Uber is a nightmare: They're selling a big lie -- and the New York Times keeps buying it

A new Uber launch has serious labor, environmental and consumer downsides. You'd never know from reading the Times

Published April 9, 2016 6:00PM (EDT)

 (<a href='http://www.shutterstock.com/gallery-2312138p1.html'>MikeDotta</a> via <a href='http://www.shutterstock.com/'>Shutterstock</a>/Reuters/Carlo Allegri/Photo montage by Salon)
(MikeDotta via Shutterstock/Reuters/Carlo Allegri/Photo montage by Salon)

Uber has been slowly rolling out its latest “trust me, I’m saving the world” product, this one a service that allows its Uber-taxis to pick up multiple passengers in serial fashion. Much like a commercial airport shuttle, strangers share part of the same ride and pay a reduced fare for just their part of the ride. It’s called UberPool, as in carpool, and CEO Travis Kalanick touted its alleged environmental and labor positives in a recent interview with the New York Times, saying that “reducing traffic was part of Uber’s mission.” If true, this is a welcome change from the CEO whose previously stated mission was to flood the streets with Uber cars to win his war for market share with Big Taxi and ridesharing competitor Lyft.

Before going into the considerable labor, environmental, consumer and public transit downsides to this latest blitz of Uber hype, I can’t help but say that it has been puzzling to see the New York Times consistently offer up its pages to Uber as a genteel and uncritical forum for promoting its private interest. Much of the latest article from its tech columnist Farhad Manjoo reads like a press release from Uber, without a single comment from a critic or transportation expert on the impact of UberPool. To be fair, Manjoo has written some excellent articles about technology – his series on the impact of robots and automation for Slate a few years ago was first-rate – but that’s what makes his “Uber blind spot” all the more baffling.

No question, taxi service in most U.S. cities has been sub-par for many years, and if Uber and Lyft have demonstrated nothing else, it’s that there were not enough taxis on the road to service all the customers (in Berlin, where I am currently living for a few months, taxi service has always been pretty good and Uber has had a hard time gaining traction). Properly regulated, there could be room for app-driven ridesharing in the overall transportation matrix. Despite its considerable downsides, Uber has become popular in the U.S. because it’s filling that “taxi gap,” and that makes it harder for many well-meaning people to figure out what to make of a service like UberPool. So let’s break it down, sector by sector:

Labor issues. Uber drivers are complaining that with UberPool they are working a lot harder for no more, and possibly even less, income. A website called TheRideshareGuy, which is run by Uber driver Harry Campbell and is chock-full of insightful advice and discussion for fellow drivers, provides a helpful example of what’s wrong with this picture.

Imagine two Uber drivers each carrying a single passenger along the same route which results in a fare of $11. After Uber takes its brokerage cut as well as its “safety fee” (even though the company still has the poorest driver background checks in the taxi industry), each driver ends up with $8 each in her or his (usually his) pocket, while Uber ends up with $6, a 27% commission for Uber.

Now along comes UberPool, and these same two serial riders get picked up by a single driver. Since UberPool offers passengers a substantial discount for sharing a ride, that means each passenger now pays $6 (in this example). After Uber takes its commission, including the safety fee, the payout to the driver is $4 for each passenger, or a total of $8. So the driver makes the same amount, but Uber’s take of the overall $12 for this ride is also $4 – a 33% overall commission. So Uber makes a higher percent on UberPool rides, yet the driver makes about the same amount.

But it turns out driving passenger after passenger, picking up and dropping off in a serial fashion, is a grind. Christian Perea, a longtime Uber and Lyft driver says, “Drivers end up doing a lot more work for the money.” Experienced drivers, he says, know that pickups and drop-offs are the most stressful part of each ride, and adding in a second or third rider only compounds the difficulty. “As people get added into your ride or cancel along the way, it becomes frustrating having to change direction every few minutes while constantly checking your phone while in traffic,” he says. “It’s honestly kind of a safety hazard.”

Uber’s response is that drivers will benefit because they will have less downtime waiting for the next fare. By picking up passenger after passenger, the driver won’t have any idle time and the meter (so to speak) will keep rolling, resulting in steadier earnings. But another Uber driver, Frank, disputes that.

“We are using more gas hauling more weight. More weight is a harder wear and tear on the vehicles and it increases the insurance risk if there is an accident... more distractions [from] more Pool pings in the middle of driving, now changing directions or U-turns making it more dangerous overall for everyone... the little money return is not a justifiable risk.”

Driver-support websites like UberPeople.net and various Facebook groups have lit up with complaints from drivers that UberPool is not worth the extra hassle and stress. It feels like a classic case of assembly-line “speed up,” in which you are working harder but not getting any further ahead.

