Cory Doctorow: Disruption for Thee, But Not for Me
The Silicon Valley gospel of “disruption” has descended into caricature, but, at its core, there are some sound tactics buried beneath the self-serving bullshit. A lot of our systems and institutions are corrupt, bloated, and infested with cream-skimming rentiers who add nothing and take so much.
Take taxis: there is nothing good about the idea that cab drivers and cab passengers meet each other by random chance, with the drivers aimlessly circling traffic-clogged roads while passengers brave the curb lane to frantically wave at them. Add to that the toxic practice of licensing cabs by creating “taxi medallions” that allow businesspeople (like erstwhile Trump bagman Michael Cohen) to corner the market on these licenses and lease them to drivers, creaming off the bulk of the profits in the process, leaving drivers with barely enough to survive.
So enter Uber, an app that allows drivers and passengers to find each other extremely efficiently, that gives drivers realtime intelligence about places where fares are going begging, and which bankrupts the rent-seeking medallion speculators almost overnight.
Of course, Uber also eliminates safety checks for drivers (and allows them to illegally discriminate against people with disabilities, people of color, and other marginalized groups); it used predatory pricing (where each ride is subsidized by deep-pocketed, market-cornering execs) to crush potential competitors, and games the regulatory and tax system.
Uber (and its Peter-Thiel-backed rival Lyft) are not good companies. They’re not forces for good. But the system they killed? Also not good.
In 2016, the City of Austin played a game of high-stakes chicken with Uber and Lyft. Austin cab drivers have to get fingerprinted as part of a criminal records check, and Austin wanted Uber and Lyft drivers to go through the same process.
Uber and Lyft violently objected to this. They said it would add a needless barrier to entry that would depress the supply of drivers, and privately, they confessed their fear that giving in to any regulation, anywhere, would open the door to regulation everywhere. They wanted to establish a reputation for being such dirty fighters that no city would even try to put rules on them.
(Notably, Uber and Lyft did not make any arguments about criminal background checks perpetuating America’s racially unjust “justice system” in which people of color are systematically overpoliced and then railroaded into guilty pleas.)
Austin wasn’t intimidated. They enacted the rule, and Uber and Lyft simply exited the city, leaving Austin without any rideshare at all. All the drivers and passengers who’d come to rely on Lyft and Uber were out of luck.
But the drivers were undaunted. They formed a co-operative and in months, they had cloned the Uber app and launched a new business called Ride Austin, which is exactly like Uber: literally the same drivers, driving the same cars, and charging the same prices. But it’s also completely different from Uber: the drivers own this company through a worker-owned co-op. They take home 25% more per ride than they made when they were driving for Uber. Uber and Lyft drivers commute into Austin from as far away as San Antonio just to drive for Ride. That’s how much better driving for a worker co-op is. [Edit: RideAustin reached out to us to correct this information. RideAustin is not a driver co-op, and was not founded by drivers. Also, RideAustin did not launch “months” after Uber and Lyft pulled out of Austin, as the article states. RideAustin was founded within a week after the big guys left, and began rides less than a month later (first ride was on June 16, 2016). More information can be found at their site, RideAustin.com.]
I remember when the term “platform cooperativism” was first bandied about to describe this kind of thing. I was at a small, invitational tech conference where nerds, investors, activists, lawyers, SF writers and other technologically oriented types were gathered. I was on a panel about these platform co-ops and I said that I thought Uber would be really easy to replace with a co-op: the riders and the drivers valued the service, not the logo on the app, and plenty of people were happy about the convenience of Uber but unhappy about the creepy, rapacious nature of the company behind it.
An investor in the audience stood up to tell me how full of shit I was: I had no idea just how complicated Uber’s app and infrastructure were, and there was no way a bunch of grubby drivers would ever be able to match its expert coding and administration.
He was so wrong.
But there’s another, better argument against this kind of platform cooperativism: “discovery costs.” I first hailed a Ride car at South By Southwest, not long after Lyft and Uber had exited the city, and everyone going to the festival had been repeatedly warned that they would have to download the Ride app to get around the city (Austin’s taxi fleet hasn’t been up to the SXSW crowds for more than a decade, and never less so than now, having been crippled by Uber and Lyft).
