072416i-Uber

Uber’s first entanglement with local government in Massachusetts foreshadowed every conflict the company would encounter in every city across the country, characterized by an unwillingness to compromise powered by a bankroll and connections that make it possible to steamroll local municipalities. In August 2012, Cambridge and the state Division of Standards issued a cease-and-desist order for noncompliance with local regulations. Uber’s response? “Uber will continue full speed ahead.”

Opinion boxThe challenge was overturned by a judge, and Uber went on this way until California and Seattle decided drivers weren’t a standard feature that comes with a car, like air conditioning or cup holders; they had rights. Seattle is letting drivers for Uber, Lyft and other app-based car services organize and form unions.It’s dismaying the Massachusetts Legislature won’t also take steps to protect drivers.

It shows how the social contract Democrats forged in the wake of the Great Depression, championed by Massachusetts politicians such as Tip O’Neill, Ted Kennedy and Elizabeth Warren, is being poisoned by “sharing economy” companies including Uber, Lyft, Airbnb and TaskRabbit.

By punting on legislation that would impose new regulations on ride-for-hire tech darlings Uber and Lyft, dumping the dirty work into the lap of city and town government, the party has pulled off an impressive triple lindy: absolving itself from having to legislate against Uber and Lyft, ensuring politicians won’t be forgotten come election season; alienating marginalized workers it could have helped; and proving Thomas Frank, the political analyst and co-founder of The Baffler, correct in writing that Massachusetts Democrats are a party of professional-class, innovation liberals espousing “a liberalism of the rich.”

072416i Uber wide 1

Uber’s unrelenting emphasis on driver independence means its “partners” (applied like Walmart’s backhanded sobriquet for its own employees, “associates” ) are not eligible for health care, Social Security, disability or sickness insurance, pension benefits, life insurance, unemployment or workers’ compensation, paid sick or vacation, and they do a very good job of hiding these pitfalls from new drivers.

Drivers for Uber are not covered by minimum wage laws, are not able to earn overtime and are responsible for their own gas, insurance and maintenance. Add in a self-employment tax and Uber’s 20 percent commission and it can be common for drivers to earn minimum wage.

Uber didn’t invent screwing over workers; it is just the newest and loudest in a long line of employers dating back decades. It was conceited captains of industry who said they were the job creators and it was government standing in the way of prosperity – that it was their wealth that would trickle down, creating a thriving economy. Instead, by deregulating markets and assaulting unions, these brilliant barons of the boardroom created the greatest gap in inequality the country has seen since before the run-up to the Great Depression.

How has that worked out here, a bastion of liberalism? The Boston-Cambridge Metro Area has the sixth-highest rate of income inequality in the country; Boston has the highest rate of income inequality of any city; Massachusetts has the fourth-highest rate among states.

It’s no surprise, then, to witness the success of Uber’s hyperbolic reaction to state Sen. Linda Dorcena Forry and state Rep. Michael Moran’s attempts to include regulations that drivers be fingerprinted and for those companies to disclose how they calculate fares. Uber activated its massive social media outrage machine, claiming: “Entrenched industries that have failed to innovate for decades are attempting to destroy ride-sharing in the Commonwealth.”

072416i Uber wide 2

Local government’s demand for fingerprinting led Uber and Lyft to abandon Austin, Texas, where smaller companies that will comply with the law, such as Boston-based Fasten, are filling the void, proving that Uber does not really innovate. It is not a technological marvel. What Uber has done is to create a new and shinier mousetrap – cloaked in the praise of billionaires and handed legitimacy by feckless local governments – used to misclassify, exploit workers and avoid oversight.

It’s very difficult to defend these practices to the 24 percent of drivers who say Uber is their only source of income, or to defend Uber’s uncompromising arrogance dealing with local government, insistence on self-regulation and obscene profitability built on worker exploitation, which make its business model the toast of Wall Street, Silicon Valley and the Chamber of Commerce – and the bane of working-class and, increasingly, middle-class citizens.

Working to reclassify drivers for what they really are – employees – requires federal legislation, which is not coming, but the city can pass an ordinance granting drivers the ability to bargain collectively. The drivers are independent contractors, completely outside the parameters of the laws that govern the employer-employee relationship, and there is nothing in the law that says cities are barred from regulating relationships between businesses and independent contractors, a fact Seattle’s city council applied in crafting its ordinance.

This Seattle model is not unprecedented. In the 1970s, farmworkers in California, who aren’t covered by the National Labor Relations Act protecting unionizing, were given the right to bargain collectively. Public employees are also not covered by the act, but states grant them the right to bargain.

Cambridge has the opportunity to help workers and beat Uber at their own game.


Sean Mulkerrin is a Boston resident who has worked in Cambridge politics.