Uber: to ban or not to ban?

Uber – where do we go from here?

How can we muddle through TFL’s decision to suspend Uber’s licence? On the one hand, Uber has been disruptive to tens of thousands of taxi drivers in London at astonishing pace. Simultaneously, it may have failed to follow security procedures – the least we should expect of any transportation service. Perhaps also challenging is the company itself; amidst allegations of poor workplace culture and sexual harassment, former Chief Executive Travis Kalanick was forced to resign.

There are two issues here – Uber the company, and Uber the model. We cannot possibly let either fail.

Uber the company has had its problems, even if it rejects TFL’s conclusions. While Executive Fred Jones has made clear, “we follow the rules,” there have been security issues Uber must urgently deal with. But we should encourage them to address these problems – not write the company off altogether. It was pleasing to see (new) Chief Executive Dara Khosrowshahi demonstrating a fresh humility by apologizing for past mistakes. Lets also not forget that Uber employs more than 40,000 drivers in London, 90 per cent of them from ethnic minority backgrounds. Iqbal Wahhab, former chairman of the Department of Work and Pensions Ethnic Minority Advisory Group, said: “There is a huge disparity in socioeconomic conditions of BME citizens and their white British counterparts. And for many of them, Uber was a way to earn a living, however modest, and come off benefits.” The distillation of an issue into a crass ‘us versus them’ mentality is never helpful when so many livelihoods are at stake.

As for Uber the model, it has been a transformative, positive innovation. First, for public safety. With a named driver, a rating system and the ability to watch for its (usually very rapid) arrival, many of us feel far more secure at our most vulnerable times. Clearly we should expect the highest standards of security from the provider itself; but there is no denying that the model is superior to waiting on the street to step into an anonymous car. Second, its cheaper. Much cheaper. Researchers have found black cabs in London to be 35% more expensive. Lowering the cost of private transport enables more of us to opt for a safer route home at night. Or, for the more isolated among us – for whom many forms of public transport are difficult – to go out at all. Third, why should any government intervene to bolster what appears to be an outdated taxicab model? Consumers seem to have made their choice. Technology will continue to disrupt, often at a quicker pace than we might always feel comfortable with – but the solution is to better support those who lose out, not reject such change altogether.

Uber, TFL, and all other stakeholders owe it to Londoners to rapidly resolve this issue. 40,000 Uber drivers should not live in uncertainty, and the rest of us should have confidence in how we’ll get home at night.

The contributor is a Labour Party member and a member of the Future Labour Steering Committee.

Bibliography

Uber: Below Minimum Average Rating

The decision of Transport for London to suspend Uber’s licence once again raises the issue of whether there are some businesses – and business models – that are fundamentally anti-social and unethical.

Uber is seen as part of the ‘sharing economy’, a concept whose origins were based on fundamentally progressive principles in terms of the peer-to-peer based sharing of access to goods and services. Mutualised access to information and resources is clearly an idea that would be attractive to anyone on the left, and if technology can act as a catalyst for it then so much the better.

Uber smashes through this rose-tinted view of the sharing economy. In October 2016 the Employment Tribunal handed down a landmark ruling in which it found that Uber drivers were workers. In describing them as contractors, Uber drivers would not be entitled to various statutory protections. Uber attempted to argue that they were entitled to treat the drivers as self-employed contractors.

Such was the audacity of Uber’s behaviour that the Tribunal judges not only rejected this argument but were also incredulous in the face Uber’s efforts to conceal its true relationship with drivers. A direct quote from the Tribunal decision demonstrates this level of disbelief and reveals the lengths to which Uber went to get round the law:

“…We have been struck by the remarkable lengths to which Uber has gone in order to compel agreement with its…description of itself and with its analysis of the legal relationships between the two companies [UBV and ULL], the drivers and the passengers. Any organisation…(c) requiring drivers and passengers to agree, as a matter of contract, that it does not provide transportation services (through UBV or ULL), and (d) resorting in its documentation to fictions, twisted language and even brand new terminology, merits, we think, a degree of scepticism. Reflecting on the Respondents’ general case…we cannot help being reminded of Queen Gertrude’s most celebrated line: ‘the lady doth protest too much, methinks.’” (2202550/1/2015 at para 87)