So I was prepared. When I land in another city, the first app I try when I need to get around is Lyft, then Uber (Uber was a godsend in Shanghai, where we were repeatedly cheated by regular cab drivers, but where the Uber app kept everything aboveboard). Some or all of these cities might have co-op rideshares, but there’s no easy way to know about it, and without passengers, there’s no incentive for the drivers to drive for the co-ops, so even when you do try to hail a co-op, there won’t be any drivers available.
Lyft and Uber have moved back into Austin, and their drivers get fingerprinted. I just got my speaker-info package from SXSW for the 2019 festival, and the advice to download Ride before touching down is no longer the top of the checklist. I imagine that most of the attendees at SXSW will be getting around with Uber and Lyft, and 25% of the money they spend will go to those companies’ shareholders, not to the drivers.
But imagine a disruptive app that disrupted the disrupters.
Imagine if I could install a version of Ride (call it Meta-Uber) that knew about all the driver co-ops in the world. When I landed, I’d page a car with Uber or Lyft, but once a driver accepted the hail, my Meta-Uber app would signal the driver’s phone and ask, “Do you have a driver co-op app on your phone?” If the driver and I both had the co-op app, our apps would cancel the Uber reservation and re-book the trip with Meta-Uber.
That way, we could piggyback on the installed base of Uber and Lyft cars, the billions they’ve poured into getting rideshare services legalized in cities around the world, the marketing billions they’ve spent making us all accustomed to the idea of rideshare services.
This Meta-Uber service would allow for a graceful transition from the shareholder-owned rideshares to worker co-ops. When you needed a car, you’d get one, without having to solve the chicken-and-egg problem of no drivers because there are no passengers because there are no drivers. One fare at a time, we could cannibalize Lyft and Uber into the poorhouse.
The billions they’ve spent to establish “first-mover advantages” wouldn’t be unscalable stone walls around their business: they’d be immovable stone weights around their necks. Lyft and Uber would have multi-billion-dollar capital overhangs that their investors would expect to recoup, while the co-ops that nimbly leapt over Uber and Lyft would not have any such burden.
Could we do this?
Yes. Technically, this isn’t all that challenging. Create a service where drivers and passengers’ devices all register unique, per-ride codes, have the Meta-Uber check to see if the driver’s device has just posted a unique code that matches yours, and then use the built-in ride-cancelation tool that’s already incorporated into Uber and Lyft to tear down the old reservation and re-create it with Meta-Uber.
What about legal impediments, though?
That’s where the trouble starts. Tech law is a minefield of overly broad, superannuated rules that have been systematically distorted by companies that used “disruption” to batter their way into old industries, but now use these laws to shield themselves from any pressure from upstarts to seek to disrupt them.
First is the Computer Fraud and Abuse Act, passed in 1986 in part to assuage Ronald Reagan’s panic after seeing the movie Wargames (I am not making this up). CFAA is nominally an anti-computer-intrusion statute, which criminalizes “exceeding your authorization” on a computer that doesn’t belong to you. Even when it passed, more than 40 years ago, technologically clued-in scholars and practicioners warned that this was way too broadly defined, and that someday we might see this rule used to felonize normal activities involving computers we owned, because the computers would have to talk to a server to accomplish part of their work, and the server’s owner could use onerous “user agreements” and “terms of service” to define our authorization. If this became widespread, then these licenses could take on the force of criminal law, and violating them could become a jailable offense.
40 years later, those fears are vindicated: CFAA is used to threaten, intimidate, sue, and even jail people engaged in otherwise perfectly lawful activity, merely because they have violated some term of service on the way. The metastasis of terms of service into sprawling novellas of impenetrable legalese has created a world where anything you do to frustrate the commercial ambitions of digital monopolists is a potential criminal offense.
