NYC Drivers Cooperative Aims To Smash Uber’s Exploitative Model

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Above photo: New York City drivers rally against Uber in 2015. Spencer Platt/Getty Images.

The city’s first worker-owned ridesharing app gets ready to take on the big boys.

Ken Lewis grew up on the island of Grena­da, and wit­nessed the pro­gres­sive after­math of its 1979 rev­o­lu­tion. I remem­ber the pow­er of coop­er­a­tives, peo­ple get­ting land, turn­ing places that were bar­ren into pro­duc­tive places,” he says. That image stayed with him after he moved to New York City for grad school and start­ed dri­ving a taxi on the side. Now, sev­er­al decades lat­er, Lewis is final­ly get­ting a chance to put the pow­er of coop­er­a­tives into prac­tice, in ser­vice of the dri­vers he worked with for so long.

He is one of three cofounders of The Dri­vers Coop­er­a­tive (TDC), which aims to real­ize a long-held dream of social­ly con­scious New York­ers in a hur­ry: a rideshar­ing app that you can feel good about. When it rolls out to the pub­lic ear­ly next year, TDC will become New York City’s first work­er-owned rideshar­ing plat­form — owned by the dri­vers them­selves, rather than by big investors and exec­u­tives. Its founders’ brazen idea is that TDC can actu­al­ly gain a com­pet­i­tive advan­tage over Uber and Lyft — sav­ing mon­ey and fun­nel­ing those sav­ings back to dri­vers — by doing away with the most exploita­tive prac­tices of that dom­i­nant duop­oly. The way the [Uber] mod­el is orga­nized is extrac­tive. It takes out the mon­ey and doesn’t give back much. Imag­ine a com­pa­ny that doesn’t have any prof­its, but has cre­at­ed bil­lion­aires,” Lewis says. That mon­ey comes from drivers.”

Erik For­man, a vet­er­an labor activist and orga­niz­er, became inti­mate­ly acquaint­ed with the dark side of that extrac­tive mod­el when he was work­ing as a staff mem­ber at the Inde­pen­dent Dri­vers Guild, a union-affil­i­at­ed group that orga­nizes rideshare dri­vers in New York. Com­pa­nies that oper­ate in the indus­try reg­u­lar­ly push much of the risk of employ­ment onto the dri­vers by clas­si­fy­ing them as inde­pen­dent con­trac­tors” rather than employ­ees. But they also push the costs of the job onto the work­ers, forc­ing them to pay for their own car and main­te­nance (not to men­tion things like health­care ben­e­fits). Instead of being paid to work, in oth­er words, rideshar­ing apps — like oth­er gig econ­o­my” com­pa­nies — make peo­ple pay in order to work. When Uber launched in New York City in 2011, it was an attrac­tive alter­na­tive for many who had pre­vi­ous­ly been taxi dri­vers, with decent pay and lit­tle reg­u­la­tion. But in sub­se­quent years, Uber cut pay rates while the num­ber of dri­vers rose, leav­ing many who had tak­en out loans to buy cars for their job strug­gling to meet their debt oblig­a­tions and earn a living.

For­man, who has been through bit­ter union bat­tles with big com­pa­nies, real­ized that for the same amount of effort, work­ers could prob­a­bly start their own ven­ture — lead­ing him to help cofound the rideshar­ing coop. The indus­try seems unique­ly in need of a sys­tem change based on work­er own­er­ship,” he says. “[TDC] is not anoth­er com­pa­ny try­ing to get mon­ey out of dri­vers. It’s the opposite.”

In fact, the lack of exploita­tion is also The Dri­vers Cooperative’s finan­cial advan­tage. For one thing, the bil­lions of dol­lars that Uber has spent on mar­ket­ing the con­cept of rideshar­ing mean that TDC has lit­tle need for big ad bud­gets. Their plan is to grow by build­ing a net­work of dri­vers, using press and word of mouth. And while Uber and Lyft take around a quar­ter of the mon­ey from each trip (some of it to pay for all that mar­ket­ing), the coop plans to take only 15%. By com­bin­ing the pur­chas­ing pow­er of all the mem­bers, they hope to low­er expens­es on costs like gas and insur­ance — expens­es that Uber and Lyft dri­vers must han­dle on their own. They project that this should all add up to 8 – 10% high­er earn­ings for dri­vers on every ride, even while being able to beat their com­peti­tors on fare prices. And if the coop has any prof­its left at the end of the year, they will be paid out to dri­vers as dividends.

Nobody under­stands the fun­da­men­tal con­trast with Uber’s busi­ness mod­el bet­ter than the third cofounder, Alis­sa Orlan­do — because she used to work for Uber. Her stint as the head of Uber’s oper­a­tions in East Africa left her dis­il­lu­sioned with the company’s preda­to­ry con­trol over its dri­vers, embod­ied in the way it uni­lat­er­al­ly cut earn­ings, deac­ti­vat­ed dri­vers alto­geth­er, or sad­dled them with unsus­tain­able car loans, all while claim­ing they were work­ing togeth­er. We called dri­vers part­ners to the extent that it helped us” main­tain favor­able reg­u­la­to­ry sta­tus, Orlan­do says, but they were nev­er partners.”

Now she is using her expe­ri­ence in ven­ture cap­i­tal and plat­form-based busi­ness­es on behalf of TDC, a scrap­pi­er job that allows her to sleep bet­ter at night. Meet­ing with New York City dri­vers to recruit them into the coop, she’s heard count­less sto­ries of the impos­si­ble choic­es that dri­vers are forced to make — like the woman who said that a half dozen pas­sen­gers get into her car with­out a mask every week, but if she objects, they give her a low rat­ing. She has to make this choice between ensur­ing that she’s safe, and the poten­tial threat of deac­ti­va­tion,” Orlan­do says.

Moham­mad Hossen, a rideshare dri­ver who serves on the coop’s advi­so­ry board, says that the pan­dem­ic has act­ed as an accel­er­ant for the urgency of the new project. His income from dri­ving has fall­en by two-thirds, to just $100 a day, and costs for dis­in­fec­tant and oth­er safe­ty mea­sures — paid out of his own pock­et — have gone up. The shared predica­ment has allowed him to suc­cess­ful­ly recruit oth­er dri­vers, while they wait for hours at the air­port to get a fare. At the end of the day, you have no life, no secu­ri­ty, no future,” Hossen says. We real­ize that, and we suffer.”

That could change when dri­vers are also the company’s own­ers. The Dri­vers Coop­er­a­tive is start­ing a pilot project this month giv­ing rides to work­ers for the Bronx-based Coop­er­a­tive Home Care Asso­ciates, an exam­ple of cross-coop coop­er­a­tion. Founders hope to even­tu­al­ly recruit sev­er­al thou­sand dri­vers in the city, and say recruit­ment is going well. They aim to roll out their own app and open for busi­ness in the first quar­ter of 2021. Their even­tu­al goal, they say, is 10% of the $5 bil­lion New York City rideshare mar­ket, and expan­sion into oth­er cities. For now, though, they will be sat­is­fied with mak­ing a good idea a reality.