Travis Kalanick, co-founder and CEO of the car-service company Uber, came up with the idea for his all-conquering start-up while suffering the intolerable torture of being forced to wait 30 minutes for a cab in Paris in 2008. His history adds a little spice to the most recent Uber news flash: Over the weekend, Parisian cabbies engaged in “guerrilla warfare” against Uber cars, slashing tires and breaking windows and generally terrorizing a few patrons of the service.
Shades of Ned Ludd! Parisian cabbies, desperate to resist the predations of a new technologically mediated transport paradigm, engaged in a little “machine-wrecking” of their own — just like the 18th century weavers who ran amok in an orgy of loom destruction in England, and forever ensured that when people get angry at the machine, they will be labeled and mocked as hopelessly behind-the-times Luddites.
Should we assume, then, that Parisian cabbies, like the skilled artisans of the early 19th century, are doomed to annihilation by the advancing forces of the sharing economy? Maybe. When you review some of the methods that the French taxi industry is employing to fend off new competitors, namely, the institution of the so-called 15-minute-rule, which requires that any smartphone-summoned chauffeur service must wait 15 minutes before responding to a hail, it’s easy to shake your head in dismay. If the primary credo of the 21st century is “the customer is always right” then attempting to legislate structures that make life more inconvenient for consumers is a sure fast-track to irrelevance. Uber, bankrolled by Google, and willing to fight to the legal and political limit across the globe, will have little problem rallying consumer support from the I-want-it-now smartphone generation.
But there’s a flip side to “the consumer is always right.” And that’s “the worker always gets screwed.” Anyone who feels like contemplating the neo-Luddism of entrenched monopolies threatened by “disruptive” sharing economy apps would do well to consider Marxist historian Eric Hobsbawm’s revisionist history on Luddism, “The Machine Wreckers.”
Hobsbawm defines the Luddite attacks on machinery as “collective bargaining by riot” — one of the few meaningful ways the working class in the early 19th century had available to them to put pressure on employers before the formation of trade unions. Far from hating on the machines, the Luddites were in fact hating on the negative impact of the machines on their living standards with the only lever they had available to them. “In some cases, indeed,” writes Hobsbawm, “the resistance to the machine was quite consciously resistance to the machine in the hands of the capitalist.”
It is, I think, fair to claim that ‘collective bargaining by riot was at least as effective as any other means of bringing trade union pressure, and probably more effective than any other means available before the era of national trade unions to such groups as weavers, seamen and coalminers. That is not to claim much. Men who did not enjoy the natural protection of small numbers and scarce apprenticed skills, which might be safeguarded by restricted entry to the market and strong hiring monopolies, were in any case bound normally to be on the defensive. Their success therefore should be measured by their ability to keep conditions stable – for example, stable wage-rates – against the perpetual and well-advertised desire of masters to reduce them to starvation level. This required an unremitting and effective fight.
Indeed, Hobsbawm argues that in numerous cases, miners and weavers won labor concessions as a result of their wrecking. Hobsbawm also argues that the Luddites enjoyed widespread popular support.
The fully developed capitalist entrepreneurs formed a small minority, even among those whose position was technically that of profit-makers. The small shopkeeper or local master did not want an economy of limitless expansion, accumulation and technical revolution, the savage jungle pursuit which doomed the weak to bankruptcy and wage-earning status. His ideal was the secular dream of all ‘little men’, which has found periodic expression in Leveller, Jeffersonian or Jacobin radicalism, a small-scale society of modest property-owners and comfortably-off wage-earners, without great distinctions of wealth or power; though doubtless, in its quiet way, getting wealthier and more comfortable all the time. It was an unrealizable ideal, never more so than in the most rapidly evolving of societies.
Now let’s translate this to the current struggle. Existing taxi monopolies correctly see Uber and Lyft and all the other ride-sharing and car-hiring services as competition that will erode company profits and driver earnings. But impatient consumers — would-be riders waiting for a cab to roll by in San Francisco or Las Vegas or Paris — are also correct to see that the status quo doesn’t serve their interests. And when consumer demand is catered to by the owners of capital (in this case, Google) — the neo-Luddites don’t stand a chance.
But the question that we should be asking is what happens to the worker when the taxi monopolies are finally crushed. Competition lowers prices, which surely will lower per-capita driver earnings. Existing taxi drivers are worried that they can’t compete against part-timers. What happens when everyone is a part-timer? Is a larger pool of drivers engaged in competition so fierce that no one can make a living wage a better solution than a smaller pool of drivers who can pay the rent?
If the general population is sharing equitably in the overall economic growth and productivity spurred by technological innovation, then we probably don’t need to obsess too much about the negative impact of disruption in any one particular sector of the economy. Economic historians generally dismiss the Luddite movement by noting that the Industrial Revolution, while initially causing economic harm to skilled artisans, ended up lifting vast sectors of the world’s population out of abject poverty. The net result: more jobs and the rise of the middle class.
But there is growing concern that the current phase of technological progress is a different animal. The profits from new technological innovation are clearly not being distributed equally. This time around, it’s not clear at all that the base is broadening. Globalization and the digital revolution have us competing against each other and machines. It’s getting harder to make a living, not easier.
Slashing the tires of an Uber car and terrifying its passengers is not going to stop Uber. In fact, it will probably achieve the opposite, and rally popular support against destructive behavior. But if workers continue to see their living standards constricted from technological competition it’s also not out of the question that we’ll end up seeing more “collective-bargaining-by-riot” in the future. And that’s not necessarily a prospect that anyone waiting for a cab should look forward to.