Then there’s Section 1201 of the Digital Millennium Copyright Act of 1998, a Bill Clinton bill that creates a felony for “bypassing an effective means of access control” (AKA Digital Rights Management or DRM) for copyrighted works. Twenty years ago, the proponents for this bill argued that it would be used to safeguard certain marginal commercial technologies: under DMCA 1201, it would be illegal to bypass the region controls on a DVD player, allowing movie studios to force you to buy your DVDs in the same place where you bought the player – it would also allow Sega to force you to buy your Dreamcast games on CDs that came from official Sega pressing plants, rather than direct from the games’ authors, ensuring that Sega would always get a share of the revenues from the sale of games you played on your console.
Again, experts warned Congress that DMCA 1201 was way too broad and would be ripe for abuse, as software crept into more systems. Again, the experts were right. Today, DRM is used to force people with artificial pancreases to buy proprietary insulin and people with inkjet printers to buy proprietary ink; it’s used by car manufacturers and phone manufacturers to control who can make parts for their products and who can service them; it’s found in voting machines, tractors, thermostats, virtually every device with software, and it has no connection with copyright enforcement. Rather, it is used for “business model enforcement,” to ensure that disruptive, but legal, ways of using a product or service are made illegal – from refilling your printer’s ink cartridge to getting your car or phone serviced by an independent neighborhood repair shop.
Together, the CFAA and DMCA have given digital businesses access to a shadowy legal doctrine that was never written by Congress but is nevertheless routinely enforced by the courts: Felony Contempt of Business-Model.
The CFAA and DMCA 1201 have been carefully distorted into defensive, anti-disruption shields that are only available to digital businesses. Taxi medallion owners can’t use the CFAA and DMCA 1201 to keep Uber and Lyft out of their cities.
But Uber and Lyft could use these legal tools to keep Meta-Uber out of their bottom lines. Uber and Lyft have lengthy terms-of-service that set out the rules under which you are authorized to communicate with Uber and Lyft’s servers. These terms of service prohibit using their servers to locate drivers for any purpose other than booking a ride. They certainly don’t permit you to locate a driver and then cancel the booking and re-book with a co-op app.
And Uber and Lyft’s apps are encrypted on your phone, so to reverse-engineer them, you’d have to decrypt them (probably by capturing an image of their decrypted code while it was running in a virtual phone simulated on a desktop computer). Decrypting an app without permission is “bypassing an effective means of access control” for a copyrighted work (the app is made up of copyrighted code).
Uber and Lyft can use DMCA 1201 to stop you from figuring out how to use them to locate co-op drivers, and they can use the CFAA to stop you from flipping your booking from Uber to Meta-Uber.
There are a hundred other Metas we can imagine: a Meta-Amazon that places your order with the nearest indy bookstore instead; a Meta-OpenTable that redirects your booking to a co-op booking tool.
Every single one of these co-ops would disrupt a digital monopolist who came to power preaching the gospel of disruption. Every single one of those digital monopolists would switch to the aggrieved bleats of a bewildered incumbent apex predator snarling and twisted impotently as its flesh was rent by a thousand tiny bites from swarms of fast-moving, highly evolved successors.
But we never get to bring those lumbering relics down, not so long as felony contempt-of-business-model is still in play in America. Until then, disruption will always be for thee and never for me.
Cory Doctorow is the author of Walkaway, Little Brother, and Information Doesn’t Want to Be Free (among many others); he is the co-owner of Boing Boing, a special consultant to the Electronic Frontier Foundation, a visiting professor of Computer Science at the Open University and an MIT Media Lab Research Affiliate.
This article and more like it in the January 2019 issue of Locus.
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27 thoughts on “Cory Doctorow: Disruption for Thee, But Not for Me”
If I recall correctly, while Uber currently performs background checks on drivers in Texas, they are not fingerprint-based. They successfully lobbied the Texas legislature to override the Austin statute.
yes, uber and lyft DO NOT fingerprint drivers. Lyft does not fingerprint ANYWHERE in the U.S. Hard to take you seriously, Poindesxter, when you can’t get the basic stuff right!
7000 NYC medallions are owner operated. Each new city medallion would bring a million dollars into the city coffers. NYC could easily have auctioned a thousand more and generated a billion in revenue for the city.
