Uber is in sell-off mode, getting rid of practically any nonessential assets as it tries to cut costs. Recently, the company handed off its self-driving car operation to Aurora, a former competitor. In a sign of how diminished the prospects are for autonomous vehicles, Aurora paid nothing for the privilege of owning Uber’s Advanced Technologies Group; instead, it was Uber who paid, investing $400 million in Aurora’s newly bulked-up operations. In another deal, for which terms weren’t released, Uber’s air taxi business went to Joby Aviation, a California startup in which Uber had previously invested $50 million. (Joby’s vertical-takeoff-and-landing electric vehicle is not expected to be operational for at least two years.)
Where once there were dreams of riding the sweat and tears of gig laborers toward a brighter, more efficient automated future of luxury transport, now there is only a pile of sundered partnerships and failed techno-utopian prophecies. The losses, especially for major Uber investors like Softbank, number in the billions. There were expensive lawsuits, fights over engineering talent, federal investigations, and the death of a pedestrian who was struck by an Uber test vehicle that wasn’t properly equipped, an investigation found.
After all this, the embarrassment—if venture capitalists and Silicon Valley entrepreneurs were capable of feeling such an emotion—should have been enough to provoke a career change or two. But this is the land of pivots, and Uber is in the midst of one, transforming itself from a well-capitalized, innovative logistics-and-transport juggernaut to a far leaner company squeezing every last efficiency out of an underpaid contract—and all too human—workforce. Dumping its moonshot bets is only the beginning.
The overall trajectory is clear, especially after Uber and some of its corporate allies spent a couple hundred million dollars to help pass Proposition 22 in California, which prevents rideshare drivers from being classified as employees, overriding a law known as AB5, which designated gig workers as employees entitled to certain rights and benefits. With its technophilic dreams as good as dead, Uber will do everything it can to streamline its businesses, committing to a future of human drivers who are given only what the law requires and nothing more. And as Uber has found, if you don’t like the law, it’s possible, with enough money and lawyers, to force through a change.
“Going forward, you’ll see us more loudly advocating for . . . laws like Prop 22,” Uber CEO Dara Khosrowshahi said in November, noting that the company, in what passes for progressive labor practice, was the first to settle on what it called a “contractor-plus model.”
With its technophilic dreams as good as dead, Uber will do everything it can to streamline its businesses.
Echoing Khosrowshahi, Anthony Foxx, a Lyft executive who was a secretary of transportation under President Barack Obama, told the Washington Post that he thought that Prop 22 “has now created a model that can be replicated and can be scaled.” (Uber and Lyft’s ability to hire former government officials like Foxx has been key to their effective manipulation of regulators.)
That scaling process is already underway. Within weeks of Prop 22 passing in California, Illinoisans for Independent Work, a recently established political action committee, began running ads promoting the “flexibility” of gig work and arguing for new worker classifications. The Chicago Reader reported that the PAC appears to have been started by Lyft.
Lyft and Uber, while publicly traded and ubiquitous in the culture, have never made a profit. Any path to profitability means focusing on establishing favorable regulatory and legal environments and getting more out of drivers and customers alike. Even with increased pandemic consumption, UberEats has raised customer fees (its competitor DoorDash, also a money-loser, has seen its stock slide since an optimistic early December IPO). And on Monday, Uber announced that it was adding a “California Drivers Benefits Fee,” ranging from 30 cents to $1.50 per customer, in order to cover costs incurred under Prop 22—all this despite the fact that avoiding increased prices was a major selling point of the new law. As Uber noted in a blog post, Prop 22 has spurred the company to offer a health care stipend. “We want to help cover your healthcare costs,” says the company that recently prevented its workers from getting employer-provisioned health care.
Uber’s attitude towards its workers as laborers, as bodies needing basic health care, says a lot about the company. They are rolling out “injury protection coverage” for some accidents but not health insurance, sick days, or any of the other standard but meager perks of our country’s decidedly anti-worker culture. Still, the company wants to keep its drivers behind the wheel as much as possible. Khosrowshahi has argued that the company’s drivers are essential workers deserving early access to the Covid-19 vaccine. The company even sent letters to all fifty governors requesting special consideration for its drivers. The hypocrisy is transparent: Uber denies its workers key health care benefits, spending millions to change the law in the company’s favor, and then requests government aid to keep its workers healthy and driving. (Offloading the cost of employee “benefits” onto the federal government, in the form of Medicaid, food stamps, and so on, has long been part of Uber’s toolkit, just as it is for minimum-wage empires like Walmart and McDonald’s). But the calculus—even as it’s cloaked in concern for worker health—is equally clear: the company needs a steady supply of healthy drivers, and sick drivers not only impede workflow but could tank the brand if Uber rides start being seen as infection zones.
Expect even more of these crude calculations about workers’ health and livelihoods to be laundered through the language of flexibility, independence, empowerment, and quasi-parental concern from CEOs like Uber’s Khosrowshahi. Don’t believe any of it. The truth is, like any cold-blooded capitalist concern, Uber doesn’t care a whit for its workers beyond their productivity and amenability to algorithmic governance. With its autonomous car dreams set aside, the company is more dependent than ever on its drivers, but also more sociopathic, unable to see its workers as anything but raw labor for a struggling enterprise. And as Uber continues to hemorrhage cash at a phenomenal rate, it is drivers who will have to pay the difference—or stick with the whole doomed venture until it collapses onto its rickety foundation.