The ride sharing firm Uber

The ride sharing firm Uber is a popular new business (an app and website) and acts as a conduit connecting individual drivers who are willing to share a ride with individuals needing transportation. Currently, operating in sixty countries, the business had an estimated worth of 50 billion dollars in 2015 (MacMillan and Demos, 2015).

Uber is part of what is known as the “gig economy” a rapidly growing part of the US economy. Other examples are Lyft (also a ride sharing business), HomeAway and Airbnb, and activities encompassed by the so-called sharing economy. The term gig, borrowed from the music scene where artists/bands landed temporary gigs for performances, is often described as a free-market system where people work as independent contractors more so than employees, often in temporary job positions. The companies involved save money on the costs of training, benefits/taxes and office space, while maintaining greater flexibility to change directions without worrying about their work force.

Workers may be allowed to focus on job tasks they are more interested in, gain greater work-life flexibility and balance, especially when adding such a job on as a part-time job. They also lose certain benefits, including, generally, the right to file for unemployment and many of the other benefits that made traditional employment more popular than piece-work pay. In some cases, the difference between what makes sense (e.g., in terms of regulating a hotel and someone renting out their basement) seems obvious, in other cases, the differences are less obvious, as is the case with ride-sharing companies and taxis.

Grounded in the use of analytics, Uber has revolutionized transportation for individuals (without their own transportation). Using what is termed “ride sharing,” Uber is replacing the traditional tax cab business in major urban areas such as New York City (Hu, 2017) and have provided new alternatives to public transportation. The process for a customer using Uber, works something like this:

1-An individual starts with an email address and phone number. They can use a browser (https://m.uber.com/looking) or the Uber app which they have downloaded on their cell phone.

2-Using the website or app, the user enters their destination in the “where to” box. The user then can confirm a pick up location and can confirm that they have been matched to nearby driver.

3-As your driver drives toward your pick up location, you can track their arrival. Uber provides you the driver’s name, car model, and license plate number of the car.

4-As the car arrives, Uber recommends that you check the information provided (driver’s name, car model, and license plate number) before you get into the car. Uber recommends that you ask your driver to confirm their name before you get into the car or at least before the car departs.

5-The driver then drives you to your destination. You then pay the driver cash, use a credit card, or use Uber cash balance.

6-You then have the opportunity to rate how well your trip went, make comments about your driver, and add a tip in the app. The rating of the driver is important in that it allows future passengers to evaluate whether they want to accept a ride with the driver.

How Uber Plays Politics

Uber has been very successful not only at using new technology to build their business but they have also used their technology to resist governmental regulation. In Virginia, for example, after a state official had declared that Uber was illegally conducting business within the state, Uber directed Uber users to email and phone the state official. Combined with an effective lobbying effort of the state government, Virginia eventually backed down (Helderman, 2014).

Led by its chief lobbyist David Plouffe (Barack Obama’s political and campaign adviser), Uber has become a significant political force and its lobbying activities as measured in money have steadily increased since the creation of the business (see Figure 1). In 2018, Uber’s contributions to political candidates were highlighted by their largest contributions going to two well known candidates, $10,180 to Republican Anthony Gonzalez (the former NFL player and now a US Congressperson from Ohio) and $10,140 to Democrat Beto O’Rourke (the former US House member who lost a race against Senator Ted Cruz in Texas) (Opensecrets.org 2018).

Figure 1 Annual Lobbying by Uber Technologies