Controversy appears to follow Uber wherever in the world it operates and recruits drivers. In the United States, the Department of Justice has begun a criminal investigation into Uber over alleged bribery and violation of the Foreign Corrupt Practices Act which makes it illegal for individuals and organisations to pay foreign government officials to obtain or retain business. It was partly because of concerns around the use of controversial ‘greyballing’ software – where Uber shows a different version of the app to certain users – that Transport for London refused to renew Uber’s licence to operate in the capital. In Israel, the country’s transportation ministry said it found Uber recruited private drivers without the necessary licenses. In France, Uber received an 800,000 Euro fine for operating in defiance of an official ban. To follow the Employment Tribunal in quoting Shakespeare, as Marcellus said, “Something is rotten in the state of Denmark”. (Incidentally, the Danish High Court also ruled in November last year that Uber is an illegal taxi service and not a true ride-sharing programme).

It is correct that a progressive and forward-thinking Labour Party should not reduce consumer choice by supporting restrictive practices in the private car hire industry in the same way we might oppose other forms of macro-economic protectionism. Also, why would we want to oppose Uber when, at the time of writing, over 855,000 people have signed a petition to reinstate Uber’s licence in London? How could we ride roughshod over the livelihoods of individual drivers who are just trying to make a living? As argued above, there are strong reasons for Labour to support the ethic behind the sharing economy.

Support for innovative new technology, as well as the sharing economy, and strident support for workers’ rights and consumer protections are not mutually exclusive. Labour must take the lead in arguing that new technology should not act as a catalyst for exploitative relationships. This issue feeds into a wider debate around the responsibilities of employers towards the wellbeing of their workforce. In an essay for the Fabian Society, Frank Field MP and Andrew Forsey argued that a future Labour government should take advantage of recent cases where companies like Uber have wrongly classified workers as being ‘self-employed’. They argue for a stronger layer of protection as well as the extension of the National Living Wage to workers in this category. We could go further, closing other loopholes in employment law that allow exploitation of people who are effectively workers.

Any regulation or legislation in the realm of the digital economy relies on the willingness of employers in this industry to accept a consensus on workers’ rights and employment contracts. Uber is a company which seems institutionally incapable of accepting any checks on its behaviour, as evidenced in its well-documented habit for using all manner of tactics to evade regulation. The anarchic ‘hacker culture’ has always been pervasive in digital technology, with developers looking to circumvent rules, break down barriers and challenge received wisdom. It is a fact of history that pioneers of new technology have done this – long may it continue – but as in previous revolutions such a spirit should not be without a sense of social responsibility. The state must be prepared to step in and enforce regulation where industry will not follow the rules.

To use Uber’s own language, the operator has fallen far below the ‘Minimum Average Rating’ and we should support the attempts of London’s Labour mayor to ‘deactivate’ its access to our capital city unless it can seriously raise its game.

Kevin Hind is Editor of the Future Labour blog and a member of the Future Labour Steering Committee.

Bibliography

Digital Economy and Technology Events at Labour Party Conference 2017

Sunday 24th September

8:00pm
The Grand Hotel, GB2
The Barnardo’s Reception – Childhoods In A Digital World

Monday 25th September

12:30pm
Holiday Inn 137, Kings Road, Lancing 1
Is Artificial Intelligence Sexist?
Future Labour Board Member Chi Onwurah MP has been invited to this event.

12:30pm
Hilton Brighton Metropole, Hall 7, Clyde
Time To Disrupt?  An Industrial Strategy For The Digital Economy

2:15pm
British Airways i360, New Statesman Hub, Birch
A New Future!  How Artificial Intelligence And The Fourth Industrial Revolution Can Transform Britain’s Regions

5:00pm
Brighton Centre, Fujitsu Business Lounge
What Does Digital Mean For Our Industrial Strategy?
Future Labour Board Member Chi Onwurah MP has been invited to this event.

