuvered by Uber and Lyft, it can lay claim to being a pioneering ridesharing company.20 Anyone—not just taxi drivers or licensed chauffeurs, but your uncle Frank in
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(or vice versa, for that matter, though both companies clearly drew heavily from each other’s product features and rhetoric). In the Zimride founders’ view, Uber and Lyft were entirely different. “We didn’t think of them as similar to us,” Zimmer told me. “Our vision has always been every car, every
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got an education in the profound differences in these emerging markets. The taxi and limo companies all arrived separately, stating their gripes against Lyft and Sidecar but also Uber and, comically, one another, based on decades of simmering hatreds. Travis Kalanick also visited the CPUC conference room on the fifth floor
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Chicago, Austin, Brooklyn, and DC. The ridesharing wars had begun. Travis Kalanick had watched, waited, and even quietly agitated for Lyft and Sidecar to be shut down. Instead, they spread, undercutting Uber’s prices. Now that their approach had been sanctioned, Kalanick had no choice but to drop his opposition and join
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ever again.” Sidecar expanded too aggressively, and its drivers’ cars were impounded in New York, Austin, and Philadelphia.29 Lyft, more careful, was building a distinctive brand. It would become Uber’s most tenacious competitor in the United States. The lessons of the past year now seemed obvious. Moving cautiously and
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a traditional yellow taxi, UberX was, on average, 25 percent less expensive and was starting to dominate the emerging rideshare wars. Lyft and Sidecar had introduced ridesharing, but when Uber started aggressively rolling out the service, first in the United States in 2013 and then in Europe in 2014, the two
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from limos and town cars. It didn’t stand a chance against sustained popular demand for ridesharing. Lyft and then Uber would open for business in Miami-Dade a few months after the visit by Uber employees.2 Though the companies’ services were still technically illegal, courts only occasionally levied fines against
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higher demand. But it also accelerated the growth of UberX and, perhaps just as important, forced the less highly capitalized Lyft to introduce its own fare and commission cuts.8 Uber had discovered what startup gurus like to call the virtuous circle, the links between various parts of its business. Lower
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personal insurance policy, if it even paid up. Such a tragedy had been eminently predictable, and yet Uber, it seemed, hadn’t been ready for it. (That March, three months later, both Uber and Lyft introduced up to $100,000 of supplementary insurance to cover this gap.14 In 2014, the State
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to compound as their business grew. Less than a month after the Liu tragedy, an unseemly practice among the ridesharing startups roared into public view. Uber, Lyft, Sidecar, and a host of smaller players were only as strong as the number of drivers willing to open their apps, so they constantly vied
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went to dinner with Lyft president John Zimmer and Andreessen Horowitz partner John O’Farrell to discuss a deal, according to three people who were privy to the conversations. The meal was friendly, despite the heated rivalry. But Lyft’s expectations were high. In exchange for selling Lyft to Uber, Lyft’s backers wanted
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an 18 percent stake in Uber. Uber offered 8 percent; Kalanick wasn’t a fan of mergers to begin with and wasn’t about
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to hand over a fifth of his prize. Neither party would budge, and the talks fell apart. Lyft recovered quickly. That
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also took the unusual step of privately telling investors that if they wanted a chance to make an investment in Uber, they shouldn’t consider talking to Lyft.22 Uber was “going to Lyft’s investors and saying, ‘Hey, look, we’re open for business too. We’ll take an investment,’” Kalanick said
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to be changing the future of transportation, which will deliver a more people-centered city of tomorrow.”23 That July, Lyft started preparing to launch ridesharing in New York City, where Uber operated only with licensed professional drivers. Sidecar had attempted such a feat the year before, only to see its
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meetings with Meera Joshi, the taxi commissioner under New York mayor Bill de Blasio. Joshi informed them in strident terms that Lyft needed to register as a base and, like Uber, could use only TLC-licensed drivers. The next day, Zimmer and Estrada were called to the state attorney general’s
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service using professional drivers instead of regular people driving their own cars.27 In New York, Lyft would look like the original incarnation of Uber, deploying only licensed drivers. From there the battle between Uber and Lyft devolved further. In public, they accused each other of slogging—ordering and canceling rides and proffering
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founders found out about all this, they were livid. VanderZanden resigned in August and a few weeks later joined Uber as vice president of international growth. The lawsuits promptly flew. Lyft accused VanderZanden in California state court of downloading proprietary financial and strategic documents before he left.31 VanderZanden denied the
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personal information of some fifty thousand drivers. According to a deposition in VanderZanden’s case, Uber believed the culprit was Lyft’s chief technology officer Chris Lambert. (Lambert’s lawyer denied to Reuters that the Lyft CTO had anything to do with the data breach.)33 Things had gotten ugly fast and
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half of that by 2016.25 David Yassky, the chairman of the TLC between 2010 and 2014 (and a Lyft advisor), told me he felt the new restrictions were “pure protectionism.” Uber organized protests with riders and drivers at city hall, urging the city to abandon the new rules. On June
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told him that a law was about to be proposed in the city council to cap the number of new private-hire licenses granted to Uber, Lyft, and other app companies, pending the outcome of a study on congestion in lower Manhattan. “There’s nothing you can do to stop that
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one,” Joshi told Allegretti. “The votes are there.” The bill was proposed the next day, and it was as bad as Uber could have imagined. Under the legislation, Uber and Lyft could grow their supply of drivers by only 1 percent a month while the congestion study was conducted, which could take a
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certain level, but the drivers said that the company found a myriad of ways to disqualify them from the guaranteed wage. They also complained that Uber, unlike Lyft, had consistently refused to allow passengers to give them tips over the app. “Nobody in America wants to work more and earn less,” said
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in 2011, a Supreme Court ruling that allowed companies to force their workers to sign arbitration clauses that prevented them from bringing class-action lawsuits. Uber, Lyft, and the other companies in the so-called sharing economy gave plaintiff attorneys a high-profile opportunity to argue once again that workers were being
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stripped of protections. In 2013, Boston plaintiff lawyer Shannon Liss-Riordan brought such lawsuits against Uber and Lyft in the two states where she thought the law was most favorable, California and Massachusetts. She had previously brought similar, largely unsuccessful cases against
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are doing the jobs shouldn’t get benefits and the protections of employment,” she says. “That is the reason we have these laws.” Both Uber and Lyft tenaciously fought against the cases, arguing that the great majority of their drivers didn’t actually consider themselves full-time chauffeurs and wanted to remain
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independent and free to take other work. The cases against Uber and Lyft drew widespread media attention and produced an unrealistic expectation that they might somehow change the nature of the sharing economy and undermine
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such as giving drivers explanations if they violated company rules and got kicked off the app and creating an appeals process for those decisions. But Uber and Lyft drivers were going to remain contractors. “Drivers value their independence—the freedom to push a button rather than punch a clock, to use
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Uber and Lyft simultaneously, to drive most of the week or for just a few hours,” wrote Kalanick in a blog post titled “Growing and Growing Up” that
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in its belly.” Gang says Didi contemplated expanding into the States. Instead, in September 2015, it invested $100 million in Lyft. Then it established an anti-Uber ridesharing confederacy with Lyft and the regional ridesharing startups Ola, in India, and Grab Taxi, in Southeast Asia, all of them agreeing to share technology
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14, 2016. (Fernando Vergara/AP Photo) Taxi drivers demonstrate against Uber, in Cali, Colombia, on June 28, 2016. (Luis Robayo/AFP/Getty Images) Uber co-founders Garrett Camp and Travis Kalanick in front of the Eiffel Tower in Paris. (Courtesy of Uber) Lyft President John Zimmer wearing a frog costume to promote the ridesharing
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service Zimride in 2011. (Courtesy of Lyft) John Zimmer, co-founder and chief operating officer
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of Lyft, left, and Logan Green, co-founder and chief executive officer of
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latimes.com/business/la-fi-watchdog-peevey-20151230-story.html. 24. Sfcda.com/CPUC, January 11, 2013, http://sfcda.com/CPUC/Lyft_CPUC_SED_IntAGR.pdf. 25. Brian X. Chen, “Uber to Roll Out Ride Sharing in California,” Bits Blog, New York Times, January 31, 2013, http://bits.blogs.nytimes.com/
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New Times, June 4, 2014, http://www.miaminewtimes.com/news/uberx-will-launch-in-miami-today-defying-miami-dades-taxi-laws-6533024. 3. “Mayor Gimenez: Uber, Lyft Will Be Legal in Miami-Dade by End of Year,” Miami Herald, September 28, 2015, http://www.miamiherald.com/news/local/community/miami-dade/article36831345
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the Cheapest Car Service Available Anywhere,” TechCrunch, January 9, 2014, http://techcrunch.com/2014/01/09/big-uberx-price-cuts/. 8. Ellen Huet, “How Uber and Lyft Are Trying to Kill Each Other,” Forbes, May 30, 2014, http://www.forbes.com/sites/ellenhuet/2014/05/30/how
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-uber-and-lyft-are-trying-to-kill-each-other/#4a7e6b063ba8. 9. Carolyn Tyler, “Mother of Girl Fatally Struck by Uber Driver Speaks Out,” ABC7 News, December 9, 2014, http://abc7news.com/business/mother-of-girl-fatally
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www.privacyrights.org/employment-background-checks-california-focus-accuracy. 14. Don Jergler, “Uber Announces New Policy to Cover Gap,” Insurance Journal, March 14, 2014, http://www.insurancejournal.com/news/national/2014/03/14/323329.htm. 15. Harrison Weber, “Uber & Lyft Agree to Insure Drivers in Between Rides in California,” VentureBeat, August 27, 2014
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, http://venturebeat.com/2014/08/27/uber-lyft-agree-to-insure-drivers-in-between-rides-in-california/. 16. Bob Egelko
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, “Uber May Be Liable for Accidents, Even If Drivers Are Contractors,” San Francisco Chronicle, April 27, 2016, http://www.sfchronicle.
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Tactics,” CNN Money, January 24, 2014, http://money.cnn.com/2014/01/24/technology/social/uber-gett/. 20. Mickey Rapkin, “Uber Cab Confessions,” GQ, February 27, 2014, http://www.gq.com/story/uber-cab-confessions. 21. Ryan Lawler, “Lyft Launches in 24 New Markets, Cuts Fares by Another 10%,” TechCrunch, April 24, 2014,
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, July 14, 2014, http://technical.ly/brooklyn/2014/07/14/lyft-brooklyn-launches/. 27. “Lyft Launches in NYC,” Lyft Blog, July 25, 2014, https://blog.lyft.com/posts/2014/7/25/lyft-launches-in-nyc. 28. Casey Newton, “This Is Uber’s Playbook for Sabotaging Lyft,” Verge, August 26, 2014, http://www.theverge.com/2014/8
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travisv/status/530398592968585217. 33. Joseph Menn and Dan Levine, “Exclusive—U.S. Justice Dept. Probes Data Breach at Uber: Sources,” Reuters, December 18, 2015, http://www.reuters.com/article/uber-tech-lyft-probe-exclusive-idUSKBN0U12FH20151219. 34. Dan Levine, “Uber, Lyft Settle Litigation Involving Top Executives,” Reuters, June 28, 2016, http://www.reuters.com/article/us
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-uber-lyft-idUSKCN0ZE0FP. 35. Kristen V. Brown, “Uber Shifts into Mid-Market Headquarters,” San Francisco Chronicle, June 2, 2014, http://www.
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sfgate.com/technology/article/Uber-shifts-into-Mid-Market-headquarters-5521166.php.
