How Uber conquered London | Sam Knight
The long read: To understand how the $60bn company is taking over the world, you need to stop thinking about cars
Every week in London, 30,000 people download Uber to their phones and order a car for the first time. The technology company, which is worth $60bn, calls this moment conversion. Uber has deployed its ride-hailing platform in 400 cities around the world since its launch in San Francisco on 31 May 2010, which means that it enters a new market every five days and eight hours. It sets great store on the first time you use its service, in the same way that Apple pays attention to your first encounter with one of their devices. With Uber, the feeling should be of plenty, and of assurance: there will always be a driver when you need one.
When you open the app, Ubers logo flaps briefly before disappearing to reveal the city streets around you, and the grey, yet promising shapes of vehicles nurdling nearby. The sense of abundance that this invokes can make you think that Uber has always been here, that its presence in your neighbourhood is somehow natural and ordained. But that is not the case. To take over a city, Uber flies in a small team, known as launchers and hires its first local employee, whose job it is to find drivers and recruit riders. In London, that was a young Scottish banker named Richard Howard.
Howard was 27 and had recently been made redundant by HSBC, where he sold credit default swaps, a form of derivative that became notorious during the financial crisis. He grew up in Glasgow, where his father sold musical instruments, and never felt entirely at home in the deferential, bonus-driven atmosphere of investment banking. When he lost his job in November 2011, Howard figured that tech must be the coming thing. He began to trawl technology news and, like a lot other people, was struck by reports of a fundraising round for a startup called Uber the following month. It wasnt just the money a valuation of $300m for a company that had been up and running for 17 months but the seriousness of the players involved: Jeff Bezos, the founder of Amazon; Menlo Ventures, one of Silicon Valleys oldest venture capital firms; Goldman Sachs.
On 7 December, Howard found Ubers website and sent them an email. I emailed whatever it was, help@uber, info@uber, and said, Hey, I would love to work with you guys. I live in London. Are you coming to London? he told me recently. By Christmas, Uber had replied. After a couple of Skype interviews, Howard travelled to Paris to meet the Uber team there at the time, Paris was the only city outside North America where the company was operating and in February 2012, Howard was hired. He filled in his contact information on a company-wide spreadsheet. He tried to work out whether he was Uber employee number 50, or 51.
Uber began as a luxury brand. Its tagline was Everyones Private Driver. The companys origin myth is that its two founders, serial entrepreneurs Garrett Camp and Travis Kalanick, emerged from a tech conference called Le Web in Paris in December 2008 and couldnt find a cab. In the age of smartphones and GPS, this seemed to them a ridiculous state of affairs. From the get-go, though, Ubers idea of a car and driver was something lavish and fun. Unlike its main rival in the US, Lyft, whose ride-sharing philosophy derived more from a hey-Im-going-that-way-anyway approach, Uber was built on selling bite-sized access to big black cars and Kalanicks memorable if slightly untranslatable to British ears wish to be a baller.
For Howard, in London, setting up Uber meant finding the right kind of cars. He worked his way through yell.com, ringing up high-end chauffeur companies and trying to persuade drivers to accept jobs from an app they had never heard of. (Uber likes to describe itself as a marketplace: for a commission, it connects drivers and passengers, sets the fee, and handles payment.) In late March, Kalanick, who by this point was Ubers CEO, flew to the UK and emailed his only employee in the country. Yo London, Im here, he said. The two men met in Moorgate and Kalanick outlined his plans for the city. He said, I want to get [Mercedes] S classes on the road for the same price as black cabs, Howard recalled.
London was the 11th city that Uber went into, but it was like no other taxi market that the company had attempted to disrupt. London had the scale and mass transit systems of New York, but it also had the medieval, twisting streetscape and complex regulations of other European capitals. It was already served by a formidable private transport market, with one of the worlds most recognisable taxi fleets the black cabs and a fragmented scene of some 3,000 licensed private hire operators. Just one of these, Addison Lee, had 4,500 cars and revenues of 90m a year. London even had ride-hailing apps, led by Hailo, which had already signed up 9,000 black cab drivers. Kalanick has described London as the Champions League of transportation and said that Uber spent two years plotting its approach to the city.