Tuesday 26th September

12:30pm
Hilton Brighton Metropole, Hall 7, Clyde
Scaling-Up Britain: Why Doesn’t The UK Have Its Own Apple Or Google?
Future Labour Board Member Chi Onwurah MP has been invited to this event.

12:30pm
Hilton Brighton Metropole, Surrey Suites 1
The Future Of The UK Data Economy After Brexit
Chair of the All-Party Parliamentary Group on Data Analytics Daniel Zeichner MP will be speaking at this event

12:45pm
Hilton Brighton Metropole – Ambassador
Digital Safety – Helping Your Constituents Get Fraud Smart

1:00pm
British Airways i360, New Statesman Hub, Birch
Securing The Future: Cyber Security For A New Age
Future Labour Board Member Chi Onwurah MP has been invited to this event.

1:15pm
Mercure Brighton Seafront Hotel, Ballroom
New Jobs, New Technologies, Same Old Solutions?  Labour, The Trade Unions And The Changing Labour Market

5:30pm
Hilton Brighton Metropole, Osborne
Tech Literacy: Setting The Next Generation Up For Success In A Digital World

5:45pm
Hilton Brighton Metropole, Durham Hall – Argyle
How Digital Technology Can Revolutionise Social Care

Can tech tackle the poverty premium?

Wayra, the Telefónica-backed accelerator, announced last month the launch of its Fair By Design fund. With an aim of raising £20 million, it will support seven startups each year to develop ways to tackle the poverty premium. Chiefly, these will be solutions to prevent low-income households paying more for services like energy, insurance, borrowing, transport and food.

The poverty premium is not a new concept. However, the sheer resilience of the challenge in the face of a number of well-intentioned public policies makes it all the more urgent. A 2016 report by the University of Bristol revealed that the poverty premium paid by low-income families is, on average, £490 per year. According to Joseph Rowntree Foundation research, one-fifth of the UK’s population is living in poverty.

So – can tech be used to solve intractable social problems like this? Clearly, the challenge requires political attention and regulation as much as any other component. However, there can be no doubt: in the 2020s, technology and innovation will have to form part of the solution.

There are three reasons. First, many of these problems are exacerbated by technology itself. While greater connectivity has enabled money-saving innovations like price-comparison websites, it has also bolstered the reach and ease of payday lenders.

Second is the creativity such a fund allows. Unlike the rigorous political magnifying glass of Westminster – where politicians quite rightly want to know policies will work at scale – Fair By Design creates a fertile space for experimentation which others can build on.

Third, initiatives like this actually create solutions that can be deployed instantly. This is a sustainable way to act against social problems, no matter which party is in government or which policy is being pursued.

Not-for-profit and public sector focused accelerators are a welcome innovation. We should do all we can to support them.

How far should we turn to tech in times of disaster?

The contributor is a Labour Party member

Bibliography

  • ‘The Poverty Premium,’ University of Bristol, 2016
  • ‘Monitoring poverty and social exclusion 2016,’ Adam Tinson, Carla Ayrton, Karen Barker, Theo Barry Born, Hannah Aldridge, Peter Kenway, Joseph Rowntree Foundation, 7th December 2016

Community, Relationships and the Digital Future

The digitalisation of industry will doubtlessly bring many benefits to the UK economy. A study focusing on broadband penetration conducted by Booz & Company in 2012 showed that a 10% increase in digitalisation led to a 0.6% increase in GDP. The amount of jobs in sectors such as business services is expected to increase, together with a streamlining of procedures, making the economy more efficient and increasing GDP. These are of course benefits that a forward thinking Labour Party must embrace in the interests of the British economy.

Continue reading “Community, Relationships and the Digital Future”