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36. Mike Isaac, “Uber Picks David Plouffe to Wage Regulatory Fight,” New York
Wild Ride: Inside Uber's Quest for World Domination
by Adam Lashinsky · 31 Mar 2017 · 190pp · 62,941 words
more checkered, especially as various missteps caused many riders and drivers to sour on the company. Well-funded competitors also sprang up everywhere Uber did business. These included Lyft and Juno in the United States, Gett in Europe, Didi in China, GrabTaxi in Southeast Asia, and Ola in India. All raised
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percent of Americans had heard of the concept of ridesharing, just 15 percent had used a service like Uber and Lyft, and another 33 percent were unfamiliar with them altogether. Surveys suggest that Uber has had a meaningful impact on the life of young adults in urban areas but hasn’t yet triggered
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to Scour, would never forget the importance of rapidly innovating on a competitor’s good ideas. More than a decade later when he saw Lyft out-innovate Uber, he reacted quickly. Napster became a viral sensation and a part of the cultural conversation. It quickly outshined Scour: by 2001 it had
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to contact the state’s governor, John Hickenlooper, directly. In 2014, Hickenlooper signed a bill that lightly regulated Uber and its competitors, effectively legalizing the service. These battles played out almost everywhere Uber—and Lyft, often behind it—went. In early 2014, for example, the news site BuzzFeed counted seventeen active regulatory fights
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In most instances a massive lobbying and public-relations onslaught succeeded in allowing the ridesharing companies to operate. But not everywhere. In May 2016, Uber and Lyft left Austin, Texas, after refusing to comply with the city’s fingerprinting measures. New ridesharing services willing to comply with Austin’s rules quickly offered
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and nuanced term of art among tech companies. Only professional drivers sat behind the wheels of taxis—and, at the time, limos operating on the Uber platform. Lyft was different. In fact, it positioned itself as the antithesis of its better-known competitor. If
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Uber was “Everyone’s Private Driver,” charging a hefty premium over cabs, Lyft represented a friendly neighbor who’d invite you into her front seat, fist-bump you once you sat down, and charge you merely
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they weren’t illegal taxi rides and didn’t fall under any regulator’s jurisdiction. In reality, Uber worked only with licensed livery drivers; Lyft’s drivers were freelancing amateurs. Yet Lyft had one critical similarity with Uber in that its smartphone app adopted the push-a-button/get-a-ride simplicity that catapulted
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the limelight. The two companies were a study in contrasts, especially in their origins. Uber grew out of the San Francisco “brogrammer” culture and Garrett Camp’s delight in rolling in style. Lyft sprang from the idealistic mind of Logan Green, who’d served on the Santa Barbara, California, public transit
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in a limousine. Says Zimmer: “It was so popular so quickly we had to create a wait list.” Uber’s customers hadn’t needed to be told how to be chauffeured, but Lyft’s unique approach required some consumer training. “One thing that we had to solve that they didn’t in
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passersby tended to want to know why a fluffy pink mustache was attached to the front of cars on the streets of San Francisco.) Uber caught wind of Lyft, but initially it decided “ridesharing” not only wasn’t its thing but likely represented a violation of rules regulating taxis. “We watched it
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head of operations. “And we were keenly in touch with the reality that it was against the rules.” At first, Lyft assumed Uber would leave the grubby end of the market to them. “They had this view of a luxury lifestyle brand, and they had always been thinking
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market. In mid-2012 it experimented with offering inexpensive rides in fuel-efficient hybrid cars, calling the new service UberX. Yet as Lyft grew, especially in Uber’s home market, Uber was clearly rattled. Kalanick publicly showed his ire. On a March morning in 2013 he posted a message on Twitter suggesting that
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Uber had spoken to “dozens” of Lyft drivers who hadn’t seen Lyft’s insurance policy. About twenty minutes later, Zimmer replied, “Travis—seems like you’re fishing for info and might
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Zimmer some. Unable to resist, Kalanick shot back, “you’ve got a lot of catching up to do . . . #clone.” These were fighting words. Over time, Uber would frequently use “clone” to denigrate Lyft, including in its presentations for investors. It apparently stung that the smaller and less well-funded company had beaten
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to correct—and never make again. Kalanick wrote a white paper in April 2013 justifying Uber’s entry into the market for cars driven by amateur drivers. He concluded that the absence of regulatory action against Lyft in San Francisco amounted to a tacit approval to operate. As well, letting another
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pivot of its own, repositioning UberX and beginning to recruit drivers for its new service. It made no effort to simulate Lyft’s goofy hood ornament or faux-friendly demeanor; Uber was about getting an inexpensive ride from point A to point B as quickly as possible. The battle heated up rapidly
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. Lyft and Uber had begun to square off against each other across the United States. Lyft, in six U.S. cities a year after starting to offer ridesharing, sold its Zimride business to the
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car-rental company Enterprise Holdings, which continues to operate it and still caters to universities and companies. (Lyft, Zimride’s ridesharing product before the sale, became the company’s name.) Uber went through a product repositioning as well. UberX, initially promoted as an “eco-friendly” alternative to requesting a limo
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, became Uber’s taxi-beating offering. What had been Uber was now UberBlack, which in time became a tiny percentage of Uber’s business. Lyft may have had a new approach, but due to its head start with limos
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insert UberX. It operated in seventy-seven markets worldwide by the end of 2013. Size didn’t prevent Uber from feeling threatened by its pesky and preternaturally cheerful competitor. To keep Lyft in its place, Uber repeatedly used aggressive tactics against it. In 2014, the technology news site The Verge published a stunning
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exposé of Uber’s dirty-pool behavior in New York, where it hired temporary workers to use “burner” phones to request Lyft rides only to recruit drivers to its side. (The anonymous phones were to throw
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Lyft off the scent of who was punking them.) In e-mails, Uber encouraged its recruiters to “#shavethestache.” Uber owned up to “Operation SLOG,” saying its recruitment drive
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was fair competition. But after allowing Lyft to build one new market under its nose, Uber was ever vigilant about not letting it happen again. Both companies
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aiming to refine their offerings as well as to glean competitive intelligence. When Uber caught wind around the same time that Lyft was about to launch a carpooling service, Lyft Line, Uber announced UberPool, its own carpool product, the night before. Lyft would prove a stubborn number two. It raised first tens of millions, then
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hundreds of millions of dollars. Its most prominent early backer was Andreessen Horowitz, the same firm that had snubbed Uber in 2011. Lyft would continue to feel stymied by Uber, and not just in the competition for riders. “For a company so confident that it’s a single-horse race, they
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’ve historically been quite scared of us,” says Zimmer. As Lyft has discussed stakes with investors, he says, Uber has “tried to talk to whoever we’re talking to, somehow knowing sometimes pretty close to when we’re talking to them
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many drivers registering to offer rides through both services, depending on which company’s short-term incentives were better. Lyft would never come close to Uber in size. But its mere existence forced Uber to spend far more money than it had anticipated, denting and sometimes extinguishing its profitability. The cheerful pink mustache
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said, ‘Emil, we just raised $250 million. I don’t think we’ll ever need to raise money again.’” Circumstances suggested otherwise. With Uber combating Lyft at home and multiple players around the world, the company’s capital needs suddenly seemed endless. By mid-2014 Kalanick had indeed tapped Michael to
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Card] fanatic when I had that up.” If Kalanick was feeling the heat, it would only get worse for him and for Uber. The “Operation SLOG” campaign against Lyft had solidified a sense of Uber’s nefariousness among a growing slice of the tech-aware public. “Hopefully people understand what an evil company
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UBER is and boycott their service,” read one comment on The Verge, which published the exposé of Uber’s campaign against Lyft. Said another: “What can you expect when UBER’s CEO is another one of those Ayn-Rand loving libertarian nutjobs
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a fourth of the total. If investment hurt potential profitability, competition was a much bigger problem. During the first week of 2016 Uber’s primary competitor in the United States, Lyft, announced a partnership with and investment by General Motors. GM agreed to invest $500 million, with plans to build its self
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-driving car capacity on the strength of Lyft’s national network. Lyft gave GM a seat at the technology table. GM provided Lyft with money, which it promptly began using to take market share from Uber in crucial markets, including San Francisco and Los Angeles. Lyft’s market share in major markets typically
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had been around 20 percent. In early 2016, with Uber attempting to squeeze costs out of its operations, Lyft began taking share, growing its share to as much as 37 percent, by Uber’s calculations, in San Francisco. With similar products, market share was simply a function
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forgo profitability in a city like San Francisco to gain market share back,” says Gupta. By midyear, Uber had reduced Lyft’s share in the headquarters city they shared from 37 percent to 30 percent. Uber referred to this as a “balance sheet war,” and its balance sheet, with $5 billion at the
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time, was considerably bigger than Lyft’s. At the end of the day, Uber moves to the occasionally eccentric and frequently capricious beat of its CEO, who sometimes inspires and quite often infuriates even his most
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analytical yet passionate voice of independent-contractor drivers everywhere. Campbell started by writing about his own experiences as a driver, particularly for Uber, but also for competing services like Lyft and DoorDash and any other company pursuing a similar business model. He was bullish on the field, considering that he liked the
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The Rideshare Guy’s steadiest source of revenue is derived from the drumbeat of new drivers for Uber, Lyft, and other services. As Campbell’s blog is the go-to source for information about driving for Uber, anyone trying to learn the ropes checks it out. Despite having become too busy to drive
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the driver perspective, Campbell has a take on all the important debates involving Uber. In 2016 a federal judge in San Francisco overturned an agreement by Uber and Lyft with their drivers in California and Massachusetts that would have seen Uber paying out $100 million to confirm the drivers’ status as independent contractors.
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when to drive. “I don’t drive if it’s not surging.” A ridesharing driver since 2015—he also drives for Lyft—Snover has been able to track the decline in Uber payments. He says he earned about $1.50 per mile when he started out. That rate dropped to $1.20
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a mere 90 cents, which explains his surge-only practice. On the other hand, Snover deftly learned how to take advantage of the generous incentives Uber and Lyft have paid to build up their driver rolls. He said he got $500 for signing up his wife to drive for each service. Together
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with minimum-level bonuses, the two banked $1,400 from Uber and Lyft just for starting to drive. Many Uber drivers also follow a predictable path from excitement to disappointment to resignation. Bineyam Tesfaye, a former cabbie in Washington, D.C
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then bought Cruise Automation, a two-year-old self-driving car software company, for $1 billion. The GM investment allowed Lyft to continue competing in selected markets with Uber. It also gave GM a built-in partner with a national network so it could run experiments with its self-driving technology.
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enhance its business. An example was “Test Drive,” which allowed users to request specific models of cars they might then want to buy. Like Lyft and unlike Uber, Didi allowed tipping, a driver favorite. Didi also had something of a chip on its shoulder, an emotion not foreign to Travis Kalanick. Mindful
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’s cleverest defensive maneuver was to go on the offensive on Uber’s home turf. In September 2015, it invested $100 million in Uber’s main U.S. rival, Lyft. Then, two months later, it unveiled a cooperation pact with two other Uber adversaries, Ola in India and GrabTaxi in Southeast Asia. The
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alliance,” said Jean Liu, when asked its goals. This was all well and good, but not Didi’s main goal. It knew as well as Uber did that funding Lyft raised Uber’s costs in the United States, sapping its energy in China. Organizing the global opposition was a fringe benefit. In Didi
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’s because driver subsidies, passenger sign-up bonuses, and R&D investment costs obscured what kind of business Uber ultimately could be. Competitors promised to be a continued thorn in Uber’s side too. Lyft, flush with GM’s investment, continued to lose as much as $50 million a month. In early
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the travel ban in an upcoming meeting with the president. Then the situation got out of control. Overnight, anti-Uber fury spread on social media. The next morning, January 29, 2017, Lyft fanned the flames by announcing a $1 million donation to the American Civil Liberties Union over four years. Later that
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drivers affected by the ban, a move that appeared to be in reaction to Lyft. But the damage had been done. More than 200,000 users deleted their Uber accounts, and in an all-hands meeting that week Uber employees told Kalanick directly how upset they were with his involvement with the president
What's Yours Is Mine: Against the Sharing Economy
by Tom Slee · 18 Nov 2015 · 265pp · 69,310 words
in Silver Lake, California, it was Peers that rallied Airbnb hosts to lobby councilors on the company’s behalf. When Seattle City Council decided that Lyft and Uber were breaking taxi regulations, it was Peers that mobilized supporters to sign petitions. And these efforts were not in vain: they succeeded in getting
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victories they got the state of California to recognize a new category of transit organization called “Transportation Network Companies,” which created a framework within which Lyft, Uber, Sidecar, and others could operate legally, and which has been imitated in several other states since. In the summer of 2014, Peers listed 75 partner
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online labor market) is not. Airbnb is practically synonymous with the sharing economy, but traditional bed and breakfasts are left out. Lyft, a ride service company, claims to be in, but Uber, another ride service company, does not. Shouldn’t public libraries and parks count? When I posed these questions to a
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the picture has become even more exaggerated. As of August 2015 Airbnb has taken its fundraising to a massive $2.3 billion, Lyft had raised $1 billion, and its competitor Uber (not a Peers partner) had raised no less than $7 billion.10 What this all comes down to is that, while
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highest-profile campaigns, such as the 2014 ridesharing initiative in Seattle, operated side-by-side with well-funded efforts driven by Lyft and Uber themselves. Whatever the intent of the more community-focused Peers activists, the group functioned in part as a front for Silicon Valley lobbying. The funding
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companies highlights the contradictory currents that drive it. Billionaire and Amazon CEO Jeff Bezos has invested in both Airbnb and Uber; leading venture capital firm Andreessen Horowitz has invested in Airbnb, Lyft, and delivery service Instacart; Founders Fund, a firm set up and led by billionaire and PayPal founder Peter Thiel, has