Howard rented a one-room office on the Kings Cross Road, next door to an Ethiopian church. Two launchers, from Seattle and Amsterdam, arrived. He put a sign on the wall that said #Hailno and tried not to think too much about the competition. We were worried, he told me. We were worried that Addison Lee would get smart, spend 1m which isnt a lot of money for them and make a really nice, seamless app that copied Ubers. But they never did.
Instead, Howard focused on what he was good at, which was getting sceptical drivers into the office, showing them how Uber worked and giving them a free iPhone. I am a salesman thats what I am, he told me. Howard went after Mercedes S class and BMW 7 series drivers, typically one-man operations, who might freelance for a number of small chauffeuring companies. He made them a special introductory offer: they would be paid 25 an hour to work on the Uber platform whether they got any jobs or not. We gave these guys a security that they didnt previously have, he said. Chauffeurs could sign up for as many or as few hours as they wanted, and they could log off if an existing client came calling. They earned money sitting in their cars. In a trade where drivers typically earn 50 an hour when they are working, but can go whole afternoons, days even, without a job, and have punishing running costs, Uber sounded almost too good to be true.
Driver No 1 was Darren Thomas. Before he joined Uber, most of his work came from Spearmint Rhino, the lap dancing club. Thomas had drifted back into chauffeuring after working for seven years as a salesman in the tiling industry. He signed up for as many hours as he could bear. I absolutely caned it, he told me. Soon he was earning 2,500 a week. On Ubers first day in London, in the middle of June 2012, Howard had around 50 drivers on the platform. They did only 30 trips in 24 hours, but there was a single, glorious moment when seven rides were under way simultaneously and Kalanick happened to log in from San Francisco. Travis was just blown away, said Howard. He was like, Guys, look at London! This is unbelievable! It was just kismet, I guess.
The idea was to get Uber up and running in London in time for the 2012 Olympics. Howards job was to get drivers on the road, to provide that feeling of plenty if someone should open the app. San Francisco never sent him download numbers, but he had an endless stream of maps: showing where people were looking for cars, including dreaded zeroes when nothing appeared on users screens. Many of Ubers first customers in London were American tourists who idly checked their phones to see if the service had spread. Howard spent his days on a Boris bike, nosing around the streets of Belgravia, trying to sign up snoozing chauffeurs, and his nights glued to Heaven the Uber-eye view of all the cars active in the city worrying about things going wrong. It was honestly a 24/7 job, he said. If there were 15 drivers on shift, and Howard needed 20, he would get on the case, chivvying chauffeurs onto the street. If a passenger lost their bag on the way to Boujis, Howards phone would ring at 3am. His wife hated it. The rest of his family nicknamed him Eileen, after the cab dispatcher on Coronation Street. It was stressful as fuck, he said. But I loved it.
Howard only caught occasional glimpses of larger plans in the works. Despite starting out with a niche product, Uber has always considered itself in Promethean terms. In 2011, when the company only had a few dozen employees, it spoke of filling a global transportation gap that had grown from the failure of car services around the world to properly exploit modern technology. On a pre-launch visit to London, Kalanick and the companys head of operations, Ryan Graves, spent a week riding black cabs, tinkering with Hailo, and considering Ubers future. One afternoon, Howard found himself in Kalanicks room at the Sanderson Hotel, in Covent Garden.
Graves was there too, along with a couple of Uber engineers over from San Francisco. Kalanick was thinking aloud, kicking around big ideas. Aged 35, and with a string of tech startups to his name, Kalanick had a bold, imposing demeanour. Kalanicks Twitter profile picture at the time showed the figure from the cover of Ayn Rands capitalist fantasia, The Fountainhead. That day, he was wondering about whether Uber had the potential to become a mass-market product. It would mean becoming less cool, but it would also involve taking aim at a global market worth hundreds of billions of dollars. He was thinking, Do we make Uber cheaper? Do we go for the jewel for taxis? Howard recalled.