In comes Uber, vilifies taxi driving, and taxi industry through propaganda. Breaks the laws. Spends billions on subsidies to undercut cabs and build market share. Then they employ unilateral cuts to pay after flooding the roads with 100k+ more registered cars. Even their own drivers are protesting.
Make Uber buy NYC medallions. Medallions made taxi drivers earn a living. Uber is a parasite that brings no value. Easy fix.
I don’t see anything inherently bad against refusing to accept ANY regulation, actually. I’ve seen ballot propositions (in California, where I live) that seek to impose restrictions on abortion; I vote no on all of them, because every such proposition or law is a step toward making abortion illegal or unobtainable. And for a long, long time, civil libertarians held that censorship of offensive material should be opposed, no matter how offensive it was, because it’s the first step toward more comprehensive censorship (as Ayn Rand, not usually considered a civil libertarian, put it, “every infringement of human rights has begun with the suppression of a given right’s least attractive practitioners”). Once you concede the principle, it comes down to the punchline of an old joke: “We’ve already settle that. Now we’re haggling over the price.”
So you’d be fine with a company refusing to accept a regulation against pouring their radioactive waste into your back yard?
False information in this article:
I live in Austin and Ride Austin is a tiny share of the market. Uber and Lyft are by far the biggest players in the market
Uber and Lyft drivers DO NOT HAVE to be fingerprinted any more, anywhere in the state of Texas.
Not to mention lots of worn out leftist bleating about the evil Ronald Reagan.
Ironic to find a leftist complaining that there are too many laws!
Nah, it’s just that your priors are mistaken.
“Take taxis: there is nothing good about the idea that cab drivers and cab passengers meet each other by random chance, with the drivers aimlessly circling traffic-clogged roads while passengers brave the curb lane to frantically wave at them.”
I have driven a cab for a living. I’ve also used Uber. First, there’s these things called “cab stands”, normally located near hotels, theaters or other busy locations, where you can usually find a cab waiting for fares. If you live/work within a block of a cab stand it’s actually faster to grab a cab than to use Uber. And I’ve also found it more convenient in the downtown of a major city (Boston, Chicago) to flag down a cab on a busy street. Not to say that Uber isn’t convenient at times as well, especially if your starting point is NOT on a busy urban street, but cabs have their place.
“Add to that the toxic practice of licensing cabs by creating “taxi medallions” that allow businesspeople (like erstwhile Trump bagman Michael Cohen) to corner the market on these licenses and lease them to drivers, creaming off the bulk of the profits in the process, leaving drivers with barely enough to survive.”
While this is quite true, you have left out a very important part of this – WHO CREATED TAXI MEDALLIONS? And who permits particular individuals or corporations to corner the market in them? Not businessmen. It was urban municipal governments, which are rather exclusively Democrat-dominated. While they do have some regulatory value, they are basically a means for Democratic politicians to raise revenue and reward friends, relatives and (especially) campaign contributors. Any city could in an instant pass a law that would limit the number of medallions one person or one company could control – but that would provide insufficient opportunities for graft, so they won’t. The problem here isn’t one of capitalism, it’s one of corrupt politicians, almost all of whom are Democrats.
The author has a weird trust in government regulation, particularly after detailing how government regulation was the problem. He, also, has a weird disdain for consumers, who he sees as too stupid to know what’s good for them. FYI, consumers are the most ruthless regulators in any market. Pretending not government interference between producer and consumer is “no regulation” is to either not understand basic economics or to lie through your teeth. So which is it? Are you ignorant of basic economics or are you lying through your teeth?
Like all good megalomaniacs, the author is actually excited about the fact the Austin government denied consumers a product they wanted because consumers are just too stupid to know Uber and Lyft were wrong think and shouldn’t be used.
It is fun, though, to watch leftoids bemoan other leftoids.
How’s this: Austin tells Uber & Lift “Hey, match the revenue share model of Ride Austin, or get out.” A pipe dream? probably, for now. But a good dream.
It’s kinda strange that numerous comments here are focusing on left-right political allegiances when the essay was targeting poorly written law (sometimes enacted by Republican administrations and sometimes by Democratic administrations). These laws affect all citizens right across the political spectrum.