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invested in Airbnb, Lyft, and TaskRabbit. Goldman Sachs is another investor in Uber as well as WeWork, which has also been funded by JP Morgan. Lending Club sends emails emphasizing that “Instead of paying
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month in October 2014. It remains to be seen whether BlaBlaCar can keep to its current model when pressure for returns from its investors increases. UBER Lyft may have started out with a message of community and sharing, but its bigger and more successful competitor
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over other black car services. Between 2009 and 2013 it grew quickly from city to city, but Lyft and other ridesharing services were offering lower prices. Belatedly, Uber recognized the cost advantage that ridesharing companies had, and decided that if it couldn’t beat them, it would join them: In most
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ridesharing apps. This course of non-action resulted in massive regulatory ambiguity leading to one-sided competition which Uber has not engaged in to its own disadvantage.19 So Uber launched UberX which, like Lyft, relied on unlicensed drivers with their own cars, many without commercial insurance. UberX has expanded with lightning speed
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drivers rose from under 10,000 in January 2013 to over 150,000 just two years later;20 in March 2015 Uber claimed to be available in about 300 cities across 55 countries (unlike Lyft, which operates only in the US); by August it was more like 450 cities in 60 countries
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luxury services, as well as delivery and logistics, but for now UberX makes up the bulk of its business. It makes sense to talk of Uber and Lyft in the same breath, despite their different images, because they have ended up offering essentially the same service. When, after a campaign by Peers
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and others, California became the first state to create a separate set of rules for what it called Transportation Network Companies (TNCs), Uber and Lyft were the main beneficiaries.21 The TNC framework has since been adopted by Colorado, as well as Seattle, Minneapolis, Austin, Houston, and Washington. While
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.” One effect of the transportation network companies’ rapid rise is that, in some cities, it could remove transit options for wheelchair users.64 If Lyft and Uber claim to provide urban transit then universal access is a challenge they must address, but there is little indication that they are doing so. In
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appropriate accommodations (there is no way to search for listings that provide disabled access, and few listings say whether they are accessible).66 Airbnb, Uber, and Lyft each take steps to nudge or encourage their service providers to provide disabled access, using language that emphasizes their commitment to helping disabled people. But
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, and the better experience of black customers is an unintended side-effect of Uber’s system. Uber drivers are not told where to drive, so they may avoid what they consider as “sketchy” parts of town, and both Uber and Lyft have been accused of “redlining”: not providing services to poor and minority neighborhoods
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.68 Numerous comments on social media suggest that one of the appeals of Uber and Lyft to young and well-off early adopters was that the drivers matched their age, educational-level, and social background more than did taxi drivers
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ratings that I collected from the ridesharing web site BlaBlaCar, on which over 98% of ratings are five stars. Ratings are not publicly available for Uber and Lyft drivers and riders, but both sites are known to “de-activate” drivers from the site if their rating drops below a cutoff in the
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is a detailed and careful analysis that comes to the same conclusion about Sharing Economy ratings as did Wired magazine’s Kat Kane, a regular Uber and Lyft customer. She admits to giving five-star ratings after white-knuckle rides, and her experience tells her that ratings are no indication of quality
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people staying in hotels, but when it comes to economic impact, it compares its impact to the same number of people staying at home. Uber and Lyft compare their environmental impact to people driving private cars rather than to people riding buses or taking the subway. They claim that their relatively small
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the hook if things go wrong. Successful Sharing Economy companies also avoid the expense of providing universal access provisions. In Chapter 4 we saw Uber and Lyft claim that access for the disabled is not their problem; suggestions that Airbnb’s platform inadvertently enables the propagation of racial profiling have met with
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done so in a self-interested way that continues to leave cities frustrated. Successful Sharing Economy companies have learned how to minimize insurance costs. Uber and Lyft started by arguing that no commercial insurance was necessary for private rides, and ever since have made efforts to minimize the coverage they provide in
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being an employer of the people driving the cars.” 21 Liss-Riordan has also taken up cases against Lyft, Handy, Homejoy, and Instacart. In June 2015, the California Labor Commissioner’s Office ordered Uber to reimburse one of its drivers, Barbara Ann Berwick, just over $4,000 in costs, deciding that Berwick
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was an employee of the company.22 The company will appeal the ruling, but it is a positive sign for Liss-Riordan’s cases against Uber and Lyft, which, as of May 2015, are headed to a jury trial. The employment status argument will no doubt drag on for a long time
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, Trust and Sustainability” 6, no. 3 (2001). http://www.socresonline.org.uk/6/3/chesters.html. Chu, Patrick. “Fedex’s $228 Million Settlement Could Dent Uber, Lyft, Postmates, Homejoy, Caviar and Other San Francisco Companies Using Low-Cost Independent Contractors for Labor.” San Francisco Business Times, June 16, 2015. http://www.bizjournals
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.com/sanfrancisco/morning_call/2015/06/fedex-settlement-uber-lyft-caviar-homejoy-labor.html. Clampet, Jason. “Airbnb CEO Responds to Illegal Rentals Story.” Skift, January 11, 2013. http://skift.com/2013/01/11/airbnb-responds
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? Staff Submits 5,560 Fake Ride Requests.” CNNMoney, August 11, 2014. http://money.cnn.com/2014/08/11/technology/uber-fake-ride-requests-lyft/index.html. Flamm, Matthew. “Strange Bedfellows in Airbnb Dispute.” Crain’s New York Business. Accessed May 9, 2015. http://www.crainsnewyork.com/article/ 20131013/HOSPITALITY_
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Trust in Society, 148–84, n.d. Gannes, Liz. “Competition Brings Lyft, Sidecar and Uber Closer to Cloning Each Other.” AllThingsD. Accessed May 22, 2015. http://allthingsd.com/20131116/competition-brings-lyft-sidecar-and-uber-closer-to-cloning-each-other-and-cabs/. ———. “Lyft Sells Zimride Carpool Service to Rental-Car Giant Enterprise.” AllThingsD, July 12
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, 2013. http://allthingsd.com/20130712/lyft-sells-zimride-carpool-service-to-rental-car-giant-enterprise/. ———. “Zimride Turns Regular
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to Canada.” The Toronto Star, November 21, 2014. http://www.thestar.com/business/2014/11/21/why_uber_has_a_canadian_privacy_problem.html. Geron, Tomio. “California Becomes First State To Regulate Ridesharing Services Lyft, Sidecar, UberX.” Forbes, September 19, 2013. http://www.forbes.com/sites/tomiogeron/2013/09/19/california-becomes
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://www.sfchronicle.com/bayarea/article/Airbnb-profits-prompted-S-F-eviction-ex-tenant-5164242. php. ———. “As Uber, Lyft, Sidecar Grow, so Do Concerns of Disabled.” SF Gate, February 25, 2014. http://www.sfgate.com/news/article/As-Uber-Lyft-Sidecar-grow-so-do-concerns-of-5240889.php. ———. “TaskRabbit Makes Some Workers Hopping Mad,” July
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to Hate,” Features, November 11, 2013. http://nextcity.org/features/view/the-black-car-company-that-people-love-to-hate. ———. “The Very Big Thing That Uber, Lyft and Sidecar Didn’t Get From California – Next City,” August 6, 2013. http://nextcity.org/daily/entry/the-very-big-thing-that
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-uber-lyft-and-sidecar-didnt-get-from-california. Scott, James C. Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed. Yale University
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$50 Billion Valuation.” The New York Times, May 9, 2015. http://www.nytimes.com/2015/05/09/technology/uber-fund-raising-points-to-50-billion-valuation.html. Tanz, Jason. “How Airbnb and Lyft Finally Got Americans to Trust Each Other.” Wired Magazine, April 23, 2014. http://www.wired.com/2014/04/trust
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News, November 19, 2014. http://globalnews.ca/news/1681159/is-john-tory-facing-an-uber-battle-at-city-hall/. Trautman, Ted. “Will Uber Serve Customers With Disabilities?,” June 302014. http://nextcity.org/daily/entry/wheelchair-users-ride-share-uber-lyft. Uber. Dynamic Pricing 101. Accessed June 12, 2015. https://www.youtube.com/watch?v=76q7PDnxWuE
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Nearly $100,000.” Entrepreneur, May 28, 2014. http://www.entrepreneur.com/article/234289. Wieczner, Jen. “Why the Disabled Are Suing Uber and Lyft.” Fortune, May 22, 2015. http://fortune.com/2015/05/22/uber-lyft-disabled/. Wilhelm, Alex. “Analyzing Postmates’ Growth.” TechCrunch, March 4, 2015. http://social.techcrunch.com/2015/03/04/analyzing-postmates
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-growth/. Wilonsky, Robert. “On the Same Day Dallas Task Force Begins Debating Car-for-Hire Rules, Cab Industry Sues Chicago over Uber, Lyft.” City Hall Blog, February 6, 2014. http://cityhallblog.dallasnews.com/2014/02/on-the-same-day-dallas-task-force-begins-debating-car-for-hire-rules
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-cab-industry-sues-chicago-over-uber-lyft.html/. Wohlsen, Marcus. “Google Pours Millions Into New Tech Gold Rush: Housecleaning,” December 52013. http://www.wired.com/2013/12/google-homejoy-funding/. Zervas, Georgios
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12 Gannes, “Zimride Turns Regular Cars Into Taxis With New Ride-Sharing App, Lyft.” 13 Gannes, “Lyft Sells Zimride Carpool Service to Rental-Car Giant Enterprise.” 14 Gannes, “Competition Brings Lyft, Sidecar and Uber Closer to Cloning Each Other.” 15 Lawler, “A Look Inside Lyft’s Financial Forecast For 2015 And Beyond.” 16 D’Onfro
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Post. 56 Peterson, “The Missing Data Point from Uber’s Driver Analysis.” 57 Baker, “Ubernomics.” 58 Guendelsberger, “Infographic.” 59 Booth, “Uber Whistleblower Exposes Breach in Driver-Approval Process.” 60 Biddle, “Uber Driver.” 61 Skinner, “California Prosecutors Say Uber’s Background Checks Missed Convicts.” 62 Said, “As Uber, Lyft, Sidecar Grow, so Do Concerns of Disabled.” 63
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Wieczner, “Why the Disabled Are Suing Uber and Lyft.” 64 Trautman, “Will Uber Serve Customers With Disabilities?” 65
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Strochlic, “Uber.” 66 Redmond, “Does Airbnb Have an
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ADA Problem?” 67 Peterson, “Uber Does Not Care about Racism, It Cares about Money
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.” 68 Wilonsky, “On the Same Day Dallas Task Force Begins Debating Car-for-Hire Rules, Cab Industry Sues Chicago over Uber, Lyft”; Peck, “Uber’s New Delivery Service Only Caters To D.C.’s White Neighborhoods.” 69 Hall and Krueger, “An Analysis of the Labor Market for
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. Code § 230—Protection for Private Blocking and Screening of Offensive Material.” 5 Electronic Frontier Foundation, “Section 230 Protections.” 6 Scola, “The Very Big Thing That Uber, Lyft and Sidecar Didn’t Get From California – Next City.” 7 LoGiurato, “This Is The One Law Airbnb’s Opponents Desperately Want To Change.” 8 Weise
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a Hellscape of Labor Code Violations.” 18 Huet, “Contractor or Employee? Silicon Valley’s Branding Dilemma.” 19 Chu, “Fedex’s $228 Million Settlement Could Dent Uber, Lyft, Postmates, Homejoy, Caviar and Other San Francisco Companies Using Low-Cost Independent Contractors for Labor.” 20 Pyke, “California Truckers Will Get $2.2 Million In
Uberland: How Algorithms Are Rewriting the Rules of Work
by Alex Rosenblat · 22 Oct 2018 · 343pp · 91,080 words
flexibility at work is important to him, because it enables him to see his younger children. Similarly, mothers of young children who drive for Uber and Lyft have told me they appreciate their ability to work in their spare hours without killing themselves to arrange childcare during an obligatory shift at Walmart
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of passengers before he accepted their ride requests.72 Another optimizer, Nicholas Stewart, is a former high school teacher who quit to drive for Uber and Lyft full time in Atlanta. He’d been driving for four years, though he planned to return to teaching in 2018–2019. When I interviewed
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than half of participants quit within a year.8 The ridehail model is geared to part-time work, according to later reports by Uber and Lyft as well. For example, Lyft surveyed 37,000 drivers and 30,000 passengers in fifty-two major cities. Its results, published in a 2018 report, state
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story: a typical driver I met in New York City worked full time for multiple apps (often two to three), such as some combination of Uber, Lyft, Juno, Via, and Gett. Indeed, a 2016 report by the Office of the Mayor in New York City states that, of taxi and for-
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drive. These differences can have significant impacts on drivers’ experiences. For example, many drivers, especially recreational hobbyists, cite the social connections they make through Uber and Lyft as a main motivation for working. Both occupational and part-time drivers may also enjoy this aspect of work: some are eager to practice their
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other drivers to chafe, in part because his alternatives are limited. Similarly, ridehail drivers with stronger occupational identities as drivers often evaluate the differences between Uber, Lyft, and taxi or truck driving with an eye toward the design of ridehail technology. Pierre-Alexandre, who is originally from Haiti, used to drive for
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Yellow Cab in New York before he started with Uber and Lyft while pursuing his MBA at an online college. During our interview in 2017, he references specific features that improved his sense of security: “The
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For Pierre-Alexandre, the design and affordances of ridehail app technology offer a kind of safety that taxis do not.28 Many newer drivers prefer Uber and Lyft to their alternative workplaces, but it is also typical for drivers to overestimate their earnings when they start. Drawn in by company advertising with
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to the city. There, unlike in other markets, drivers are regulated by the Taxi and Limousine Commission, and their capital costs to start driving with Uber and Lyft are higher. They need to pass fingerprint-based background checks, get a TLC license and plates, pass tests, take a class, and obtain commercial
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a week in cash. “I try it and I love it,” she tells me. “After that, my life changed. When after I been working with Uber, Lyft, Juno, I change. Because the money, its amazing schedule, you can have your own schedule, you met many different people, it’s amazing.” Smiling and
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the United States, with occasional posts by drivers in Canada and elsewhere. A charismatic presence, he also runs a YouTube channel documenting emergent issues with Uber, Lyft, and other ridehailing companies, as well as describing his experiences as a driver. Harry Campbell runs a blog called The Rideshare Guy, but blog is
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brand-builders are exceptions: they monetize their content-production, blogging, and forum administrator roles by, for example, promoting their driver referral codes to different services. Uber, Lyft, and other on-demand companies offer a “commission,” or referral bonus, to drivers who spread the word.12 Their real entrepreneurship is rooted in this
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cancellation fee despite their having requested it and despite their certainty that they waited six or seven minutes just to be sure. Tim, an Uber and Lyft driver in San Francisco, whom I introduced in chapter 1, has worked in customer service for twenty-five years. Our interview continued for hours
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they presume that all the other drivers are following them and, therefore, negating the premium levied for “low supply” compared to “high demand.” Doberman, an Uber and Lyft driver in Baton Rouge, Louisiana, whom I interviewed in the fall of 2017, said, with a thick Italian accent, “Unfortunately, I have two reasons
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In Los Angeles, Jose and I are chatting in his car when I ask him if he ever avoids certain neighborhoods when he drives for Uber and Lyft. He admits he stays away from areas like Compton, but his voice wavers off before he completes his sentence. Destination-based discrimination is
