“The right to the city is far more than the individual liberty to access urban resources: it is a right to change ourselves by changing the city. It is, moreover, a common rather than an individual right since this transformation inevitably depends upon the exercise of a collective power to reshape the processes of urbanization.” – David Harvey, The Right to The City
What happens when local organizing is successful, advancing progressive reforms, redistributive politics, and making the right to the city a reality? How does capital respond? In recent years a potent response has been pushed by Silicon Valley through the advent of the gig economy—simply ignore the law.
Much of the attention placed on Uber’s business model has focused on the issue of employee misclassification. What remains under-examined is how Uber’s business model is also a direct challenge to municipal self-governance. When Uber entered U.S. cities it did so illegally, arguing that because it is tech company, and therefore not a service provider, it did not need to obtain local taxi permits or follow local regulations.
Uber’s business model can best be described as “we break it and then demand that you buy it.” Uber’s utilization of the illegal entry model is a direct response to the reality that cities have become more progressive. In the past Uber might have been able to lobby cities to simply change their laws preemptively. An insurgent labor-antipoverty coalition has pushed U.S. cities to the left advancing the right to the city, addressing community concerns. Uber’s employee free business model is a strategy designed to counter to this success.
In a recent study I explore how the labor-antipoverty coalition and cities responded to Uber’s illegal entry. Utilizing original data on municipal regulatory response and labor protest against Uber’s illegal entry I explored what factors account for stronger or weaker municipal response in the U.S.’s largest cities. Faced with Uber’s illegal entry almost half of the cities failed to act. Cities that took stronger responses either faced driver protest, had stronger existing laws, or were places where Uber entered later.
Silicon Valley and the rise of local progressivism
Since the late 1990s there has been a surge in city level activism in the United States. Born out of frustration with federal government inaction a labor-antipoverty coalition emerged pushing long stalled progressive programs at the municipal level including living wages, paid sick days, and community benefits agreements. The movement was surprisingly effective finding success all over the country.
The resurgence of progressive municipal politics is counter to dominant neoliberal and Marxist informed theories of city power under capitalism. Those working within the neoclassical economics tradition exemplified by Paul Peterson in City Limits argue that American federalism combined with capital mobility prevents cities from engaging in redistributive politics because doing so risks the flight of capital or taxpayers to the suburbs. Harvey Molotch working outside the neoliberal tradition similarly believes City’s cannot engage in redistributive politics because cities are “growth machines” beholden to property taxes and entrenched real estate interests. David Harvey working in the Marxist tradition finds the financialization of real estate further increases capital’s hold on local governance.
Despite broad pessimism we have seen a flourishing of progressive municipal policy making. Richard Schragger in City Power argues this growth is due to cities’ power of agglomeration and globalization which has decoupled the economies of U.S. cities from the national economy.
Considering the rise of municipal politics, I argue we should view Uber’s employee free business model and illegal entry as an attack on cities. Uber’s attack took two forms. First, their illegal entry and misclassification attempts to circumvent the law. Second, Uber utilized preemption to enlist States in disciplining their cities. Preemption proved particularly effective as most States in the U.S. have now preempted municipal regulation of Uber to varying degrees. This effort was particularly powerful in places like Texas and Florida where conservative state governments overturned local progressive cities’ attempts to regulate Uber.
Municipal and labor-antipoverty coalition response
While Uber’s attempts to counteract municipal progressivism was quite damaging, I found the labor-antipoverty coalition was important in fighting back. The strongest predictors of aggressive local response to Uber’s illegal entry were driven by past regulatory strength and driver protest. The importance of driver protest indicates that Uber was not fully able to circumvent the power of the labor-antipoverty coalition.
Additionally, I found a learning effect as cities where Uber entered later were more likely to take a stronger response. It appears that over time, as the externalities of Uber became clearer it drove action. Particularly important was a report which found a rash of driver assaults on riders due to Uber’s refusal to follow local criminal background check standards.
The case of New York City is illustrative of the study’s findings. When Uber first entered New York City is did so illegally. When the City first attempted to regulate them in 2014 the company aggressively lobbied the council forcing them to backdown. Uber weaponized its app to have customers petition their council members and tried to divide progressives by arguing Uber’s model fixed racism in the industry.
Following this initial failure, the labor-antipoverty coalition mobilized. In New York City taxi drivers are represented by the New York Taxi Workers Alliance a union/worker center hybrid. Refusing to take an exclusionary approach the Alliance began aggressively organizing Uber drivers whom they argued were workers from the same immigrant communities and facing the same issues as their yellow cab members.
In line with the paper’s findings the Alliance mounted aggressive protest actions which drove support for regulation. The Alliance also mobilized the City’s strong existing taxi regulation structure arguing they were asleep at the switch. As Uber’s illegal entry eventually hurt earnings in the industry, both taxi and Uber drivers found they couldn’t make a living. Faced with the stress nine drivers took their lives. The rash of suicides and the Alliance’s publicity of the drivers’ stories furthered the call for regulation.
Over time the issues with Uber became more apparent and the Alliance’s coalition grew. Environmentalists joined the cause after it came to light that much of the City’s increase in traffic was due to Uber. In addition, Uber faced a customer backlash, with calls on Twitter to #DeleteUber, after Uber attempted to break the NYTWA’s strike of New York City airports in support of immigrants protesting President Trump’s Muslim travel ban.
These forces resulted in the City Council passing a first-in-the-nation cap on the number of app vehicles allowed in the city and authorized the TLC to establish a minimum wage for drivers.
The success of the labor-antipoverty coalition during the last several decades pushed the right to the city and prompted a strong backlash from capital in the form of the gig economy. The gig economy utilizes technological innovation as a legal justification to eliminate employment protections and to prevent municipal self-determination. While Uber was rather successful in bullying and preempting its way into U.S. cities the externalities of this business model remain and groups like the Alliance show labor and cities can fight back.
To read more, see: Andrew B. Wolf. City Power in the Age of Silicon Valley: Evaluating Muncipal Regulatory Response to the Entry of Uber to the American City in City & Community, 2022.
Image: Jen Karlsson via Flickr (CC BY 2.0)