There is little regulatory appetite right now to enforce anti-trust statutes, and the result is the reduction of choice and the concentration of power. Anyone who uses software (a.k.a. everyone) should be concerned about CFAA and DMCA and similar laws in other jurisdictions. The author’s attempt to highlight the problem is laudable.
Regarding the ride share co-op situation, is there not another solution available that would not run afoul of Uber and Lyft. The author mentions that the drivers in Austin were able to cobble together the complete infrastructure to offer their own competing service in a short amount of time. If this is the case, it should be possible to scale up this existing infrastructure to encompass an ever larger geographic area. Today ‘Ride Austin’, next month ‘Ride Texas’, next month ‘Ride Southwest’, then ‘Ride USA’ … next stop: The World! And in no way would this service parasitize Uber or Lyft since all of the necessary intellectual property is managed in-house.
Well, that’ll encourage people to put up the capital for new industries.
There’s a reason co-ops have such a limited role in our economy, and it ain’t malignant evil corporations.
Capital should flow to where it benefits society, not strictly ones own pocket. Rich people aren’t going to stop investing just because rampant greed is slightly subdued.
As a woman, I have serious reservations about hopping in a car driven by someone who is a contractor with a company that resists laws that were passed to address issues of safety for passengers. I also have the usual problems with the business created for the sole purpose of avoiding paying employees a living wage or benefits. I can rideshare with randos on craigslist that have never been fingerprinted if I decide to live on the edge, and without paying some tech company a cut. PASS. I will call my local hybrid cab company.
And once you’ve slain the dragon and driven uber from the land, how would your app work?
True, co-ops do have a limited role, and it is because the only one’s who make money with them are the employees, not vulture investors. It will be interesting to see what happens when Lyft and Uber run out of money to prop up their low prices and their competition is too weakened to compete. The positive aspects of medallion cabs, from the admittedly little I know, is background checks, car safety and maintenance and consistent pricing. The model that Lyft and Uber use puts the risks and responsibilities on the driver and rider and the rewards will go to the few.
No one should profit from another person’s labor.
Can you detail what forms of violence Uber and Lyft used? Or what dirty tactics they used?
Interesting piece, but seriously?
Sadly, Doctorow is wrong in this much as with many other areas. The medallion system was created by Fiorella La Guardia nearly 90 years ago because there were so many taxi drivers that the occupation became synonymous with thief, rapist and all around crook. If I recall correctly, there were over 12000 taxis in the early 1930s – to compare, there are somewhat less than 14000 today, and taxi patrons in the 1930s were demographically a much smaller part of the population than they are today. There were so many taxis that the drivers just couldn’t make a decent living. The medallions also were created specifically to not be monopolizable; a large percentage are not ownable unless you are a driver/operator/small business.
I don’t disagree that there has been abuse in the medallion system particularly since it has been around so long, but the alternative of “tech based” systems is would-be monopolists/monopsonists like Uber. I don’t know if Doctorow is a libertarian, but he certainly seems to exhibit the libertarian ignorance of economic realities like branding cost, market presence/dominance, customer acquisition costs and other forms of economic friction which favor large organizations.
Lastly, taxi service is also generally decent in most cities in the world, San Francisco being a notable exception. And to be fair, taxi service in poorer and more remote areas of cities is never going to be great. Ironically, the subsidies to riders provided by Uber and Lyft (they’re losing money, after all, at enormous rates), are counter to the “better service” and “more reliable service” aspect.
The evils of ride share, however, are starting to be recognized: More traffic. Slower traffic speeds. More pollution. Bad jobs. Bad service (especially in cities where actual expertise is needed to navigate efficiently and accurately).
The classic reason people try to use and then cut out brokers is cost, not ethics. In real estate for example, it would be “nice” if you could use a broker to find a house and then just deal directly with the owner. People already go to brick-and-mortar stores to find products they will buy for cheaper online.
Companies have all sorts of strategies to discourage this sort of behavior, and Uber could shut-down “meta-uber” with a few tweaks to its app.
>perpetuating America’s racially unjust “justice system” in which people of color are systematically overpoliced and then railroaded into guilty pleas.