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already has a long-standing history of not stopping to pick up black (and particularly male) passengers.1 There are many concerns that drivers for Uber and Lyft perpetuate this type of discrimination, too.2 Going silent, Jose removes his smartphone from its mount and covers it with his left hand, pressing
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a greater toll in an employment context because drivers depend on these CSRs to resolve questions related to their livelihood. Ramon, who drives for both Uber and Lyft in Atlanta, told one story in our interview about a passenger who accused him of drunk driving in the “passenger feedback” comments. When I
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immigrated from Bangladesh and now drives in New York City, used to work for a black-car service in Long Island, before he switched to Uber, Lyft, and Juno. After a year, he left the ridehail world to become a Yellow Cab driver, a job he’d held for about six
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for political entrepreneurs who want to move the needle on data-collection and privacy debates. Kofi, whom I discussed in the introduction, is an Uber and Lyft driver I interviewed in Washington, DC. He was appalled when he learned first from the media in December 2017—rather than directly from his employer
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been waiting. There are a few ridehailing apps in this city of thirty-two thousand people, like Juneau Taxi and Tours. The spread of Uber and Lyft prompted local taxi businesses to build their own apps in many local cities across the United States and Canada, such as Plattsburgh, NY (Plattsburgh
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good hours. You work nine to ten hours, five or six days. Now you have to work six or seven days, twelve to fourteen hours. . . . Uber, Lyft, the others, they take too much. In the city, we have our expenses. The TLC plate, the extra fee for that, extra money for the
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step with ridehail companies. Yet when the Department of Motor Vehicles developed a license for the budding self-driving cars developed by companies like Uber, Google, Lyft, and others, Uber refused to cooperate, contradicting its stated rhetoric. Instead, it debuted its self-driving cars without licenses in the streets of San Francisco. When
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Both companies pulled out of the city in May 201627 and continued to lobby the state to pass legislation friendly to its business model.28 Uber and Lyft succeeded a year later, when House Bill 10029 passed the Texas State Senate30 and was signed into law by Governor Greg Abbott shortly afterward
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is that if regulations were left to municipal governances, the company would have to accommodate a messy patchwork of requirements. In forty-one states, Uber and Lyft have successfully lobbied politicians to pass laws that erase or mitigate how localities regulate these companies.32 While this approach is rational (it’s technically
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cold night in Toronto, Shelly shares her story with her riders about the consequences of impaired driving and how her life was changed forever.”61 Uber and Lyft both joined the cause against drunk driving, marketing their services as a hedge against death. And yet, New Year’s Eve is also
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: he’s a forum administrator, one of many across the globe who put in countless hours managing unofficial online communities where drivers who work for Uber, Lyft, and other ridehail services share advice and warnings, answer questions, and provide a rare sense of camaraderie. Another driver, Doberman, who is also an
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administrator of a forum group for Uber and Lyft drivers, in Louisiana, says about his own group, “I didn’t create the group to learn something from somebody, but to get together with
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the group dynamics of online forums derive from a common sense of the inequities that affect all drivers. At an individual level, some of the Uber and Lyft drivers I interviewed shrugged off pay discrepancies, while others were disturbed by them. (The combination of tipping and up-front pricing can also produce
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developed membership requirements and gatekeeping processes over time, meaning they technically aren’t open to the public. Often, drivers work for both Uber and Lyft, and even when drivers start Uber-focused forums, these quickly expand to include members who work for multiple employers. Drivers I spoke with in person in 2017 were
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routine workplace matters. For example, one common piece of advice I have found in driver forums is that drivers should refrain from reporting to Uber or Lyft when they have a fender bender or any light vehicle incident, like a scratch: drivers risk deactivation if they do. And not all forum
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conversation. I also focused on observing how drivers worked and on their car environment, such as how they managed ride requests from multiple apps, like Uber and Lyft, often from multiple phones. I’d observe the ways drivers personalized their cars (or not), or the placement and number of charger cords, whether
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involve a few questions that I might ask a driver I interview more formally, such as their motivations for driving or their views on Uber and Lyft generally. I still gather information on the driver experience through my observations and engagement as a passenger. The book draws on these trips as
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referrals. I also conducted formal interviews with two businessmen in the chauffeur industry so that I might learn about their perspectives on the advent of Uber and Lyft as part of my formal research. While much of my recruitment relied on my personal outreach to drivers, in some instances I received referrals
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and change the rates at which drivers earn their income. Finally, for users, both apps function in much the same way. In major markets, Uber and Lyft are both viable options: in San Francisco, for example, the two ridehail companies each make 170,000 trips per day, according to a report
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just more respectful and nuanced in its appreciation of drivers’ concerns. Still, drivers indicate that they drive more for Uber than Lyft because they get more business through Uber. “Uber is like Walmart, and Lyft is like Target” is how one driver in Salt Lake City succinctly summarized it. “You’d rather go to
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unwashed feelings people have about technology and society. In my travels, some regional differences have emerged over time in how drivers assess Uber and Lyft. In Salt Lake City, Lyft seems to offer enough work that drivers don’t need to seek work from more than one company. When drivers choose to
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Rogers, “Love in the Time of Ridesharing,” Motherboard, May 27, 2016, https://motherboard.vice.com/en_us/article/yp33yg/love-in-the-time-of-ridesharing-uber-lyft-romance-technology. 70. Lobel, “The Law of the Platform”; Calo and Rosenblat, “The Taking Economy.” 71. Tressie McMillan Cottom, “Credentials, Jobs and the New
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August 4, 2016, https://medium.com/uber-screeds/how-ubers-alliance-with-montr%C3%A9al-drivers-turns-labo-u-r-s-tactics-on-its-head-af490b252dae. 43. Alex Rosenblat, “Is Your Uber/Lyft Driver in Stealth Mode?” Uber Screeds, July 19, 2016, https://medium.com/uber-screeds/is-your-uber-driver-in-hiding-484696894139. 44. Mike Isaac
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, “Uber’s C.E.O. Plays with Fire,” New York Times, April 23, 2017, www
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Service Is a Great Side Gig,” The Points Guy, July 1, 2017, https://thepointsguy.com/2017/07/driving-car-service-uber-lyft/. 3. THE TECHNOLOGY PITCH 1. Uber, “Vehicle Requirements Boston,” n.d., www.uber.com/boston-drivers/requirements/vehicle-requirements/. 2. Alex Rosenblat, “What Motivates Gig Economy Workers,” Harvard Business Review, November 17
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the New World of White-Collar Unemployment (Ithaca, NY: Cornell University Press, 2011), 3. 6. Alex Rosenblat, “Uber’s Drive-By Politics,” Motherboard, May 27, 2016, https://motherboard.vice.com/en_us/article/gv5jaw/uber-lyft-austin-drive-by-politics. 7. Alex Rosenblat and Luke Stark, “Algorithmic Labor and Information Asymmetries: A Case
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Study of Uber’s Drivers,” International Journal of Communication 10, no. 27 (2016): 3763, http://ijoc.org/index.
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, 2017, www.theguardian.com/technology/2017/apr/27/airbnb-government-housing-test-black-discrimination. 27. Alex Rosenblat, “Uber’s Drive-By Politics,” Motherboard, May 27, 2016, https://motherboard.vice.com/en_us/article/gv5jaw/uber-lyft-austin-drive-by-politics. 28. Michael King, “Lege for Sale?” Austin Chronicle, March 14, 2017, www.
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updates/pages/florida-legislature-approves-ride-hailing-driver-bill.aspx; Dara Kerr, “Uber and Lyft Messed with Texas—and Won,” CNET, June 20, 2017, www.cnet.com/news/uber-lyft-toyed-with-texas-to-get-their-ride-hailing-way/; Kimberly Reeves, “Uber’s Big Win: Texas Ridesharing Rules Bill Passes through Senate,” Austin Business Journal
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in-24-cities-in-the-us; DrinkingandDriving.org, “Prevention Tools,” www.drinkinganddriving.org/designated-driver-services/. 63. Alex Rosenblat, “Is Your Uber/Lyft Driver in Stealth Mode?” Uber Screeds, July 19, 2016, https://medium.com/uber-screeds/is-your-uber-driver-in-hiding-484696894139. 64. Judgment of December 20, 2017, Asociación Profesional Élite Taxi v
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Economy?” n.d., www.alumni.ubc.ca/2017/webcasts/vancouver-slow-join-sharing-economy/. 13. Tracey Read, “Painsville Judge Requiring Drunk Driving Defendants to Download Uber, Lyft on Smartphones,” News-Herald, June 10, 2017, www.news-herald.com/general-news/20170610/painesville-judge-requiring-drunk-driving-defendants-to-download
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-uber-lyft-on-smartphones. 14. TOI Staff, “Traffic Jam as Waze Mistakenly Declares J’lem-TA Road Closed,” Times of Israel, February 22, 2017, www.timesofisrael.com
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Market Share Has Taken a Big Hit,” Recode, August 31, 2017, www.recode.net/2017/8/31/16227670/uber-lyft-market-share-deleteuber-decline-users. 4. San Francisco County Transportation Authority, “TNCs Today: A Profile of San Francisco Transportation Network Company Activity,” June 2017, www
WTF?: What's the Future and Why It's Up to Us
by Tim O'Reilly · 9 Oct 2017 · 561pp · 157,589 words
the pace of innovation increases. AI-powered personal agents like Amazon’s Alexa, Apple’s Siri, the Google Assistant, and Microsoft Cortana are unicorns. Uber and Lyft too are unicorns, but not because of their valuation. Unicorns are the kinds of apps that make us say, “WTF?” in a good way
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development itself, shaping content sites like Wikipedia and eventually enabling a revolution in which consumers would become co-creators of services like on-demand transportation (Uber and Lyft) and lodging (Airbnb). I was invited to give a talk at the same conference in Würzburg. My talk, titled “Hardware, Software, and Infoware,”
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other. In many ways, they are co-inventing the future of urban transportation. We will consider them together throughout the book. 3 LEARNING FROM LYFT AND UBER IN THE SUMMER OF 2000, MY EXECUTIVE TEAM AND I DID SOME work with Dan and Meredith Beam, of BEAM inc., a strategy consulting
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transportation, and make streets safer. When you make transportation as reliable as running water, everyone benefits. Here’s a possible business model map for Uber or Lyft like the one Dan and Meredith Beam drew for Southwest Airlines. What are some of the core elements of this business model? Replacing Ownership with
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Access. In the long run, Uber and Lyft are not competing with taxicab companies, but with car ownership. After all, if you can summon a car and driver at low cost via
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a Company. A traditional business that wants to grow must hire people, invest in plants and equipment, and build out a management hierarchy. Instead, Uber and Lyft have created digital platforms to manage and deploy hundreds of thousands of independent drivers, trusting the marketplace itself to ensure that enough of them show
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wages when there weren’t enough workers to meet demand.) This is a radically different kind of corporate organization. There are those who argue that Uber and Lyft are simply trying to avoid paying benefits by keeping their workers as independent contractors rather than as employees. It isn’t that simple. Yes
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to provide a five-minute response time over a far larger geographical area than traditional taxi and limousine companies. Management by Algorithm is central to Uber and Lyft’s business. It would be impossible to marshal the workers, connect drivers and passengers in real time, automatically track and bill every ride, or
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on the payroll—is a complex problem. Unlike the taxi industry, which creates an artificial scarcity by issuing a limited number of “medallions,” Uber and Lyft use market mechanisms to find the optimum number of drivers, with an algorithm that raises prices if there are not enough drivers on the road
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tell drivers that more (or fewer) of them are needed. Incentives to drivers, especially when entering new cities, has been one reason why Uber and Lyft have had to spend so much money to enter new markets. There are those who equate this behavior to dumping—selling goods and services below
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9, the right answer is to develop a social safety net and regulatory frameworks as flexible and responsive as the on-demand business model itself. Uber and Lyft (and Airbnb) have taken the approach of asking for forgiveness rather than permission for many of their innovations, relying on swift consumer adoption to
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choices about what’s important, rather than discovering too late that it broke a key part of what had made it successful. For example, Uber and Lyft have made much of their plans to incorporate self-driving cars into their future. With a shallow understanding of their business, you might quickly
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cars into the mix? They potentially destabilize their own marketplace. There will be significant costs to achieve the kind of availability for passengers that Uber or Lyft currently have using centrally owned self-driving cars. Remember that the total number of cars in the system must be sufficient to satisfy peak demand
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while meeting peak daytime demand with renewables. In order to maintain the benefits of the marketplace model, rather than deploying self-driving cars itself, Uber or Lyft might instead create incentives for its drivers to purchase them and make them available to the company. In many ways, this would change their business
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of Airbnb, in which the participants in the marketplace provide an asset they own rather than their labor. But for this plan to work, Uber or Lyft would not need to develop their own autonomous vehicles, but instead could promote interoperability between different autonomous vehicle vendors. If the plan is something like
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of vehicles, requiring investments in interoperable control and dispatch. (Tesla seems to have other plans, though, forbidding their drivers from using their cars for Uber and Lyft, with the intention of rolling out its own competing service. A business model does not exist in isolation; it must adapt to the competition as
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that tries to capture the essence of multiple companies, it’s important to recognize that neat categorization is a fool’s errand. For example, like Uber and Lyft, Airbnb is a networked marketplace, but it’s a network of apartments, homes, and rooms, and only secondarily the network of workers who
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partake in the larger dance, these interpenetrating trends influence each other and converge. With that in mind, let’s consider a generalized version of the Uber/Lyft map, which I’ve labeled below as the “Business Model Map for the Next Economy.” I’ve intentionally left some of the boxes for contributing
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move toward market demand rather than toward labor, because there are efficiencies to be gained from proximity to the market.” Networked Marketplace Platforms. Not just Uber and Lyft, but Google, Facebook, Amazon, YouTube, Twitter, Snap, Baidu, Tencent, and Apple draw a great deal of their strength from the fact that they
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app allows consumers to hire occasional labor such as movers, house cleaners, or gardeners at the touch of a button, into the same map as Uber and Lyft. Even Upwork, which lets you tap into a global marketplace of professional programmers, designers, and other skilled workers for short-term “gigs,” is
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and resources on demand. On demand affects both sides of the networked marketplace. Managed by Algorithm. The algorithms at the heart of a company like Uber or Lyft are computationally intensive, just like the algorithms at the heart of search engines, social networks, and financial markets. In many cases, the company with
