Eighty years ago, Clifford Odets wrote a play about striking taxi drivers in New York City. With too many drivers on the road and bare-bottom wages, the cabbies debate whether to strike for better pay. Two years after Waiting for Lefty, Mayor Fiorello LaGuardia introduced a law that limited the number of officially licensed taxis to 16,900.
The point of the system? To curb the number of taxis, ensuring that the streets weren’t filled with overworked, possibly unqualified drivers desperate to find fares. The so-called “medallion” program, which made a fixed number of taxi licenses available, might have provided a safeguard for the wages of drivers, since it shielded them from the effect of ruinous, virtually unlimited competition.
However, critics have since argued that artificial scarcity has mostly enriched the holders of licenses. In 1965, conservative iconoclast William F. Buckley pegged his quixotic mayoral campaign in part on a pledge to open up the medallion system that limited the number of people who could legally drive cabs. Scarcity won the day, though: when I first moved to New York, I remember seeing the signs at LaGuardia that warned of vaguely shady folks saying they would give you a lift. Clearly, only legitimately certified people could be trusted to ferry you around NYC.
Uber has changed all this, by radically “disrupting” (Silicon Valley’s favorite verb) a stodgy and obstinate system that most people didn’t especially like. The city had to force taxi drivers to accept credit cards back in the 2000s, over howls of opposition. (I can’t count on my fingers and toes the number of times I didn’t have enough cash to score a cab back from Brooklyn to Manhattan back in the early 2000s.) Cabs were hard to find or flag down, some refused to take you where you wanted to go (especially if it was outside Manhattan), and the whole thing seemed all too expensive.
Here comes Uber. You press a few buttons on your phone, a car seems to magically appear two or three minutes later, and your drunk ass doesn’t need to worry about closing the deal or deciding a tip at the end, because it’s all already been settled by your smartphone and the Uber app.
If ever there was a case of true “disruption,” this is it. Uber has every taxi service in the universe in its sights, and given the company’s eye-popping Wall Street valuation (more than $50 billion) and its willingness to play true political hardball (see the miseducation of Bill De Blasio), we can expect that Uber has much bigger plans.
Indeed, Uber is part of a much bigger transformation of the American economy, and perhaps the world economy at large. Uber is not in the livery business. It already has driverless cars out on the streets in cities like Pittsburgh, and the company sees itself as a competitor with Amazon, seeking to be the intermediary that brings you everything. In the meantime, they will break the grip that taxi companies have on driving services in a variety of American cities, giving casualized workers the opportunity to make a little money on the side providing excellent service to drunk hipsters in Atlanta’s Little Five Points or New York’s Williamsburg or Los Angeles’s Silver Lake. One more dead job category left in the dust—like horse-and-buggy manufacturers, American autoworkers, and guys who play saxophone in rock songs.
But in the long run, Uber is the company that dreams of controlling all commerce, just like Amazon—which started out selling books but now makes sure that diapers get to your house in two hours or less in certain select cities. “They will do anything on-demand,” as Buzzfeed reporter Johana Bhuiyan recently told NPR. When Amazon floated the idea of using drones to deliver products to consumers, it was arguably a publicity stunt, an expert provocation, but it pointed the way to the future that both Uber and Amazon imagine. All those poor schmucks who are scurrying around Amazon distribution centers under excruciating circumstances, making sure your Gore Vidal novel and tampons end up in the right package? They too can be automated, eventually. (See Radiolab’s excellent episode “Brown Box” for the horrible conditions under which Amazon workers labor. The New York Times also recently stirred controversy about the brutal conditions for white-collar employees at the company. When Jeff Bezos opens a window, apparently, he closes a door on your sick child.)
Workers have long worried about automation, of course, with fears reaching back to displaced craftsmen (the original “Luddites”) in the early days of industrialization. Amid high unemployment in the Great Depression, Americans wondered if new technology might be to blame for making workers redundant, as historian Amy Sue Bix has made clear in her excellent work. Such anxieties emerged again after World War II, with the introduction of computers and other automation technologies in the 1950s and 1960s.
Ever since, fears have centered largely on the figure of the benighted manufacturing worker—i.e., people who “work with their hands,” whose supposed lack of skills renders them susceptible to replacement by machines. Occasionally, white-collar workers have sensed the chilling approach of redundancy—see this remarkable computer ad from the early 1970s, which promised to make chatty clerical workers a thing of the past—and such fears have appeared with renewed vigor in the work of Jaron Lanier and others. If MOOCs can replace educators and Legal Zoom can dispense with the hated lawyer, formerly comfortable professionals might also worry about the effect of technology on their professions. (For a counter view, see New York Times tech journalist John Markoff, who insists that the latest wave of automation fears are no more well founded than in the past. In Markoff’s view, in fact, the robots might be arriving “just in time.”)
Whether professors, lawyers, accountants and the like lose their jobs to “machines that think” remains to be seen. But in the meantime, drivers and delivery guys can be replaced by a driverless car or a drone. No UPS. No Postal Service. No guy showing up at your house in a comfy car to drive you wherever you want to go, for a few dollars less than a taxi service would charge. This is the future that Amazon and Uber imagine, in which labor has been cut out of the equation entirely, regulations have been thwarted, and a consumer can get whatever they want at the click of a button.
That last factor is the key—the convenience of a seamless interface. Why shouldn’t anyone get what they want, when they want it, for the best price in the smartphone era? The logic is irresistible. And paired with the anti-regulation, free-market yen of the do-it-yourself app economy—why should we let pesky rules and regulations get in our way?—you find yourself with an enterprising company like Uber with a clear and frightening vision of the future.
In other words, Uber is basically the union-buster of the tech economy—in the same way that Amazon was the slayer of bookstores and Napster and iTunes were the tag-team that killed Tower Records. As several commentators have noted, the profit margins in the taxi business have traditionally been pretty small, even in the best of circumstances. (Then again, one critic with experience in startups assured his readers in 2012 that taxis were a terrible bet for venture capital. Derp.) Uber may be able to work New Economy magic in a stagnant, old-fashioned business; it’s still basically a taxi company for the time being, though, and there’s not a lot of money there—otherwise, someone else would have figured out a way to make it more profitable by now.
If Wall Street and Silicon Valley are willing to lard Uber with $51 billion when they only drive people around, you have to assume there’s a bigger plan in the long run. Apart from speed and convenience, all Uber can really offer is cheaper labor—and the cheapest labor is none at all. Stay tuned while you wait for your car to come. A driver may or may not be in it.