Rethinking the Cult of Disruption

Uber is in the news again: In Paris, a protest against the company has turned violent, with some aggrieved taxi drivers going so far as to throw rocks at perceived Uber vehicles. In my experience, these kinds of occurrences at protests are usually the result of complex chains of events occurring on the ground which are rarely if ever covered in any detail in the mainstream media, so I’m not going to discuss the rock-throwing. Let’s just say that the Parisian taxi drivers have some legitimate grievances against Uber, but that throwing rocks is probably doing a lot more harm than good, and leave at that.

Would you believe that this scene is the result of a personal transport app? Photo from the New York Times.

I am, however, interested in these protests as an example of the kind of conflict that emerges around new technologies, particularly when labour gets involved. We usually see two opinions on this kind of situation. Inevitably, one group of pundits will say that the French cabbies are standing against progress to protect their own narrow interests. A second group of pundits will argue that Uber, a rapacious Bay Area tech company, is determined to hollow out the entire taxi industry and reduce taxi drivers with to independent contractors with no job security or meaningful benefits-a view that has recently been vindicated by a California judge’s decision that Uber needs to treat its drivers as employees.

The second storyline is not completely implausible, but it has led to some campaigns against Uber that seem to suffer from some of the same hubris displayed by the Luddites who embarked on a campaign of sabotage against English industrialists in the nineteenth century, because machines and factories were pushing traditional craftsmen out of work. This comparison is often used in a perjorative sense, but that is not how I intend it. The Luddites had some very legitimate grievances, and if you read their history with a bit of empathy, you will see something heroic in their struggle. I am not positing any vague sense of technological ‘progress’ which Luddites stand in the way of. Technology does not progress linearly, but evolves fits and starts, in directions which are most often chosen by powerful people, but which are by no means pre-determined. Some technologies, furthermore, have bad consequences attached to them. Not all innovation is good.

My point in making the Luddite comparison is that regardless of the justice of their cause, the luddites lost. This was partly because of a ruthless crackdown by the British government, but even without that, is there any scenario in which the luddites’ campaign of vandalism would have shut down the industrial revolution? Probably not. To take another example, the entertainment industry, often supported by governments, has been trying to suppress online distribution of media in favour of more traditional distribution channels for nearly 20 years now, and they are still losing. The lesson here is that technology doesn’t get un-invented, and once people start using it, they are likely to continue to do so. That means that services like Uber are probably here to stay. The question, then, needs to be what form they will take. That should be the emphasis of Uber’s critics.

Supporters of Uber often frame it in terms of the consumer, and argue that disrupting existing bureaucracies, institutions, and business structures to create more competitive services will be good for taxi users. There is some truth to this. This report on the taxi industry demonstrates that the average inflation-adjusted taxi fare has not meaningfully decreased since the 1950s, and that just 57 percent of a taxi fare goes to drivers’ earnings-the rest going to mainly to vehicle maintenance and the owner’s earnings. Drivers deserve a decent living of course, but there’s a trade-off here, because there are many economically marginalized people who depend on taxis during the course of their lives. A decrease in taxi fare is therefore a good thing, especially if it is the result of cuts in vehicle expenses or owner profits rather than drivers’ wages. It is therefore not entirely fair to see Uber’s shake-up of the industry from the sole perspective of the taxi drivers.

At the same time, however, we should be wary of the “cult of disruption“, which assumes that all change, especially if it is technologically-driven, is good. Just because a technological innovation is making an industry more efficient does not mean that those efficiency gains are accruing to the consumer. It is just as likely that new technology will be used to squeeze the workers a little bit harder while investors simply pocket the profits without offering consumers any kind of discount.

So we can understand any technological disruption as shaking up the relationships between three key groups of stakeholders: Workers, consumers, and owners. Under neoliberal capitalism, the owners have the upper hand. They own most of the financial assets, which includes most of the investments in companies like Uber, which in turn are pushed to maximize their shareholders’ profits at all costs. That means that while workers or consumers might see some improvements from time to time, most of the benefits of any new technological development are going to investors and owners. What if, however, the benefits went elsewhere? What if rather than breaking machines, the Luddites had set up their own cooperative factories, and found ways to integrate mechanical production into their cottage industry? What if the Parisian cab drivers created a co-operative version of Uber, making the tech-bros simple employees hired by cabbies to code an app for them? The result could be a taxi service that cuts out middlemen of all kinds and puts more money in the hands of both taxi users and drivers. There is no guarantee that this will succeed, but it has a much better chance of success than hoping Uber just goes away.

Critics of the cult of disruption have gone to great lengths to tell us that not all disruption is good, and they’re right about that. But we can say with just as much certainty that not all disruption is bad. Critics of Uber should be thinking of ways to leverage Uber’s technology not just to compete with Uber itself, but to change working arrangements to benefit both consumers and workers, rather than just owners.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s