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previously impossible. The amount of augmentation may vary. A service like TaskRabbit augments workers’ ability to find customers, but not to do the job. Uber and Lyft drivers have additional augmentation in their ability to navigate and find clients. Surgeons and oncologists might be working in traditional organizations but are cognitively augmented
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the leapfrogging progress of technology. Robin Chase, author of the book Peers Inc, describes how services ranging from Zipcar, which she founded in 1999, to Uber, Lyft, and Airbnb are all platforms for unlocking what she calls “excess capacity” and sharing it with others. They put together ordinary people (“the peers”) and
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what would once have been an enormous “slush pile” so that it becomes valuable to its customers and advertisers. Today, on-demand companies like Lyft and Uber in transportation and Airbnb in hospitality bring a similar model to the physical world. Finnish management consultant Esko Kilpi beautifully describes the power of these
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neither human nor machine, independent of their creators and less and less under anyone’s control. THE EVOLUTION OF PLATFORMS On-demand companies like Uber and Lyft are only the latest development in an ongoing transformation of business. Consider the evolution of the retail marketplace as exemplified first by chain stores, and
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number would be far higher. NETWORKED PLATFORMS FOR PHYSICAL WORLD SERVICES One way to think about the new generation of on-demand companies such as Uber and Lyft is that they are networked platforms for physical world services, bringing a fragmented industry into the twenty-first century in the same way that
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. Amazon takes the risk of not having enough delivery volume to keep them busy. While drivers may earn slightly less than the most successful Uber or Lyft drivers, the greater predictability has made Flex highly desirable to drivers. Even in a world of self-driving cars, it is possible to see
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Instagram and WhatsApp were sold to Facebook. It is why Twitter is still struggling. Ultimately, network businesses need to develop both sides of the market. Uber, Lyft, and Airbnb didn’t have the luxury of user growth without revenue. Unlike advertising-based startups that could sell out to an existing giant in
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the level of trust we’re willing to extend to strangers because the apps and algorithms provide a filter.” As the battles of companies like Uber, Lyft, and Airbnb with regulators demonstrate, though, the journey toward trust requires more than just getting consumers on board. Logan Green told me that
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is to give a one-star rating. However, this has not stopped opponents of the new services from claiming that the drivers provided by Uber and Lyft have been insufficiently vetted. While all of the new services perform driver background checks before they are allowed to offer rides, opponents argue that
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because they don’t require fingerprinting and FBI criminal background checks, an onerous and time-consuming step that, from the point of view of Uber and Lyft, is undesirable because it would limit the participation of part-time and occasional drivers, who provide a majority of the service on these new
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platforms. Uber and Lyft feel so strongly about this issue that they actually pulled their services from the city of Austin after it required fingerprinting and full FBI checks
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to believe that the evolution of Google Search ended in 1998 with the invention of PageRank. For this multi-factor optimization to work, though, Uber and Lyft have to make a deep commitment to evolving their algorithms to take into account all of the stakeholders in their marketplace. It is not
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way to achieve these objectives is to limit the number of drivers, and to certify those drivers in advance by issuing special business licenses. Uber and Lyft believe that their computer-mediated marketplace achieves the same goals more effectively. Surely it should be possible to evaluate the success or failure of these
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should be informed by data. Unfortunately, it isn’t just government that is unwilling or unable to put its data on the table. Companies like Uber, Lyft, and Airbnb jealously guard much of their data for fear that it will give away trade secrets or relative marketplace traction to competitors. Instead, they
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PARTIAL EMPLOYMENT There is no better demonstration of how outdated maps shape public policy, labor advocacy, and the economy than in the debate over whether Uber and Lyft drivers (and workers for other on-demand startups) should be classified as “independent contractors” or “employees.” In the world of US employment law,
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health benefits. Cost optimization for the company, not benefit to the customer or the employee, is the guiding principle for the algorithm. By contrast, Uber and Lyft expose data to the workers, not just the managers, letting them know about the timing and location of demand, and letting them choose when
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suspect that, over time, driver wages will need to increase at some rate that is independent of the simple supply and demand curves that characterize Uber and Lyft’s algorithms today. Even if there are enough drivers, the quality of drivers deeply influences the customer experience. Driver turnover is a key metric
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free trade, but are driven by fierce competition by companies to expand their market share, as Walmart and Amazon have done with consumer goods and Uber and Lyft have done with taxi fares. These upstarts upset the existing pricing equilibrium between companies and their customers in part as a competitive tactic, a
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for work. You can argue that that is one of the key drivers at the heart of the on-demand revolution that includes companies like Uber and Lyft, DoorDash and Instacart, Upwork, Handy, TaskRabbit, and Thumbtack. The drawbacks of these platforms in providing consistent income and a social safety net shouldn
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a problem for the law firm because their business model depends on billable hours. I quit just ahead of getting fired.” ACCESS TO OPPORTUNITY An Uber or Lyft driver demonstrates two different kinds of augmentation. The first is provided by Google Maps and similar services, which embed knowledge of the layout of
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leadership position in the emerging segment. This was true of Microsoft, of Google, Facebook, and Amazon, and it is also true of current disruptors like Uber, Lyft, and Airbnb or the researchers who are taking us pell-mell into a future of self-driving cars and other applications of artificial intelligence. They
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lower margins eventually go out of business or lack the resources to come up with innovative new products? What happens to driver income when Uber or Lyft cut prices for consumers in an attempt to displace competitors? Who will buy the products of companies that no longer pay workers to create
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workers, 320–21, 326–32 access to opportunities, 332–34 cognitive augmentation/cyborgs, 321–22 importance of learning, 334–36 neurotech interfaces, 328–32 at Uber or Lyft, 58–59, 69–70, 332 See also education/training; employees Autodesk, 327–28 Autor, David, 305–6 Avent, Ryan, 304, 348–49 Bad
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308–11, 323–24, 332–33 creativity-based, 312–19 displacement and transformation of, 94 and education/training, 303, 304 independent contractor status at Uber and Lyft, 59 labor globalization, 67 and new technology, xvii optimism about the future, 298–302 reducing work hours, 304, 308–11 replacing with higher-value tasks
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delivery drones, 370 on-demand education, 341–45 on-demand services, x, xxiii, xxiv, 67–68, 89, 92–95, 302, 309–10. See also Airbnb; Lyft; Uber on-demand talent and resources, 67–68 on-demand technology, 310 O’Neil, Cathy, 167–68 Open Source Initiative, 18 “Open Source Paradigm Shift, The
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, 32–33, 34–35 jobs resulting from, 94–95 as manifestation of the global brain, 46 National Highway Traffic Safety Administration regulations, 188–89 for Uber and Lyft, x, 62–64 self-service marketplaces, 91 sensors, xviii–xix, 33, 34–35, 40, 41, 85, 176–77, 326 SETI@home project, 26
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229–31 Turbeville, Wallace, 246 Turrings Cathedral (Dyson), 45 Twain, Mark, 5 Twilio, 84 Twitter, 42–47, 102, 206–7 Tyson, Laura, 67, 245 Uber (and Lyft), xi, 31, 46–47, 54–57, 85–86 augmented drivers, 58–59, 69–70, 332 background checks on drivers, 184 building both sides of marketplace
Hustle and Gig: Struggling and Surviving in the Sharing Economy
by Alexandrea J. Ravenelle · 12 Mar 2019 · 349pp · 98,309 words
I am going to be [sleeping] on a bench somewhere.’” Baran, twenty-eight, is a college student at a local university who drives for Uber and Lyft. In New York, app-based drivers have the same insurance and licensing requirements as taxi drivers, a cost that usually runs several thousand dollars. To
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sidestep this considerable start-up expense and the associated annual costs, some drivers rent a licensed, insured, and Uber-approved car through local services or utilize Uber
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“hosting guests” as she is renting her home out. TaskRabbit assistants and Kitchensurfing chefs aren’t “sharing” their services but being paid. Likewise, even though Uber and Lyft describe themselves as “ride-sharing,” charging for private vehicle transportation is simply a taxi or chauffer service by any other name. While
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cars, users were mistrustful of them and relied on the company to police the system. Researchers have suggested that Lyft’s lack of success in relation to Uber may be a result of Lyft “putting too much emphasis on consumers’ desire to ‘share’ with each other,” and that “consumers are more interested in
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regarding the changing relationship between worker and firm and the resulting workplace risks encountered by sharing economy workers. The majority of sharing economy workers—including Uber/Lyft drivers, TaskRabbit runners, Airbnb hosts, and Handy cleaners—are independent contractors. In recent years, the number of workers classified as independent contractors has grown steadily
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platforms give them little control over their labor, and that they are forced to shoulder personal and financial risks. Numerous lawsuits brought by workers of Uber, Lyft, and Handy argue that the restrictions on, and requirements for, workers mean they should be considered employees—not independent contractors. Other suits, such as one
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promised workers the opportunity to be their own bosses, drive without limits, and escape dispatcher favoritism (see fig. 7). Lyft, Gett, and Via soon followed with their own ad campaigns. Figure 7. Uber advertisement on the back of a Metropolitan Transit Authority bus in New York City. Photo by author. The advertisements
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.85 In the same way that a high percentage of cab drivers in New York are male (estimates range from 90 to 97 percent), all Uber and Lyft participants were male. Their ages ranged from twenty-two to fifty-nine, with 60 percent falling between twenty and thirty-nine years of age
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collected from drivers, that wasn’t the case in New York in July 2014, when Uber continued to collect 20 percent of the reduced fares. While drivers who utilize both platforms often view Lyft more favorably, Lyft has also cut rates—reducing fares nationwide in April 2014 by as much as 30 percent
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and the Plaza. And the Waldorf has—you have your own vanity inside the stalls, and it’s kind of ridiculous.” Larry, fifty-four, an Uber/Lyft driver, explained, “I have an app on my phone, a McDonald’s app. A lot of them are open twenty-four hours, and they’re
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have a homicide victimization rate that is between twenty-one and thirty-three times higher than the national average for all workers. Although drivers for Uber, Lyft, Via, and other car-sharing services do not carry large amounts of cash, they do carry valuable smartphones, tablets, and GPS systems. Additionally, for-hire
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fired from her hospital, and an Orange County Taco Bell executive who beat up his Uber driver was also fired. But these are only the incidences that are caught on tape. Cameras are not required by Uber or Lyft, and many drivers, whether owing to the expense or to concerns about the legality
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of the cameras, don’t have them. It doesn’t help that Uber has lobbied for weaker insurance protections for workplace injuries.20
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Uber has not entirely ignored worker risks—it’s just that any costs associated with
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full access to general liability insurance, auto excess insurance, and accidental occupational liability while on duty. Although most transportation and delivery services, such as Uber and Lyft, offer general liability insurance to protect individuals hurt by workers, the Postmates accidental occupational liability policy is otherwise unmatched by any competitor (as of this
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home of a fellow unknown either to cook (Kitchensurfing), or to sleep (Airbnb), or to clean, make minor repairs, or assemble furniture (TaskRabbit). Meanwhile, Lyft and Uber and other app-driven car services involve people getting in a stranger’s vehicle—violating one of the first “stranger danger” rules that many children
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car service does. How often do app-based drivers have sex with their passengers? It’s hard to say, and it’s doubtful that Uber or Lyft will be researching or publicizing such statistics anytime soon. Officials with the Whisper website, an anonymous social media site that allows users to post secrets
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and confessions, say that they’ve “vetted accounts of several people who said they have had sex with an Uber or Lyft driver, and of drivers who said they had sex with customers. And based on things such as geo-location of the posts and direct
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on, workers may be in a dangerous situation where it is safer to acquiesce than protest. This is especially evident with ride-sharing services such Lyft and Uber. New York is one of the few locations to embrace sharing economy drivers as its own: drivers are fully licensed by the Taxi and
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basically a piggy bank on wheels. You don’t want to make the opportunity for crime any easier than it is.”9 In part because Uber and Lyft drivers do not carry cash and are prohibited from picking up street hails in New York or accepting cash payments, there’s an expectation
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economy, where the app-based invisibility of payment, partnered with user profiles, promotes the idea of trustworthiness and small-town safety. When you request an Uber or Lyft, the company is supposed to have your name, credit card number, billing address, and photo on file—a taxicab driver simply has an anonymous
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week, I made about $1,200. So I was just saying, ‘All right, I made the right decision.’” Like many drivers, Hector drove for both Uber and Lyft, often deciding which app to activate based on the active guarantees and his own experience with passengers and demand. He described
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Lyft passengers as nicer, but also noted that Uber had more clients. Although his income appears to be higher than his earnings at the furniture rental center, the start-up costs of
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no record of who was in the car. Hector believes that ride-sharing services may be especially appealing to drug dealers because the prevalence of Uber and Lyft cars in the outer boroughs of New York City may mean that they are less likely to draw the attention of the police. Hector
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’s assumption may be right: research shows that Uber outperforms taxis in serving the outer boroughs of New York City.13 Eventually the young men began talking
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pool on my roof; I feature that too.” In New York, where app-based drivers are governed by Taxi and Limousine Commission rules, driving for Uber or Lyft has presented a high capital barrier. As noted previously, drivers must provide access to a relatively new car that meets
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Uber requirements (high capital investment). The background check, requisite driving courses, and commercial insurance requirements also constitute a considerable capital investment. However, there are ways around
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these barriers. In New York City, drivers can lease an Uber/Lyft-approved vehicle from another driver or from a car service. While the cost is high—Baran, twenty-eight, noted that at least two full days
