The Social Experiment

Independent contractor or Uber's prisoner?

Is Uber some grand social experiment?

This thought was brought up by a fellow driver and it got me to thinking that in many ways Uber seems to be conducting an experiment and the cost is the lives and livelihood of many people who work in the gig economy. Not just for Uber but many other similar jobs where the ability of the individual to pay bills is highly dependent upon a pricing structure that is forced upon them.

Why Uber? Because of their hubris. The hubris of Travis Kalanick who seems to have no empathy or compassion for the very people who are making his company the household name it is becoming.  Why Ashton Kutcher? He's known to love a good prank whatever the cost.  Both of these individuals have discarded the most basic requests of the drivers for some lofty idea that they can't even begin to relate to because they make so much money on their own.

How is it possible that Travis is so seemingly "in the dark" about how his actions and statements affect others? How is it that Ashton Kutcher is so quick to buy in to Travis' warped sense of reality when it comes to the people who make his company work?  The simple, psychological answer can be found in cognitive dissonance.   It's true because both Travis and Ashton are interpreting factual information in their own way to fit their view of the world, conveniently forgetting what it was like to have nothing.  Tossing aside the factual data they surely have showing exactly how little per hour each driver makes after all the expenses.

Further, there is cognitive dissonance in their ethical behavior.  The comment that people who don't get tips make more money is not based on anything said by anyone in a service industry (wait staff, bellhops etc).  And the comment that Uber drivers would focus efforts solely in wealthy neighborhoods to pursue greater tips is anything but factual - in fact we get more tips from people who make less, they appreciate what it's like to work for so little.  Their justification for not putting a tipping function in the app, depriving their "independent" drivers of making the money they need to survive is just wrong.  Travis and Ashton have just adjusted their values to fit their behavior so in their eyes everything they say is the truth.



At the foundation we, Uber drivers, could be just pawns in a game to find out how people respond in a situation that increasingly becomes more dire as time passes.  When I first started driving for Uber the pay wasn't bad, it was decent and I could make the money I needed to fill the gap within a few hours each day.  But then I was presented with an unexpected cut disguised as a sale with a promise that rates would return to normal.  That was months ago and rates have not returned to the previous rate and I spend more time to make the same money.   While I like the flexibility that driving affords I am a firm believer that there should be a minimum threshold (similar to minimum wage laws) or I should be able to set my own rates and let the market (passengers) decide if I am worth that rate.

Perhaps we drivers are all participating in a social experiment devised by Ashton Kutcher, endorsed by Travis Kalanick. The experiment starts by recruiting a bunch of people who, for whatever reason, have a need for additional income and have their own, very nice, vehicles. For motivation we're being told we can make money.  And the experiment hypothesis: How many people will drive for money at X dollars, how many at Y dollars.  What is the minimum amount we can pay people to continue to drive?  Travis is starting to get his answer in the myriad of lawsuits.

So this brings about two questions.

First, why would large companies and wealthy individuals continue to invest in Uber, a company that clearly has issues (as evidenced by the legal troubles). Uber itself has lured billions of dollars into their company seemingly without any guarantee of pay off.  It's unlikely that an IPO will be coming any time soon with all the legal issues facing Kalanick and his crew.  Perhaps there is hubris in play here as well.  How cool is it to be on board with the new guy on the block? The disrupter himself?

But really, Uber is a dying entity.  Sure it's hailed as the largest supplier of rideshare services across the globe but Uber continues to lose money every single day, a leaked report found that Uber lost over 1 billion in the first quarter of 2015. And in the race to the bottom on prices they will continue to do so.  Uber's chicken fight with Austin ended in Uber pulling out and losing that market altogether,  Other cities (Montreal) and provinces are also in question.  Where is the turn around? I guess if you are a big enough company, or country (Saudi Arabia) then you can stand to lose a few billion dollars.  But I have never known a business person to just let their money go without getting something bigger in return. And so far, I don't see it with Uber.

Second, why would people continue to drive for Uber despite the lower pay. There are many reasons people choose to drive for Uber.  The allure of being one's own boss and setting our own hours are appealing to many.  But it's deeper than that.  There is the fundamental need to pay our bills.  As the gap between the wealth classes widens, it becomes more obvious that the 9 to 5 job of our elders just isn't enough anymore.  And it has nothing to do with overspending our budgets, it has to do with buying groceries without depending on public assistance.  Paying for drugs that Obamacare still doesn't cover entirely. It has to do with living.

So why not quit and find something else?  We Uber drivers have often been told we can always go do something else for money.  Is it really that simple?  With rideshare we've found a means of making money that fits around picking up a child from school and helping with homework, being with an older parent when no one else can.  In short dealing with the other responsibilities of being a human on this planet.  If we give up driving for Uber to get another job we risk working for an unsympathetic boss under conditions that won't allow us to fulfill our obligations.  The trade off is just not that easy to make.

The social experiment could very well be based on the classic work by Morgan Deutsch and Robert Krauss with bad bargaining.  In the Kalanick / Kutcher example we have people who need to make extra money.  Uber offers the chance to do so by paying to take people to their desired destinations.  But, as you start to fulfill the offer there are roadblocks.  The pay is reduced without warning, do you continue or do you stop? Failing to accept a minimum number of rides could cause deactivation.  Riders must give you high marks better than half the time.  Threats make the situation worse. And when you try to communicate with the company you're shut down or shut out.

In the Deutsch and Krauss experiment the only time anyone was consistently successful was when there was good communication, even if forced, between the parties.  An idea that Kalanick is even remiss to approach.

Thus the downfall of Uber is at hand.

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