No one thought it was a good idea. Howard said something about protecting Ubers luxury brand. Travis was like, Idontcare about the brand. If we dont cannibalise ourselves, someone else will cannibalise us. He asked everyone to leave.When the group returned, a few hours later, Kalanick seemed to have made up his mind. He said, Were going to doUber cheaper. That July, the company trialled a new budget service, UberX, in San Francisco. Then it took over the world.
In London, it remained all about the high end. Howard and his team (by September, there were three people in the Uber office, plus an intern) figured that early adopters would be from the tech scene, in Shoreditch and Old Street, but the app initially caught on in the nightclubs of the West End. On Friday and Saturday nights, the platform frequently ran at 100% capacity. Howard devised a geography test for new drivers so they could meet the demands of the Made in Chelsea set. Berkeley Square. Nobu. Soho House. The Dorchester. Uber laid on cars for parties and Howard gave away hundreds of free rides. By the autumn, he had around 100 drivers on his books and an allowable burn of 50,000 a week to recruit drivers to the platform. I was often told, Burn more, he told me. We never had a numbers target. It was always just more drivers, more drivers, more drivers.
For those signing up to work, Uber was like nothing they had experienced before. It wasnt just the money. Even in its embryonic phase, chauffeurs have told me, driving for Uber meant simply not encountering many of the standard irritants and daily corruptions that constitute life in Londons private hire industry the shadow-world of its heavily regulated black taxi trade. There was no tyrannical dispatcher, giving the plum jobs to relatives and arsekissers, just an algorithm matching the nearest car to the nearest rider. There was no cash: no pulling up late at night next to bank machines, no fussing around for change. And there was the rating system: Uber riders and drivers rate their respective trips out of 5. Drivers got feedback, and they also had a voice.
For once, everything felt transparent and straightforward. The app looked good, it worked, and Ubers early passengers were well-heeled and for the most part polite. It was surreal, said one driver who joined the platform in September 2012. It was something so fresh. Thomas, the first driver, told me that chasing jobs in the early days of Uber was a bit of a game in a way, a bit of fun. After six months, Uber began to replace the guaranteed hourly rate with pay by commission, but the money for drivers held up. Word and wild rumours spread fast about the new service. Three years later, two-thirds of Uber drivers in London have been referred by a friend.
Ruman Miah first heard about Uber that autumn. A stocky, thoughtful man, Miah had grown up in the East End. His father, a Bangladeshi immigrant, arrived in the UK in 1962. He was a Del Boy Asian version, he told me. On Sundays, Miahs father would bring his son second-hand computer parts to fix. Miah worked for the NHS, in IT, before being made redundant in May 2012. He already had a private hire licence, as a back-up plan, and became a minicab driver, somewhat reluctantly, that summer. Miah was unusual among his fellow drivers because he began to note down every job, every fare, and every one of his many and varied costs, on a set of spreadsheets that he kept on his phone: from the data plan on his mobile to the class-four national insurance that he paid now that he was self-employed, and the weekly, depreciating value of his Ford Galaxy. He set aside time on Sundays to stay on top of his data. Thats how I think, he said. When he worked for the NHS, Miah kept a diary of his lunch costs. I dont know if it is something my father installed in me, but I have to note it down. It is a must. If I dont, I feel anxious. I cant explain it.
A friend told Miah that if he could get hold of a Mercedes S class, a new company called Uber was paying drivers 50 an hour. He couldnt afford such an expensive car, so he let the idea go. In spring 2013, however, he encountered Uber again. He was between jobs at Heathrow, having a coffee at the Bath Road McDonalds a hangout for private hire drivers at the airport when someone came in, handing out leaflets. It was a young hipster, said Miah. Most of the drivers just ignored him.