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home and the decision to accept a guest. It’s this worker control that sets Kitchensurfing and Airbnb apart from TaskRabbit and car services like Uber and Lyft. While all four services promote the entrepreneurial ethos and promise that workers can be their own bosses (see chap 2 for a more complete
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discussion), workers were free to accept or reject as many gigs as they wished on Kitchensurfing and Airbnb. Unlike TaskRabbit or Uber/Lyft, where participants had to accept a certain percentage of gigs or face the risk of deactivation, Kitchensurfing and Airbnb workers were entirely in control of
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the financial implications of driving for the service. “According to an internal slide deck on driver income levels viewed by The New York Times, Uber considered Lyft and McDonald’s its main competition for attracting new drivers.”56 There are stories of super successful drivers, but their high incomes are not the
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result of just driving. In 2015, Forbes magazine highlighted an Uber driver who made $252,000 a year by turning his car into a jewelry showroom
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), or hired someone online for a task/errand (4 percent). The Pew study also found racial differences by service platform. Car services, such as Uber and Lyft, have been identified as helping equalize the playing field by reducing the discrimination that racial minorities may otherwise experience in hailing a cab. Latinos (18
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percent) and blacks (15 percent) were slightly more likely than whites (14 percent) to have used a transportation service such as Uber or Lyft. But, while 13 percent of white adults had used a home-sharing service, only 9 percent of Latinos and 5 percent of blacks had used
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a real need. Indeed, while I was doing this research, one of my family members, seeking to soften a financial blow, began driving for Uber and Lyft. As he put it, driving was helping “make ends meet.” As critical as I am of the sharing economy and its lack of worker protections
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the number of hours actually worked (factor 12, regarding payment), is he an employee or an independent contractor? If a driver can work for both Uber and Lyft (factor 17, regarding working for more than one firm), but her rates are determined by the services (factor 3, regarding integration), where does she
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and probably avoid detection by the boss at least some of the time, the app-based tools allow for constant tracking. Thanks to GPS systems, Uber and Lyft know exactly when a driver arrives, picks up a passenger, where he goes, and when he drops them off. With required in-app communication
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); Strandell (2015); Balsamini (2016) 28. Manjoo (2016). 29. Kwon (2005). 30. The vast majority of for-hire drivers—whether they drive yellow taxicabs or through Uber/Lyft or a black car service—in New York City are male. Estimates vary, but roughly 5 to 7 percent of drivers are female. Norén (2010
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Built a Company That Will Do Your Chores for You.” Business Insider, June 17. Kravets, David. 2016. “Judge Calls Uber Algorithm ‘Genius,’ Green-Lights Surge-Pricing Lawsuit.” Ars Technica, April 4. ———. 2017. “Lyft Agrees to Pay $27 Million to Settle Driver Classification Lawsuit.” Ars Technica, March 18. Kricheli-Katz, Tamar, and Tali
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Suspended, Responds to Anti-Semitism Accusations.” Michigan Review, March 28. Mangalindan, J.P. 2014. “In Price Wars, Some Uber and Lyft Drivers Feel the Crunch.” Fortune, May 28. Mani, Anandi, Sendhil Mullainathan, Eldar Shafir, and Jiaying Zhao. 2013. “Poverty Impedes Cognitive Function.” Science 341(6149):976–
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80. Manjoo, Farhad. 2016. “Car-Pooling Helps Uber Go the Extra Mile.” New York Times, March 30. Manning, Robert D. 2000. Credit Card Nation: The Consequences
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. Brescoll, Mark J. Graham, and Jo Handelsman. 2012. “Science Faculty’s Subtle Gender Biases Favor Male Students.” PNAS 109(41):16474–79. Murray, Rheana. 2014. “Uber, Lyft Drivers and Customers Kiss and Tell.” ABC News, July 30. Nadeem, Shehzad. 2015. “On the Sharing Economy.” Contexts (Winter). Nanos, Janelle. 2013. “The End of
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. “Airbnb’s New York Problem.” New Yorker, October 8. Tanz, Jason. 2014. “How Airbnb and Lyft Finally Got Americans to Trust Each Other.” Wired, April 23. Tedesco, Austin. 2015. “Boston Police Officer Indicted for Allegedly Assaulting Uber Driver.” Boston.com, April 2. Thompson, Derek. 2011. “America’s Post-ownership Future.” The Atlantic
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, William Julius. 1996. When Work Disappears: The World of the New Urban Poor. New York: Vintage. Wingfield, Nick, and Mike Isaac. 2015. “Seattle Will Allow Uber and Lyft Drivers to Form Unions.” New York Times, December 14. Wise, Scott, and Jon Burkett. 2016. “‘He Was Trying to Kill Me
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’: Uber Driver Attacked on I-95.” WTVR.com, April 25. Worstall, Tim. 2016. “US Median Household Income Is Now Back to Pre-recession Peak.” Forbes, August
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Iron Corporation, 68–69 Commission on Industrial Relations, 93 commission structure model: independent contractor status and, 199–201box 1; Juno/Gett, 190–91; Lyft, 75; TaskRabbit, 6, 80, 185; Uber, 75–76, 184; worker control and, 182 Committee on Public Safety, 93 communication issues: Airbnb, 63; anonymity and, 141; client/worker communication
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1906 and 1908, 93 enclosure movement, 66 entrepreneurial ethos: Airbnb, 44–45, 45fig. 6, 171; Kitchensurfing, 58–59, 161–62, 171; Lyft, 171; personal responsibility and, 181–82; TaskRabbit, 56, 171; Uber, 52–53, 171; worker control and, 64, 171 entrepreneurship: overview, 6, 23, 31; Airbnb and, 44; capital requirements for, 40
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homicide victim rate, 101; report on job injuries, 36 oDesk, 204 Omidyar, Pierre, 26 on-call services, 55 on-call taxi service, 26. See also Lyft; Uber on-demand contractor status, 202 on-demand economy: as form of sharing economy, 28fig. 2; sharing economy comparisons, 27; term usage, 5 on-demand platforms
The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism
by Arun Sundararajan · 12 May 2016 · 375pp · 88,306 words
) discussed her excellent early article on the sharing economy with my undergraduate class.3 You can transport yourself across short distances using apps like Lyft and Uber, platforms that connect drivers who have cars and are willing to give rides to people who need them. If a chauffeured car or taxi
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and was in 60 cities around the United States. Although often in the news because of the bruising battles it has waged with Uber for market share, Lyft projects a decidedly kinder and gentler feel than their larger competitor, even as they have graduated from the giant pink mustaches to a
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-founder and president John Zimmer, with whom I have had many fascinating conversations over the years, has famously said that he doesn’t see Lyft as competing with Uber, but rather, as competing with “people driving alone.”13 “For me, personally, it was my interest in hospitality,” Zimmer told me, when
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I asked him about his motivation for starting Lyft. “There are two main pieces in hospitality success: providing an amazing, delightful experience, and having high occupancy
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billions of dollars building elaborate public transit systems, often imposing crippling costs of both money and inconvenience on their city economies. Could apps like Lyft promise a different approach to building urban transportation infrastructure, foreshadowing a new kind of crowd-based public-private partnership, one that uses digital technology
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into decentralized excess capacity rather than creating new monolithic centralized systems? The Rise of the On-Demand Workforce One of the things that set Lyft and Uber apart from Airbnb is that the weekly time commitment of their “providers”—the folks who are sharing their time and assets to provide a
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service through the platform—is markedly higher. Although David Estrada, Lyft’s (then) head of government relations, told me in 2014 that two-thirds of Lyft’
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clever new public-private partnership model that can make benefits portable and stabilize people’s incomes over time? BlaBlaCar—Global Infrastructure Built on Trust Interestingly, Lyft’s original business plan wasn’t about transforming urban and suburban transportation. Rather, it was started by Zimmer and CEO Logan Green as Zimride,
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from large corporate brands, are no longer universal. Companies have started to rethink what they might deliver to this digitally enabled consumer base—imagine Uber without GPS-enabled smartphones; simply not possible at scale—and what workforce models might be now feasible when a smartphone-equipped crowd of independent contractors
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these companies have us engaging in behaviors that would have seemed unthinkably foolhardy as recently as five years ago. We are hopping into strangers’ cars (Lyft, Sidecar, Uber), welcoming them into our spare rooms (Airbnb), dropping our dogs off at their houses (DogVacay, Rover), and eating food in their dining rooms
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to play in today’s sharing economy. While there are other platforms that provide shared short-term accommodation (like Airbnb), or urban transportation (like Lyft and Uber), these platforms’ brand recognition continues to be a powerful factor in shaping their growth. In this respect, branding functions much like it does in
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’t transfer that reputation to Airbnb: you have to rebuild it starting from scratch. A star rating of 4.9 on Uber doesn’t help you get customers on Lyft. But this may change over the coming years. For example, the Madrid-based startup Traity is building a general-purpose portable
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adaptation requirements to address climate change in time to prevent the catastrophic change that we’ve set in motion.”20 The recent popularity of Uber’s UberPool and Lyft’s LyftLine services, genuine ridesharing that pair travelers going in the same direction and assign them a shared vehicle in real time,
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-mail-like discussion forums resembling today’s Google Groups, whose users sometimes facilitated the trading of items like live concert recordings.2 The emergence of Uber, Lyft, Airbnb, and Etsy might tempt one to conclude that Malone, Yates, and Benjamin had an especially astute view into the future. But are today
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VizEat and Eatwith, the local tour guide exchange platform Vayable (founded by sharing economy pioneer Jamie Wong) are decidedly more market-like, ridesharing platforms Lyft and Uber fall somewhere in between, and focused services or labor platforms like Luxe, Postmates, and Universal Avenue bear a closer resemblance to hierarchies than the
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corporate. However, within each of Owyang’s broader categories there are further distinctions. Transportation, for example, is divided into taxi-like transportation services (e.g., Uber), car loan services (e.g., Getaround) and car optimization services (e.g., SherpaShare). In other words, for each category there are gradients that draw
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of the app gets activated. You can then use your accumulated zooz to buy rides, much like you’d use currency to buy an Uber or Lyft ride. As Vitalik Buterin, an influential writer about decentralized peer-to-peer systems and the founder of Ethereum, a decentralized platform that runs smart
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its primary consumer site Taobao), Alibaba has a significant ownership stake in and control over a number of its highly efficient logistics partners. Similarly, Uber and Lyft rely on systems that optimize their current pool of available drivers in real time. Thus, although additive-manufacturing technologies such as 3-D printers
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as diversifying and expanding an existing economic model rather than replacing it.11 Of course, these platforms are also changing consumer behaviors along the way. Uber, Lyft, and Gett reduce traditional taxi use because they’ve made the service more convenient and less expensive, and because they’ve created more variety
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across firms.18 As a greater fraction of economic activity is conducted by individuals who either have more fluid relationships with firm-market hybrids like Uber, Airbnb, and Etsy, or are building expertise as small-scale entrepreneurs like David from RelayRides, quantifying these labor economic impacts of digitization gets increasingly
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to see a digitally induced economic revolution in the auto and transportation sector. The range of new peer-to-peer models—Uber to get a driven car on-demand, Lyft to see who else is driving your route, Getaround to see whose car in your neighborhood might be available for you
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levels of occupancy and average daily room prices.29 The same is not true of Uber and Lyft’s impact on traditional taxicabs. The key difference is that, rather than being merely a differentiated service, Uber and Lyft also display higher quality across the board on most dimensions that customer value, except perhaps
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it_hasn_t_happened_yet_and_both_are_thriving_what.html. 30. Jennifer Surane, “New York’s Taxi Medallion Business Is Hurting. Thanks to Uber and Lyft.” Skift, July 15, 2015. http://skift.com/2015/07/15/new-yorks-taxi-medallion-business-is-hurting-thanks-to
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-uber-and-lyft. 31. Josh Barro, “Taxi Mogul, Filing Bankruptcy, Sees Uber-Citibank Plot,” New York Times, July 22, 2015. http://www.nytimes.com/2015/07/23/upshot/taxi-mogul-filing-bankruptcy-sees-a-uber-citibank-plot.html?abt=0002&abg=1. 32.
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can’t get that done.”7 Of course, Airbnb is just one of many peer-to-peer platforms whose activities create new regulatory challenges. Uber and Lyft have faced regulatory pushback in a wide variety of cities looking to enforce taxi licensing laws. In particular, given its global footprint
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, Uber’s regulatory battles and their outcomes have been especially intense and varied. In 2015, its low-cost UberPop service has been banned in Paris
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and experienced talent with into the mix quite early, ranging from David Plouffe and Ashwini Chhabra at Uber, David Hantman and Chris Lehane at Airbnb, and David Estrada and Joseph Okpaku at Lyft to Althea Erickson at Etsy and Padden Murphy at Getaround. The platforms also make active use of
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“regulation as an intervention to correct market failure” approach, viewing the challenges raised by the sharing economy through this lens. As platforms like Airbnb, Lyft, Getaround, and Etsy disrupt old economic systems rooted in firm-to-consumer interactions and individual ownership, we are witnessing myriad regulatory issues. These issues,
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like Facebook and LinkedIn, and view digitally verified government IDs of providers. And this intervention doesn’t end with the use of digital reputation systems. Lyft, independent of any regulatory requirements, conducts in-person driver screenings that also include criminal background checks and an assessment of driving history. Similarly, as
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to consumers posed by part-time providers with judiciously designed safeguards. After all, most Airbnb hosts are not professional hoteliers, a large percentage of Lyft and Uber drivers are active on the platform fewer than 15 hours per week, and only one-fifth of Etsy sellers considers their Etsy business a
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brand cannot be underestimated in today’s sharing economy. We are still a population that places its faith in brand names: platforms like Airbnb, Lyft, and Uber understand this; eBay understood this when they created Power Sellers; and BlaBlaCar understands this when they place an explicit certification of trust derived from
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to-point urban transportation vehicles (taxis) need to conform to. But rather than taking on the burden of ensuring that the hundreds of thousands of Lyft, Uber, and Sidecar drivers across the state are compliant, they have instead delegated this enforcement responsibility to the platforms. A platform needs to register as
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case-by-case basis during face-to-face interaction, but which may be brought to light and addressed with data analytics. For example, Lyft and Uber would quite easily be able to detect and flag in real time the patterns of passenger accepts and refusals that might correspond to discriminatory behavior
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he moderated with Michelle Miller, the co-founder of coworker.org, after highlighting the opportunities created by the future of work heralded by platforms like Uber, Lyft, and TaskRabbit in an earlier keynote speech. But what exactly do these opportunities look like? On one side of the argument, there are the
