Driver-Owned Ride-Hailing Services

Discussion

What might a driver-owned Uber look like?

Excerpted from Nic Wistreich:

“There’s at least three options…

1. Like Uber/Lyft/etc, but a giant Coop.

A logical starting point would be simply to recreate Uber/Lyft/etc, with their global network of offices, drivers, marketing and technical infrastructure, as a driver-owned coop, operating either non-profit or with its profits distributed amongst drivers. It would need to be a large, well financed (Uber has raised $7bn over 12 rounds https://www.crunchbase.com/organization/uber), dynamic organisation with a legal and customer service team in every country it operated in.

A single-coop competitor is appealing at first because it would be easier to manage, brand and offer users quality assurance. It would however require a commonly agreed-upon set of regulations and pricing, which every taxi would have to follow, so would have considerable power to set pricing and behaviour amongst its members. This inevitably would run against national and regional differences between taxi services. Internal voting and localised rules could mitigate some of this, but given there are no successful giant democratic coops working on an Uber scale of 160,000+ drivers to hold as an example, there’s a reasonable risk it would become as unaccountable and top-down as any large business. It would still create a monopoly with the potential to be restrictive for users and drivers in demanding a one-size-fits all set of rules. Given how much money it would require to get started it would also have a number of investors doubtless wishing to influence direction.

This isn’t to say such a structure couldn’t work, but by centring so much potential power, it seems to miss many of the advantages of networked systems, including greater competition and opportunities for innovation.

• 2. A federation of existing taxi companies all funding and using the same software

Another approach would be to build on existing taxi companies who already have relationships with drivers?—?and often leasing agreements and insurance schemes around their fleet of cars. This would both distribute more control out beyond the central coop, responsible for creating software, and work to build upon an existing networks, brands and services, rather than trying to throw them all out of business.

The coop in this instance would produce ‘white label’ software to manage drivers and payments for each of the companies, and also a single app which the user downloads. At this point either all the companies in each city and region would need to agree on and use the same prices, or the app would need to indicate that different cars were from different companies and had different prices. By letting each taxi company set their own prices this would create greater potential for competition and variation?—?car company X with the older cars is 20% cheaper than taxi firm Y which only has recent Sedans, while company Z has 100% electric fleet of Tesla cars.

As well as offering more choice and competition, it also removes from the main coop the burden of verifying and approving new driver’s identifies or providing customer service. It is more closer to an infrastructure, software-as-service company, serving it’s members, who are all established companies. On a simple level, this already exists?—?a company like Mowares offers an Uber clone from $400 http://venturebeat.com/2014/09/11/yes-a-build-your-own-uber-for-x-kit-costs-only-400/. What a coop?—?owned by all the local taxi companies paying for installs?—?could further do, is ensure that each install could communicate with each other and produce a single app for users to download that connected them to all of their local taxi companies.

However this fails to liberate drivers from the middle-man, the taxi company, an extra cost which Uber has removed. Part of Uber’s success is replacing the expense of taxi offices, switchboards and phone receptions with software, and thus reducing the cost of journeys. So this coop model may always end up more expensive than Uber or Lift as it needs to pay both driver, the coop producing the software/service and the taxi companies representing the driver. While some companies, such as executive car services, with account management, may offer sufficient value to justify the added cost, it’s hard to imagine the cost-conscious end of the market acting in the same way. It also doesn’t help the driver who, for whatever reason, doesn’t want to join the local taxi-company, which may be an issue in areas where there is only one taxi service?—?nor does it help the end user discriminate between a taxi company with a great reputation and one with far worse service.

However, a service which lets drivers register directly has a greater administrative burden, and legal liability, around verifying drivers and their licensed vehicles. To do this job well it ends up becoming much closer to the first option above.

All that I’ve read and my thinking for most of the summer seems to move between these two models?—?either a large centralised coop that verifies individuals who join up but that risks being undemocratic, or a more decentralised, federated system that only works with companies who in turn take responsibility for driver management and verification.” (https://medium.com/@netribution/db6ce8ba3fdb)

More Information

• see our articles on Uber and Platform Cooperativism which have a directory of such services