Consequently, some drivers have begun declining the second or third passenger ping. If they truly are “independent contractors,” and not Uber employees (soon to be settled by a federal lawsuit which begins in June), shouldn’t they have the right to refuse? In theory, yes, drivers can refuse. But in practice, Uber has fired drivers whose “acceptance rate” of rides falls below acceptable levels.

Consumer confusion. Passengers, of course, love having their fare cut in half, but they don’t necessarily like having other passengers in “their” car. So they are deploying tactics like pinging for an UberPool and jumping into the car with another two or three buddies, so there’s no room for other paying passengers. What a deal – their own private car pool at discounted rates! And the driver doesn’t earn any extra money since this situation would be counted as a single ride.

Other passengers, after pinging UberPool, have pressured drivers not to pick up too many additional passengers. Perea says “Some Uber drivers have complained that passengers have rated them poorly for actually accepting too many Pool requests.” The situation becomes especially severe when the first passenger picked up ends up being dropped off third or fourth, because the UberPool requests can keep flooding in all along the route, as long as there's room in the car. Drivers live in fear of the rating system because if their rating falls too low, the Uber algorithm automatically cuts them off the platform — it’s a firing squad by computer, employment-wise.

A Los Angeles Uber driver says, “Pool riders invariably want no interaction whatsoever with the other passengers and are expressly disappointed when there is another rider already in the car or will be picked up next. This fact kills me, because it was them that requested the Pool ride.”

Yet if the driver refuses a second or third passenger to keep the first customer happy, then their acceptance rate falls too low and they get in trouble with Uber. It’s a classic Catch-22, caught between the Scylla and Charybdis of the rating system and acceptance rates. “Negative ratings are inevitable,” says the L.A. driver.  “UberPool is a lose-lose proposition for drivers and riders.”

Environmental issues.  There is no question that Uber and Lyft are adding to traffic congestion, despite these companies implausible claims to the contrary. Ed Reiskin, director of transportation for San Francisco’s Municipal Transportation Agency, says, “[Uber and Lyft] have put a lot more vehicles on the streets,” an estimated 15,000 autos in San Francisco alone. Not all of those vehicles are on the street at any one time, but thousands typically are, many of which double-park in bike lanes and bus stops when dropping off passengers, further snarling traffic flow. “They’re all contributing to the increased traffic,” Reiskin says.

In London, a study by the Department for Transport found that the rise of taxi apps such as Uber has played a part in worsening congestion. The number of private-hire vehicles has jumped 26 percent in the past few years, according to the city agency. In New York City, where there are now twice as many Uber and Lyft cars as yellow taxis, transportation analyst Charles Komanoff has crunched Uber’s own numbers and estimated that Uber-caused congestion has reduced traffic speeds in the central business district by about 8 percent.

Urban cores, which have already been operating at or near traffic capacity, cannot simply add thousands of additional cars to already-crowded streets and not expect dramatic knock-on effects. That’s just common sense.

Yet in Farhad Manjoo’s glowing review of UberPool, he cites a new report from the American Public Transportation Association that suggests the opposite. Other media outlets also uncritically cited this report with puffball coverage, despite glaring methodological shortcomings.

The APTA surveyed more than 4,500 people about their transit and travel habits. The average household income of survey respondents was $90,926, which is nearly twice the average household income of all Americans – hardly a representative sample. Among the respondents, only 10% used ridesharing, which was used far more for socializing than other needs like getting to work. Nevertheless, the report’s grand conclusion was that those who use ridesharing are more likely “to use public transit, own fewer cars, and spend less on transportation overall.” But is that a causal connection or mere coincidence? Perhaps those with brown hair or blue eyes are also more likely to use public transit, own fewer cars, etc. The researchers didn’t even attempt to probe deeper and figure that out.

And neither does Manjoo, who reports the results uncritically.  Indeed, he doubles down and claims that “Uber’s data bears this out,” which points to one of the most glaring shortcomings of his article. Anyone who has been following Uber (as well as other “sharing” economy companies like Airbnb) knows that this is a company that plays fast and loose with the facts. Princeton economist Alan Krueger discovered this, much to his embarrassment, when he co-authored an Uber-funded study with an Uber executive that was panned by other economic experts and critics. Indeed, relying on Uber’s data is like trusting the tobacco companies to do their own studies.

