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Innovation needs to work for the many, not just the few

Londoners have developed a love-hate relationship with the taxi app Uber. In a matter of a few years it has become a familiar part of the transport landscape, providing cheap and convenient cab services 24/7. More than 40,000 drivers and 3.5 million users are glowing evidence of its popularity. Not surprisingly, then, a decision by Transport for London (TfL), the body that governs transport in the city, not to renew Uber’s license at the end of this month has prompted a vibrant debate between Uber’s huge fan base and its ardent critics. Within three days of TfL’s decision, 750,000 Londoners signed a petition, initiated by the company itself, demanding a rethink.
Uber is especially popular with young people who cannot afford the much more expensive alternatives. In a city that has only recently introduced an all-night Underground rail service, and this only at weekends, Uber has become a life (or more a party) saver for many. It is also much cherished by many businesses that open late. In a rather unexpected way it has quickly become not just a mode of a transport, but part of the city’s culture. Almost every user has some anecdote to tell about a driver or another passenger (though some are more amusing than others).
Here comes the end of the love affair. The darker aspects of Uber are those that most of its users prefer to suppress or ignore. It is an unpleasant truth for those who use it that the very people who drive them around London are badly exploited, many times ending the day earning below the minimum wage, and enjoying no social benefits. A company that started as a luxury service has ended up making enormous profits at the expense of many hard working drivers who have found themselves having to work longer and longer hours to make ends meet. Uber is not unique in pretending that those who work for it are self-employed and it therefore has no great responsibility toward them. This is known as the “gig” economy, one of the main features of which is a labor market characterized by the prevalence of short-term contracts or freelance work, as opposed to permanent jobs. This might suit a certain kind of employee, but for most it means being deprived of social benefits or any financial protection in case of sickness or other misfortune.
Uber, however, is only one example of our complex relations with new and advanced technologies, globalization, employment and consumerism in the 21st century. It is about lifestyle, especially in the big metropolizes, but there is much more to it than this. It is about faceless, multinational mega-companies who are present almost everywhere, yet we know very little about how they operate and what their motivations might be beyond making enormous profits. TfL have reached the conclusion that the way Uber operates in London is not sufficiently “fit and proper” to justify renewing its license. According to TfL it has demonstrated a lack of corporate responsibility that has potentially adverse effects on public safety and security.

The lesson of the spat in London over the taxi app Uber is that new technologies and services are welcome, but not at the expense of social values, safety and privacy.

Yossi Mekelberg

Uber has appealed against this decision and half-heartedly apologized for its mistakes, forced in the process to eat an extra-large slice of humble pie. One suspects it has done so more out of expediency than conviction, simply to help with its appeal. However, this affair provides us with an opportunity to assess the weakness, or lack of, legislation and regulations that enables these companies to develop such rotten practices. It is an opportunity for an introspective look at how in the name of consumerism we have become addicted to cheap commodities regardless of the socio-economic implications for others.
Uber is not alone in hiring employees on zero-hours contracts. It is an increasingly common and shabby practice among delivery and trade firms. It is a variation of what we got used to seeing in the manufacturing sweatshops of the developing world, but in this case introduced into the service and trade industry in the developed one.
In the drive to maximize profits, multinational corporations have quickly learnt that they have become too big for the state to let them fail. Thus they feel free to operate in the shadowy areas of the law, and sometimes above it. In some cases they operate as monopolies in contravention and utter disregard of the law. Many repeatedly violate employment laws or find loopholes to avoid paying tax. Microsoft was once ordered by a US court to split into two separate companies after a ruling that it acted as a monopoly — but it simply refused. Amazon, Facebook, Starbucks and Google were revealed to be paying ridiculously low levels of tax. This led the Austrian chancellor, Christian Kern, to claim: “Every Viennese cafe, every sausage stand, pays more tax in Austria than a multinational corporation.” This of course leaves a huge hole in government coffers.
Uber will probably stay on the streets of London, either through the courts or compromise with TfL. However, it is important that any deal reached with the company must reboot the relations between society and this type of organization. It should send a message that innovation and new technologies and services are welcome and encouraged; but not at the expense of norms of behavior and social values that enshrine labor rights, and the safety and privacy of customers.
• Yossi Mekelberg is professor of international relations at Regent’s University London, where he is head of the International Relations and Social Sciences Program. He is also an associate fellow of the MENA Program at Chatham House. He is a regular contributor to the international written and electronic media. Twitter: @YMekelberg