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15, 2015. https://sherpashare.com/static/resources/SherpaShare-IndependentContractorEmployeeSurveyResults.pdf. 3. See the full docket report for the case, O’Connor et al v. Uber Technologies, Inc. et al https://dockets.justia.com/docket/california/candce/4:2013cv03826/269290. Judge Chen’s decision (filing #251) is available at https://docs
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/federal/district-courts/california/candce/3:2013cv03826/269290/251. 4. Quoted in Dan Levine and Edward Chan, “Uber and Lyft Fail to Convince Judges,” Business Insider, March 2015. http://www.businessinsider.com/uber-and-lyft-fail-to-convince-judges-their-employees-are-independent-contractors-2015-3#ixzz3UIFTYbVy. 5. I have heard Teran discuss
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tap in and tap out as needed, and as suits them.”5 However, this description does not apply to all sharing economy providers. Many Uber and Lyft drivers, Handy providers, and TaskRabbit taskers make a significant percentage of their living through the platforms, and the fraction of the world’s workforce
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mentioned in chapter 4, the latter scenario—a threat to any provider-dependent platform—is especially likely for taxi or chauffeured urban transportation platforms like Lyft and Uber, and geography-specific platforms like Instacart, TaskRabbit and Handy, where a majority of demand from each consumer is concentrated in a specific city,
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use its own centralized assets. A second dimension relates to pricing, supply, and merchandizing. For the most part, most sharing economy platforms—TaskRabbit, Airbnb, Uber, Lyft, Getaround—allow their providers to choose when they, their assets, or their services are available. This forces providers to “learn” how to manage their inventory
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days of week to be available as a Handy provider to help people move. There is also variation in the level of pricing control. Uber and Lyft define prices in each of their cities, while Sidecar allowed drivers to set their own prices. TaskRabbit allows home cleaners to choose their own
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, Getaround providers, and Airbnb hosts have to invest significantly in merchandizing (photos, copy that describes their products or properties, and so on), while Uber and Lyft drivers are not called upon to do this, although this perhaps reflects the service being offered rather than the nature of the platform itself. Analogously
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good business sense. In a 2014 Fast Company article, Lisa Gansky summarized the early evolution of the sharing economy by indicating that “early companies like Uber, Lyft, Quirky, Airbnb, TaskRabbit, RelayRides, and 99 Designs garnered much visibility, but these companies were funded by venture capital, with an eye on big paydays
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.pdf; detailed supplementary guidelines are available at http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee. 3. Fox, “Uber and the Not-Quite-Independent Contractor.” 4. Often called the “congressional watchdog,” GAO investigates how the federal government spends taxpayer dollars. The report is
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Commons: The Evolution of Institutions for Collective Action (Cambridge, UK: Cambridge University Press, 1990). 31. http://www.fastcompany.com/3057014/fed-up-with-uber-and-lyft-drivers-plan-to-launch-competing-app. 32. Lisa Gansky, “Collaborative Economy Companies Need to Start Sharing More Value with the People Who Make Them Valuable
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and parts of Asia, radically reshaping the automobile industry, shifting market power away from today’s leading manufacturers and towards a range of technology platforms—Uber, Lyft, Didi Kuaidi and Ola, as well as Apple, Google, and perhaps even Amazon. In parallel, the additive manufacturing revolution will change how artifacts are
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CPUC), 153–154 Capalino, James, 136 Capital in the 21st Century (Piketty), 123 Card, David, 166 Car sharing, 1, 3. See also BlaBlaCar; Getaround; Lyft; Turo; Uber data science and, 157 La’Zooz, 94–95 local network effects, 119–120 regulatory challenges, 135 trust and, 98 Cartagena, Juan, 65 Castor, Emily, 9
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191 platform, 84 platform independence, 194 pricing, supply, and merchandizing, 194, 195 regulatory challenges, 135 social capital and, 62, 64 trust and, 145 UberPool, 66 “Uber Alles” (Surowecki), 19 Ulbricht, Ross, 86 Union Square Ventures (USV), 17, 23, 25, 85–86, 90, 157, 189 United States Conference of Mayors, 131,
The Business of Platforms: Strategy in the Age of Digital Competition, Innovation, and Power
by Michael A. Cusumano, Annabelle Gawer and David B. Yoffie · 6 May 2019 · 328pp · 84,682 words
third-party suppliers to create all of the millions of software applications that work on their platforms, even though they built some applications themselves. Similarly, Uber, Lyft, Didi Chuxing, and Airbnb did not have to own any of the cars and homes that their users accessed when they got rides or rented
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, iPhone, Facebook, or WeChat developer networks, or the millions of people with rooms to rent or cars to drive who have already registered with Airbnb, Uber, Lyft, and Didi Chuxing. As the number of complementors grows, it becomes increasingly difficult for a new firm to enter late and build a competing ecosystem
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. Think about how expensive it would have been if Airbnb had tried to buy all the homes and apartment buildings its users accessed, or if Uber, Lyft, or Didi had tried to buy all the vehicles its drivers use. In short, we learn from looking at market fundamentals that a platform business
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, with few active complementors and only around two dozen employees.3 TRANSACTION PLATFORMS Transaction platforms, such as Amazon Marketplace, Google Search, Facebook, Alibaba’s Taobao, Uber, Lyft, and Airbnb, are online marketplaces that enable the exchange of goods, services, and information. They can help people or organizations access and use assets such
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several cost drivers before it can earn a profit. To compete with taxis as well as other companies such as Lyft, Uber subsidized the cost of rides, keeping prices artificially low. Uber also paid many drivers a set fee in addition to per-ride compensation or had to pay other financial incentives to
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capital providers (largely sovereign wealth funds and SoftBank’s Vision Fund). Investors seem to be betting on a winner-take-all-or-most outcome where Uber outlasts both digital and conventional competitors, and then eventually raises prices or reduces costly subsidies. Second, transaction platforms “reduce friction” to facilitate interactions among platform
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, smartphones, consumer electronics, video game development, and cloud-based hosting and application development environments. Nonetheless, the fact that transaction platforms like Amazon, Facebook, Tencent (WeChat), Uber, and Airbnb were adding innovation platform functions suggested that managers and entrepreneurs should take a much broader view of where they can build useful innovation
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marijuana rather than rides, a tacit admission that it had lost its battle to compete with the larger and more well-known ride-hailing platforms Uber and Lyft.3 That pivot failed to pay off, and the company announced it would suspend operations entirely on December 31. The next month it announced
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service.4 Sidecar never became a household name. Its failure was nonetheless significant because Sidecar had pioneered the peer-to-peer ride-sharing model before Uber and Lyft transitioned their start-ups into the space. By 2015, ride-sharing platforms—where smartphone apps connected riders with nonprofessional drivers operating their personal vehicles
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. Uber, also based in San Francisco, had been in business since 2010, when it started as a way to request and pay for a traditional black town car using a smartphone app. By the time Sidecar launched in mid-2012, Uber had expanded to seventeen cities. Its model differed from Sidecar and Lyft
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in that Uber at that time partnered with existing taxi and car services, so its drivers were professional drivers, including the
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lower-cost UberX service introduced in July 2012. Recognizing the threat from Sidecar and Lyft, which could offer lower prices because of the
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reduced licensing and insurance costs faced by nonprofessional drivers, Uber responded. In September, Uber CEO Travis Kalanick told an interviewer, “If somebody’s out there and has a competitive
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the question is can you create a low-cost Uber? Uber has to become a low-cost Uber as well.”10 In April 2013, Uber announced it would begin offering ride-sharing services from nonprofessional drivers using their personal vehicles in cities where Sidecar and Lyft operated and began rolling out the platform under the
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-mover advantage. By mid-2015, Uber had expanded to 300 cities around the world and had signed up its one-millionth driver, including over 150,000 active UberX drivers in the United States, and claimed to cover 75 percent of the U.S. population.11 Lyft had expanded to 65 cities with
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100,000 drivers, all in the United States, by March 2015.12 With Uber and Lyft in the market, competition for drivers and riders was fierce. Both Uber and Lyft aggressively recruited drivers, offering cash bonuses of up to $500 or even $1,000 for drivers who switched from
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also received bonuses by referring drivers from another platform. Riders received credits for their first ride and additional credits when they referred other riders. Uber and Lyft periodically cut fares to attract riders. Although the companies claimed that increased ridership would more than make up for the reduced fares in putting money
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in drivers’ pockets, they took additional steps to avoid alienating drivers when they cut fares. When Uber cut its fares by 20 percent in January 2014
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, for instance, it reduced its commission on each ride from 20 percent to 5 percent until April, when it raised its commission back to 20 percent on the new, lower fares. Lyft followed suit, dropping its fares
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20 percent in April 2014, and reducing its commission to zero. On and off again subsidies for drivers increased the number available on both Uber and Lyft. Uber and Lyft both lost money as they pursued aggressive growth strategies and incurred enormous costs just to find and replace drivers. For example, as we noted
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in Chapter 3, Uber in 2017 lost $4.5 billion despite gross booking revenues of $37 billion. Although Lyft and Uber were primarily targeting each other in their aggressive strategies, Sidecar was caught in the cross fire and attempted
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compete at the scale of its rivals. Once Sidecar fell behind in recruiting drivers and riders, network effects made it extremely difficult to compete. Lyft and Uber were able to sustain their aggressive growth strategies because they had raised billions of dollars in equity capital. By contrast, Sidecar had raised only $39
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offer promotions—$500 for a driver, or $20 credit—versus our more typical $5 offerings of credit.”16 Sidecar’s failure to keep up with Uber and Lyft in raising capital was a strategic blunder: Management misread the competition, misread the critical role of a supply side (drivers) for a platform market
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to his rival: “In some ways, I’m proud of Uber. They were able to take the ride-sharing innovation, rebrand it as UberX, and grow it and scale it like clearly no one else was able to—us or Lyft. It shows that our idea really does work. We’re still
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proud of the authorship even if it ends up being executed by someone else.”19 Of course, the jury was still out on Uber, as well as Lyft and other ride-sharing platforms that relied heavily on driver and rider subsidies. Beyond its enormous expenses and financial losses
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, Uber had to contend with new attempts to impose a minimum wage and regulate the number of drivers. In August 2018, for example, the New York
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causing severe financial hardships for both conventional taxi drivers (including six suicides) and ride-sharing drivers. Uber’s strategy to counter the new regulations was to persuade drivers from Lyft and taxi companies to drive for Uber. It was not yet clear how this move would play out.20 In the long run
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, Uber seemed to be following a strategy similar to Amazon’s initial strategy: Get as big as possible
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relationships. But the dynamics of industry platforms and ecosystems challenge those assumptions. Platforms connect customers to customers (Facebook), customers to advertisers (Google), drivers to passengers (Uber), and software developers to buyers (now via app stores, such as from Apple and Google). Moreover, platforms often disrupt existing business models that focus on
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as General Motors, also have feared that the market could tip to Uber. When Uber starts building its own self-driving cars, GM could be frozen out of the loop. GM’s response was to invest $500 million into Uber’s competitor Lyft to improve the prospects of a competitive industry. Within the taxi
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industry itself, firms across the world have been striving to fend off Uber’s advances. The single most successful strategy has been political: In numerous
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cities and even countries, taxi organizations have lobbied local governments to put Uber into a
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immediately removes drivers who fall below a 4.6 rating from the app. By contrast, Uber’s rival Lyft agreed in January 2016 to pay $12.3 million as part of a labor lawsuit settlement.38 Lyft also agreed to change the terms of its service agreement with drivers so that it could
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such workers as contractors. California lawyer Shannon Liss-Riordan became notorious for leading worker class-action suits against transaction platform companies, having spearheaded lawsuits against Uber, Lyft, and nine other firms that provided on-demand services. In an interview with Fortune magazine, she scoffed at the comments made by Handy’s CEO
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also likely to influence practices outside California. Shortly after the California Supreme Court ruling, San Francisco city attorney Dennis Herrera announced he was subpoenaing Lyft and Uber to see how they classified their drivers and to obtain data on pay and benefits. If those drivers should in fact be considered employees, the
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owe them minimum wages along with sick days, paid parental leave, and health benefits, according to Herrera. This would have drastic financial consequences for Uber and Lyft in California. These issues were also part of a national debate in the United States about workers in the gig economy more broadly. We cannot
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applications has been the emergence of self-driving cars. Ironically, this new technology may replace some of the most widely used platforms in the world: Uber, Lyft, Didi Chuxing, and other ride-sharing businesses. Despite the strong cross-side network effects, the ride-sharing platform revolution could actually disappear. The business challenge
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and paying drivers as well as keeping ride prices low has squeezed profit margins. In addition, many drivers multi-home (serve both Uber and Lyft, or conventional taxi companies). Therefore, Uber, Lyft, Didi Chuxing, and other ride-sharing companies have announced that their long-term strategy is to move away from being a pure
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the subject of government investigations, local regulatory oversight, and intense media scrutiny. No one has been spared. Microsoft, Alphabet-Google, Apple, Intel, Facebook, Cisco, Qualcomm, Uber, Airbnb, Alibaba, Tencent, and many other firms, small and large, have faced legal, taxation, or regulatory challenges. At the same time, the data suggests that
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, 2016. 3.Ellen Huet, “Sidecar Puts Passengers Aside, Pivots to a Mostly-Deliveries Company,” Forbes, August 5, 2015. 4.Douglas MacMillan, “Sidecar Succumbs to Uber and Lyft in Car-Hailing Wars,” Wall Street Journal, December 29, 2015. Also Sunil Paul, “Why We Sold to GM,” Medium (blog post), January 20, 2016, https
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-to-gm-83a29058af5a#.okepk6jjy (accessed October 30, 2018). 5.Carolyn Said, “Could Sidecar’s Patent Trip Up Uber, Lyft?” SFGate, May 16, 2015, http://www.sfgate.com/business/article/Could-Sidecar-s-patent-trip-up-Uber-Lyft-6267124.php#photo-7985861 (accessed October 30, 2018). 6.“Sidecar Connects Drivers and Passengers One Ride at
