Uber a 'labour exploiting' behemoth - critic

Steven Hill, whose book takes a critical look at Uber, sees bad things ahead for the ride-sharing giant. Photo / File

Steven Hill thinks Uber has shaken up the taxi industry - or Big Taxi, as he calls it - in a way that's been beneficial to many consumers.

And that's about the nicest thing Hill has to say about the San Francisco-based ride-sharing company.

Otherwise, Hill - who has worked at the think tank New America Foundation and written a book about the so-called sharing economy - sees Uber as a rule-breaking, tax-dodging, labour-exploiting, market-manipulating, law-unto-itself capitalist behemoth.

Uber began as a tech firm using smartphones to connect people who needed a ride with other people willing to use their own cars to take them there, for a price. Since its founding in 2009, Uber has become a verb and one of the most prominent companies to rely almost exclusively on an army of freelance workers instead of employees.

But to get as far as it's gotten, Hill argues in his book, Uber has evaded livery laws that previously governed taxi service in many markets; flooded the street with nonprofessional, unregulated and under-insured drivers; misled customers on the adequacy of background checks for its drivers and battled efforts for more rigorous screening of them, such as through fingerprinting; overstated the pay that drivers could earn working for Uber; and avoided paying some of the taxes and related fees that other taxi and limousine services must pay to local governments.

He doesn't mince words about its billionaire co-founder and chief executive, Travis Kalanick, either. In his book, he describes Kalanick as "the reigning bad boy of 'wild west' capitalism".

In emails and a recent interview, Hill discussed Kalanick's company the way people once talked about other high-flying companies that rose spectacularly and then crashed. Hill predicts that it's just a matter of time before Uber goes smash, too.

If anything, Uber's headline-grabbing announcement of driverless service in Pittsburgh is yet another over-hyped stunt to distract from bad news, such as the company's defeat in China.

Hill has documented his sceptical view of Uber in Raw Deal: How the "Uber Economy" and Runaway Capitalism are Screwing American Workers. For his book, Hill reviewed news accounts, conducted interviews, and examined court records. The chapter on Uber has 133 footnotes.

Hill believes ride-sharing may be here to stay, but Uber is not.

Here's a Q&A with Steven Hill:

Q: People talk about Uber the way its chief executive does - as a revolutionary company. But you say not so much. Why?

A: My view on it is that what Uber is going for, is that taxi service in the US, in most cities, is pretty horrible. In San Francisco ... where I live, it would take 35 minutes to get a taxi ... So, yeah, it's great: you hit the app, and the car shows up now in 10 minutes instead of a 35-minute wait. But now the traffic congestion is so bad that you're sitting in that car for 20 minutes longer to get anywhere.

And that's another thing that Uber doesn't want to face, but that cities now are starting to discuss and deal with: traffic congestion. The traffic congestion is so much worse. Now, is it all because of Uber? No it's not ... [but] ... you suddenly have a new service that's committed to just flooding the streets with cars, putting thousands of more cars on the street. Is it any surprise that now the streets are more congested?

Q: As you know, this month Uber launched a test project using self-driving cars for public use on the streets of Pittsburgh. The demo treated journalists to an uneventful spin through the Iron City. What did you make of the news from Pittsburgh?

A: The recent announcement about having a few self-driving cars on the public streets of Pittsburgh looks to me like an act of desperation - come on, what a joke: a few cars driving around Pittsburgh, and the human "non-drivers" still have to be sitting in the drivers seat? This is supposed to be a sign of progress? [They are] trying to create an alternative news meme to distract from the other bad news.

Here's how the self-driving system works in Pittsburgh. First, an Uber employee must remain behind the steering wheel at all times, just as alert as an actual driver, ready to intervene if the car's self-driving system makes a mistake. Indeed, operators are required to loosely grip the steering wheel and must be ready to intervene immediately at any time.

In short, the conditions for these cars are not even close to "real world". This is more like getting in Pirates of the Caribbean at Disney World, or the bumper car ride at an amusement park.

They have a few friendly journalists out there who will report the "good news" no matter what Uber says. When are journalists going to start viewing this company with a healthy dose of scepticism?

I tend to mistrust and disbelieve everything this company says, initially, and then wait to see if any substance actually emerges. Usually it does not ... trusting Uber's numbers or press releases is like trusting the tobacco companies to do their own studies.

Q: In China, Kalanick made market dominance a priority and touted his company's US$1 billion-a-year investment as "sustainable" until it wasn't. Didi Chuxing, Uber's arch-rival in China, bought out the San Francisco company in August. Why do you think China is a turning point for Uber?

A: That was a big shock because everyone thought Uber was this big, huge company, pretty much the 800-pound gorilla that can't be stopped and, suddenly: Wow - it looks like they're not doing as well as people thought they were because they had to pull out of China, which they had really bet the bank on.