We’ve already seen numerous examples of manipulation, such as CEO Kalanick at one point saying with a straight face that his full-time drivers make $100,000 per year, which if true would put them in the upper 10% of income earners in the United States. That was reported at face value by media outlets that should have known better, such as the Wall Street Journal and Washington Post. But that claim bit the dust when some enterprising journalists took a ride with Uber drivers and asked to see their pay stubs, only to discover that most of them don’t make much more than taxicab drivers. Some drivers claim they make less than minimum wage, once you subtract their considerable driving expenses. Now Uber’s chief PR flack David Plouffe – yes, the same strategist who ran Barack Obama’s campaign in 2008 – has changed the Uber hit tune, saying that the service is “saving the middle class” by mostly creating part-time jobs where people can make a few extra dollars. Their boasts about six figure incomes are gone.

Despite Uber’s data being thoroughly suspect, throughout his article Manjoo cites it as a credible source. He includes information about the number of “pooled trips” taken so far (allegedly 100 million, an enormous number since this service is still fairly new), the percentage of overall Uber trips that now occur via UberPool (allegedly 50%, a figure that has skyrocketed in an unbelievably short time) and the number of automobile miles (21 million), gallons of gas (400,000) and metric tons of carbon dioxide (3,800) allegedly eliminated by UberPool – just in the first three months of 2016, claims Uber via Manjoo.

Meanwhile, another study from the  University of California Transportation Center of ride-sharing customers in the San Francisco area found that nearly half of respondents said that if they had not had the option of using a ride-sharing service, they would have instead used a public bus, train, bike or simply walked, reports the Washington Post’s Catherine Rampell. This study indicates that ride-sharing is taking away business, not just from traditional taxis, but also from more low-carbon modes of travel.

Undermining public transit. Not only is ride-sharing flooding the streets with cars and increasing traffic congestion, but it also may turn out to be a direct threat to public transportation, particularly in its latest UberPool incarnation. The economics of public transit systems are built around the busiest bus or train lines, which are heavily used and profitable, subsidizing other routes which are not so full. That equation is crucial in allowing a public transit system to be citywide and serve less-populated neighborhoods. If Uber and Lyft begin offering a service that sprints up and down the busiest and most profitable routes, such passenger poaching could destroy revenue for public transit.

Indeed, the Eno Center wrote a report that examined the impact of new technologies on transportation, and warned about the transit tragedy that will result if Uber and Lyft end up forcing traditional modes like public transit and taxis out of business. “Lower income travelers that do not have access to a smartphone or cannot afford the new services might be left worse off as the traditional transit services they rely upon lose market share,” concluded the report. So it’s alarming that Kalanick has described UberPool as “a private bus-type service.”

Can UberVAN be far behind, in which Uber provides loans to Pool drivers to buy their own 15 passenger vans? Kalanick has always said his “enemy” is Big Taxi, but having won that battle, now it appears that he has set his bull’s-eye on his real competition in this transit space: public transportation.

It’s unfortunate that the New York Times can’t bring a more critical and healthy skepticism to its reportage – is it really that hard to say to Travis Kalanick, “OK, prove your claims?” The Times does publish some solid “new economy” reporting from several of its writers, such as “Your Money” columnist Ron Lieber about Airbnb, with Lieber writing several exposés about the considerable liability issues, data manipulation and lack of corporate accountability associated with that home-renting service.  So this is not an issue of some general infatuation with the so-called “sharing economy” at the Times. No, for some reason, Uber gets the kid gloves treatment.

But lest I sound too overly carping, I will end this by praising a new service announced from Lyft called Lyft Carpool. Despite Lyft recently revealing (unintentionally) that it is, in fact, a taxi company, not a “technology” company, with the launch of yet another service in which it will rent cars to drivers who don’t have their own vehicles, Lyft Carpool shows real potential. It uses app technology to connect a person who is already commuting to work with a passenger traveling along the same route. The driver gets to make a little extra money (up to $10) while driving her or his regular course. The service could help fill up some of the scandalous number of empty seats in cars driving back and forth to work, and that would be a good thing. It could help revive the practice of carpooling to work, which has been slowly dwindling in the U.S. to levels that are less than half those in 1980.

Lyft Carpool charges a service fee, though in its Terms of Service, the specific amount is left oddly unspecified. Regardless, it seems like a worthy undertaking – and also one bound to not be a moneymaker for Lyft. Not only are other companies such as Carma already inhabiting this space more responsibly, but once a driver and passenger are connected and have begun regularly carpooling together, why would they need to continue to use the Lyft app? Cut out the middleman, cut out the service fee.

What this points to is that this app-based technology has great potential and opportunity, once the for-profit incentives and greed of venture capitalists are removed from the equation. I can think of no good reason why nonprofit organizations, as well as the government, shouldn’t create its own versions of transportation apps that would be offered to the public for minimal cost. Where are the techies out there looking to make a difference, rather than gobs of money? Public service awaits your talented contributions. Don’t make us hold our breaths too much longer.

By Steven Hill

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