More white people than Asian-Americans are arrested and imprisoned. Are white people overpoliced and railroaded into guilty pleas?
Far more men are arrested and imprisoned than women. Are men more likely to be overpoliced and then railroaded into guilty pleas?
What we have here is essentially an author arguing against copyright, intellectual property, and ultimately all property rights if one follows his “logic”. I wonder how Cory would feel if I released a “meta” audiobook that was “exactly like” one of his books, and charged people less for it than he did.
There are certainly problems with laws like the DCMA, but wholesale abandonment of the concepts of copyright and intellectual property isn’t the answer. It’s just a pathetic pipe dream of the economically ignorant and Marxists (please forgive the redundancy).
Those co-ops sound good to someone with a gradeschooler’s understanding of both economics and human behavior.
Why didn’t a coop invent ride sharing? Will the “meta Amazon” innovate, or just keep copying what “real Amazon” does/improves/creates? If the latter (which it will certainly be), what is Amazon’s incentive to innovate, or even operate? (Rhetorical question, the answer is none).
How on earth could the author have the facts so wrong about the timing of the Co-op?? That is one of the most embarrassing corrections I have seen in a long time.
The fundamental injustice of Uber and Lyft is that they (1) require
customers to run a nonfree program that no user can rationally trust,
and (2) require customers to identify themselves (at least to pay).
These are not mere annoyances or expenses. They threaten human
rights. For these reasons, I never use those companies; and, unless
they change both of these things, I will not use them. Instead I use
real taxis, which allow me to ride and pay anonymously.
When Uber and Lyft left Austin, drivers founded a cooperative, Ride
Austin. I am in favor of cooperatives, but injustice does not become
acceptable merely because a cooperative is doing it. Does Ride Austin
let you book a ride anonymously? Can you do it without running
nonfree software? (See
why you should refuse to run, and thus trust, nonfree software.)
I doubt it is possible to run their app without running Android or iOS
— two nonfree operating systems that snoop on people. (_Parts_ of
Android are free software, but many crucial parts are not.) And is
the app itself free?
Does Ride Austin offer a web site with which you can order a car
I would like to know the factual answers to those questions, but even
without those answers, this enough to demonstrate the general point:
replacing a corporation with a cooperative is _not enough_ if it isn’t
joined with respecting the customer’s freedom and privacy (which, to
be adequate, means anonymity).
See https://gnu.org/philosophy/surveillance-vs-democracy.html and
One thing I liked about Ride Austin that no one has mentioned yet is the app allowed you to select an Austin nonprofit to receive a small donation every time you used it. This was shortly after the app launched. Not sure if it still has this feature, or how much the nonprofits have actually benefitted.
“(Notably, Uber and Lyft did not make any arguments about criminal background checks perpetuating America’s racially unjust “justice system” in which people of color are systematically overpoliced and then railroaded into guilty pleas.)”
Shouldn’t it matter what the truth is, though? As far as I can tell, you’re arguing that Uber and Lyft should perpetuate America’s racially unjust justice system by being forced to do criminal background checks if they don’t loudly enough voice the exact kind of objection you want. Doesn’t the end result and the policy matter the most here? Every sort of criminal background system is going to use convictions; if you’re in favor of doing it and think that the justice system has a large racially unjust overcriminalization and conviction problem, then you’re the one on the side of current system by your own definition.
” allows them to illegally discriminate against people with disabilities, people of color, and other marginalized groups”
Though they still do a better job than the taxi companies that they replaced. (There’s a variety of studies on this, the most recent one I believe by a doctoral student at UCLA.) So certainly not perfect, but the old system (and every other system proposed) also “allowed” illegal discrimination, and in fact more of it. It certainly doesn’t argue against them being improvements.
Interestingly Uber does not have a plan to become profitable and has been spending billions of invested money to “grow” their business. Careful analysis shows that there is no path to profitability and competitors would have very low start up costs if there were. All of this disruption and the idiots can’t even see a future in which the company is profitable. Amazon eschewed profits for market share for years but had a plan to become profitable. Uber hasn’t one.