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, 2018). 8.Heather Somerville, “Sidecar Ends Donation Fares,” Silicon Beat, November 15, 2013. 9.Ryan Lawler, “Lyft Off: Zimride’s Long Road to Overnight Success,” TechCrunch, August 29, 2014. 10.Ryan Lawler, “Look Out, Lyft: Uber CEO Travis Kalanick Says It Will Do Ride Sharing, Too,” TechCrunch, September 12, 2012. 11.Luz Lazo
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, “Uber Turns 5, Reaches 1 Million Drivers and 300 Cities Worldwide. Now What?” Washington Post, June 4, 2015
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Moves” (Boston: Harvard Business School Publishing, Case #316-101, November 2015); and Andrew J. Hawkins, “Uber Covers 75 Percent of the US, but Getting to 100 Will Be Really Hard,” Verge, October 23, 2015. 12.“Lyft CEO: We Have Over 100,000 Drivers Across the Country,” Bloomberg Technology, March 6, 2015. 13
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with Cap as New York City Takes Lead in Crackdown,” New York Times, August 8, 2018. 21.Greg Bensinger and Maureen Farrell, “Uber Joins Lyft in Race to Tap Investors,” Wall Street Journal, December 7, 2018. 22.See Robert Burgelman, Robert Siegel, and Henry Lippincott, “PayPal in 2015: Reshaping the
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2018). 9.Christopher Mims, “How Self-Driving Cars Could End Uber,” Wall Street Journal, May 7, 2017. 10.Max Chafkin, “Uber’s First Self-Driving Fleet Arrives in Pittsburgh This Month,” Bloomberg, August 18, 2016. 11.See Lyft, “The Open Autonomous Era,” https://take.lyft.com/open-platform/ (accessed June 2018). 12.Mike Isaac
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, “Lyft Adds Ford to Its List of Self-Driving Car Partners,” New
After the Gig: How the Sharing Economy Got Hijacked and How to Win It Back
by Juliet Schor, William Attwood-Charles and Mehmet Cansoy · 15 Mar 2020 · 296pp · 83,254 words
, 2, 5). Among the for-profit cases, Robert took the lead on TaskRabbit and our consumer interviews. Isak did Airbnb and ride-hail driver interviews (Uber and Lyft). Juliet was a lead researcher for the for-profit cases (chaps. 1, 2, 3). Samantha did the Stocksy case (chap. 6). Mehmet did all
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also cure social disconnection, inequality, and environmental degradation. You will know by now that things haven’t turned out exactly as expected. The big platforms—Uber, Lyft, and Airbnb—have been exposed for paying poverty wages, destabilizing urban neighborhoods, and accelerating carbon emissions. Many argue that rather than ushering in an alternative
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that to the average consumer.” A decade in, tens of millions have earned on platforms. Hundreds of millions have stayed at Airbnbs, gotten into Ubers and Lyfts, and hired labor from apps.5 Many share Devon’s optimism. But there’s an opposing view, which focuses on the companies Devon minimized as
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cracks were appearing in the facade of the idealist discourse. The “revolution” in goods sharing turned out to be a bust.14 Studies of Uber and Lyft show that they cause congestion, increase air and carbon pollution, and pull people off public transportation.15 These findings put the lie to the sector
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, TaskRabbit, and Turo (then called RelayRides, a peer-to-peer car rental site). We moved on to delivery (Postmates and Favor) and ride-hail (Uber and Lyft). For all these cases we mainly spoke to earners, but we also interviewed a small number of consumers. We did big data analysis on Airbnb
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got charged $1,000 for a private driver on New Year’s Eve. Before long, he teamed up with fellow entrepreneur Travis Kalanick to found Uber.24 Lyft’s story started in Zimbabwe, where Logan Green saw passengers using shared minivan taxis, a common practice in many Global South countries, as well
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(with drivers who were making trips for their own purposes rather than to earn), jitney services, and apps that promised to treat drivers better than Uber and Lyft. Peer-to-peer rental schemes emerged for boats, airplanes, bicycles, and cars left at airports while their owners were traveling. In lodging, the offerings
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: “Instead of being an employee, you’re an independent contractor now. I understand it with certain companies, [but] not with these big companies, like Uber and Lyft. I don’t work for them, but I feel like they’re making so much money. Just like these restaurants that have these people working
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because of its long history of licensing and medallions.55 So far the evidence suggests that these predictions are exaggerated.56 Only the big three (Lyft, Uber, and Airbnb) have really scaled—with valuations in mid-2019 of $15 billion, $72 billion, and $31 billion, respectively.57 Delivery also has a few
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of platform founders, venture capitalists, nonprofits, consultants, lay enthusiasts, community critics, and a few researchers. Just about everyone was there, with the exception of Uber. Its competitor, Lyft, gave free rides to attendees. Airbnb sent cofounder Nate Blecharczyk and held a reception at its headquarters. Community sharing initiatives were well represented, from
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10.5 percent Latinx. Race varies a lot by platform, with 69 percent of Airbnb hosts being white, in contrast to 31 percent of Uber and Lyft drivers. Our average age is twenty-nine, although that’s partly an artifact of our sampling strategy—when we began participants were almost all young
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to get city licenses. The signup process has been a flashpoint for controversy because lax background checks have been linked to driver malfeasance and criminality. Uber and Lyft left Austin, Texas, after the city required fingerprinting, only to return after successfully lobbying at the statehouse for a law that effectively overruled Austin
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made him feel he’d be better off working at McDonald’s. Perhaps not surprisingly, an internal slide deck from Uber seen by the New York Times showed that other than Lyft, the company considered McDonald’s to be their primary competitor for labor.33 Isabelle, another dependent Task Rabbit also didn
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status can make all the difference. Ernest, the tasker we heard from above, was a thirty-year-old college graduate. He also drove for Uber and Lyft and managed some apartments on Airbnb while he was building a company in the music production business. He prefers platform work because it is less
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control. While total earnings aren’t high, effort is minimal, so income per hour is good. TaskRabbit has more autonomy and better hourly wages than Uber/Lyft or Postmates/Favor, with respondents reporting a floor of twenty dollars to twenty-five dollars an hour. There’s debate about hourly wages in ride
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pronounced on ride-hail apps. Driver Danny offered an astute, and poignant analysis: “It used to be much more profitable. When I first started Uber and Lyft, you could really make a killing, and it actually would cover depreciation and the miles and you could actually come out ahead. But now with
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, it’s the only task on Postmates and Favor. Driving is the most prevalent service overall in the platform sector, given the large size of Uber and Lyft. As TaskRabbit Josh explained about the work: “It’s manual labor in person.” In the conventional economy nearly all these occupations are dominated by
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are normalized, will the social connections of the early days melt away or even evolve into the snobbishness Kelly noticed? When Lyft started, passengers sat in the front. In 2019 Uber announced what is essentially a “Mute” button passengers can push—or what one headline termed a “shut up and drive” option
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at the University of Chicago took advantage of the fact that ride-hailing was rolled out gradually, and they tracked before-and-after patterns as Uber and Lyft entered 2,955 cities.30 To estimate the carbon and air pollution impacts of ride-hailing, relevant variables are the number of cars on
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additional miles are 2.6. City-specific estimates come to similar conclusions. A San Francisco study that looked at how things changed from 2010 (before Uber and Lyft) to 2016 found that VMT rose 13 percent, half of which is attributable to the platforms.32 By 2016, ride-hail vehicles accounted for
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15 percent of all trips within the city. Even Uber and Lyft now admit they are increasing congestion. A 2019 report they funded found that while they are still a small proportion of total VMT (1 to
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toward market domination by individual companies, on account of network effects, patient venture capital, and political power.7 (That patience is what has allowed Uber and Lyft to subsidize rides for so long and other tech companies to make losses for years.) In 2018, Amazon accounted for about half of all U
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and afford “maximum conveniences for seamless consumption.”9 Some have a more dystopian view of market dominance and see a future of predatory behavior. If Uber bests Lyft (or vice versa), will it raise fares? Once ride-hail apps have battered or eliminated the competition, including public transit, consumers may not have
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workers and urban residents? We didn’t cover this topic in most of our interviews, but occasionally it came up. Angelo was skeptical. Talking about Uber and Lyft, he believed “they [officials] waited too long to try to impose regulations and they [the companies] became too powerful. It came to the point
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poverty wages. That dynamic is the origin of taxi regulation and the basis on which driving became a viable occupation. By breaking the law, Uber and Lyft destroyed that viability, and we’re now seeing their drivers subjected to a similar race-to-the-bottom.27 And what the ideological high ground
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fill the gap in insurance coverage when a driver has the app on but isn’t on a fare, Uber hired fourteen of the fifteen biggest Sacramento lobbying firms.28 In 2017 Uber and Lyft had more lobbyists than Amazon, Microsoft, and Walmart combined.29 Airbnb has also been active trying to stop
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state legislatures to pass laws overriding local ordinances and regulation. In a mere four years (from 2014 through 2017), using language provided by ALEC, Uber and Lyft succeeded in getting forty-two states to pass laws with preemption provisions.34 This deregulation spree included taking away workers’ rights, outlawing employee status for
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fliers posted around town. This sample consisted of twenty people who had used Airbnb, TaskRabbit, or Turo. Dates of data collection: July 2014–March 2015. Uber/Lyft (Isak Ladegaard) We conducted seventeen semi-structured interviews of forty-five minutes to sixty minutes with each participant. Most interviewees were recruited through the ride
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originally did not accept the designation but was almost always identified as a leading sharing economy platform. But a situation in which Lyft is included and Uber is not is incoherent, given how similar the companies are. Our practice has been to include P2P platforms and organizations that are oriented to consumers
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). A second review is Vallas and Schor (2020). 5. Hundreds of millions: Airbnb statistics from https://ipropertymanagement.com/airbnb-statistics; Uber www.businessofapps.com/data/uber-statistics; Lyft www.businessofapps.com/data/lyft-statistics. 6. Stranger sharing is from Schor (2014). Benkler’s work a decade earlier on public carpooling sites emphasized that peers
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the still small size of the sector see chapter 2. 57. A possible IPO value of $120B for Uber was floated earlier in the year. Since the IPO, Uber’s valuation has fallen. Uber and Lyft valuations are from Collins and Hoxie (2017). Airbnb valuation is from Lunden and Dillet (2018). 58. The most
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. (2019). 70. Shapiro (2018). 71. https://payup.wtf/blog/2019/5/29/postmates-workers-are-fighting-back. 72. Uber analysis in Horan (2019b, pt. 18). 73. Lyft analysis in Horan (2019b, pt. 18). 74. Uber Technologies, Inc. (2019). 75. Dubal (2019b). 76. UCLA Institute for Research on Labor and Employment (2018). 77. Wells
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.” RAND Journal of Economics 46 (4): 891–917. Balding, Melissa, Teresa Whinery, Eleanor Leshner, and Eric Womeldorff. 2019. “Estimated Percent of Total Driving by Lyft and Uber: In Six Major US Regions.” Fehr and Peers. https://drive.google.com/file/d/1FIUskVkj9lsAnWJQ6kLhAhNoVLjfFdx3/view. Barbrook, Richard, and Andy Cameron. 1996. “The Californian Ideology
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_data/file/679987/171107_The_experiences_of_those_in_the_gig_economy.pdf. Brustein, Joshua. 2018. “New York Sets Nation’s First Minimum Wage for Uber, Lyft Drivers.” Bloomberg News, December 4, 2018. Burgen, Stephen. 2018. “Barcelona Continues Crackdown on Illegal Holiday Apartments.” The Guardian, July 27, 2018. Burston-Marsteller. 2016. “The
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Be Your Bus Service, Too.” New York Times, August 7, 2019. Conger, Kate, and Noam Scheiber. 2019a. “California Labor Bill, Near Passage, Is Blow to Uber and Lyft.” New York Times, September 9, 2019. ———. 2019b. “California’s Contractor Law Stirs Confusion Beyond the Gig Economy.” New York Times, September 11, 2019. Cook
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.” Naked Capitalism (blog). April 15, 2019. www.nakedcapitalism.com/2019/04/hubert-horan-can-uber-ever-deliver-part-nineteen-ubers-ipo-prospectus-overstates-its-2018-profit-improvement-by-5-billion.html. ———. 2019b. “Can Uber Ever Deliver? Part Eighteen: Lyft’s IPO Prospectus Tells Investors That It Has No Idea How Ridesharing Could Ever Be
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Profitable.” Naked Capitalism (blog). March 5, 2019. www.nakedcapitalism.com/2019/03/hubert-horan-can-uber-ever-deliver-part-eighteen-lyfts-ipo-prospectus-tells-investors-no-idea-ridesharing-ever-profitable.html. Horn, Keren, and Mark Merante. 2017. “Is Home Sharing Driving Up Rents? Evidence
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If You’re Drunk.” The Guardian, June 11, 2018. Malin, Brenton J., and Curry Chandler. 2017. “Free to Work Anxiously: Splintering Precarity among Drivers for Uber and Lyft.” Communication, Culture & Critique 10 (2): 382–400. Mallett, William J. 2018. “Trends in Public Transportation Ridership: Implications for Federal Policy.” R45144. Washington, DC: Congressional
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Barcelona. Barcelona: Universitat Oberta de Catalunya. Morozov, Evgeny. 2011. The Net Delusion: The Dark Side of Internet Freedom. New York: PublicAffairs. Newcomer, Eric. 2019. “Uber and Lyft Investors Are Looking for Signs of a Détente.” Bloomberg News, August 2, 2019. Njus, Elliot. 2018. “Oregon Airbnb Discrimination Suit Can Proceed, Judge Rules.” The
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Chronicle, January 14, 2018. ———. 2018b. “Airbnb Lists in San Francisco Plunge by Half.” San Francisco Chronicle, January 18, 2018. Schaller, Bruce. 2018. “The New Automobility: Uber, Lyft and the Future of American Cities.” Brooklyn, NY: Schaller Consulting. www.schallerconsult.com/rideservices/automobility.htm. Scheiber, Noam. 2017. “How
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. Schneider, Todd W. 2019. “Dashboard: Taxi and Ridehailing Usage in New York City.” Todd W. Schneider (blog). 2019. https://toddwschneider.com/dashboards/nyc-taxi-ridehailing-uber-lyft-data. Scholz, Trebor. 2014. “Platform Cooperativism vs. the Sharing Economy.” Trebor Scholz (blog). December 5, 2014. https://medium.com/@trebors/platform-cooperativism-vs-the-sharing
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Littlefield. Solomon, Brian. 2015. “The Hottest On-Demand Start-Ups of 2015.” Forbes, December 29, 2015. Solomon, Dan. 2017. “One Year After Fleeing Austin, Uber and Lyft Prepare a Fresh Invasion.” Wired, May 7, 2017. Sperling, Gene. 2015. “How Airbnb Combats Middle Class Income Stagnation.” Airbnb and Sperling Economic Strategies. www.stgeorgeutah
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.” Washington, DC: Kalmanowitz Initiative for Labor and the Working Poor, Georgetown University. https://lwp.georgetown.edu/wp-content/uploads/Uber-Workplace.pdf. White, Andy, and Dana Olsen. 2018. “Here’s Where Uber and Lyft Would Rank among the Decade’s Most Valuable VC-Backed IPOs.” Pitchbook: News and Analysis, October 16, 2018. https
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://pitchbook.com/news/articles/heres-where-uber-and-lyft-would-rank-among-the-decades-most-valuable-vc-backed-ipos. Whyte, William H. 1956. The Organization Man. New York: Simon and Schuster. Wilhelm, Alex. 2019
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of Production, 67 Ford, Henry, 67 for-profit cases: Airbnb, 181–82; demographic data, 186; Postmates/Favor, 183; Stocksy, 183–84; TaskRabbit, 181; Turo, 181; Uber/Lyft, 183 for-profit platforms. See platforms, for-profit Foster, Natalie, 37, 39 France, 153 Frank, Thomas, 23 Freecycle, 26, 146 free market, 23 free riders
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; recruitment, 177 residential segregation, 92–95 retreat from control, 43, 76–81 Rich, 59 Richardson, Lizzie, 193 ride-hailing, 26, 31, 34–37. See also Lyft; Uber; access to, 46; algorithmic management, 66, 68, 159; business model, 151; deactivation, 63, 92; dependent earners, 62–63; discrimination, 87; driver experience, 54–55; externalities
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