But the hipster was bearing big news: UberX was coming to London. The launch of the new, cheaper service in San Francisco the previous summer had defied all expectations. Rather than simply competing with existing car services, there were signs that Ubers platform with its ability to match huge volumes of vehicles, riders, and overlapping journeys could create massive efficiencies, cheaper fares, and, potentially, a whole new customer base.
Christophe Lamy, who was hired from Goldman Sachs London technology division, had the job of bringing UberX to the capital. He studied the citys two, hitherto stratified classes of car service: expensive, but convenient black taxis and Addison Lees; and reasonably priced, unreliable minicabs. In London, UberX was designed to be as efficient as a black cab and as cheap as a minicab. Anyone with a private hire licence a 250 permit given out by Transport for London a relatively new saloon car and insurance, could apply to drive. Lamy sensed the power of the proposition immediately. On both sides we beat what the competition was doing, he told me. All of us were like, This is the choice you are going to go with. Four thousand drivers signed up for UberX in the first six months.
Miah and Lamy, the minicab driver and the former banker, exchanged emails in July 2013. Lamy wrote that a Toyota Priuswas the companys dream car for UberX. Miah was trying to make things work on the executive circuit with a Volvo S40 at the time. He was cautious. He was sceptical about UberXs low fares: at 1.75 per mile, they were half the 3.50 to 4 that his car companies were charging. On the other hand, the commission Uber was charging was lower: 20% v 50%. Miah crunched the numbers. He kept hearing good things. The Volvo got through a lot of diesel. In May 2014, after yet another friend had joined Uber, and he heard about a new 1-per-job bonus scheme the company was running, Miah put 2,500 down on a brand new, gunmetal grey Toyota Prius and joined the platform.
On the day that everything changed, Lamy was exhausted. It was Wednesday, 11 June 2014 a few weeks after Miah joined Uber. For months, there had been rising unease among black cab drivers towards UberX, and now they planned to hold their first demonstration against the company, as part of a series of synchronised taxi strikes across Europe.Lamy had worked through the last two nights to prepare for the disruption, and he spent the morning napping on a sofa in the office. During the afternoon, between 4,000 and 10,000 cabbies stopped work to protest against UberX, turning their cars sideways on Lambeth Bridge and bringing gridlock throughout Westminster, as far as Piccadilly Circus. Jo Bertram, a former McKinsey consultant who was now running Uber in London,gave her first interview to Sky News at 6.30am and 15 more after that. After two years trying to persuade journalists to write about Uber, now it was all anyone wanted to talk about. Uber downloads jumped by 850%.
The cab protest its crudeness, the inadvertent publicity it gave to Uber read like the classic, bungling behaviour of a doomed market incumbent. Until Uber came along, the business of private transport in London had held more or less the same shape for the last four centuries: a trade dominated by a skilled guild of coachmen, able to ply for hire on the streets, with a shadow industry of occasional jobbers and private chauffeurs, making a quiet living on the side.
After the first official licensing of hackney carriage drivers in 1838 and the formalisation, decades later, of the Knowledge, Londons black cab drivers ruled the roads more or less unchallenged. They offered a well-regulated, high-quality product, but they didnt adapt much either. In the 30 years between 1986 and 2015, during which Londons economy doubled in size and its population increased by almost 2 million people, the number of black cabs rose from 19,000 to 22,500.
In the process, they became some of the most expensive taxis in the world. We concentrated on the honeypot, Derek OReilly told me. OReilly started driving a taxi in 1995, and, until late last year, helped run Knowledge Point, a training school for cabbies not far from Kings Cross. Without enough cars to cover the city, and much of the fleet locked in worsening congestion in central London, where the average traffic speed has fallen from 12 to less than eight miles an hour since the 1980s, black cabs became vulnerable to competition. Even small-bore innovations that had been adopted by taxi drivers around the world such as GPS, or taking payment by card were taken up spottily or not at all by traditionalists who loved to lean across, pull down the window, ask Where to? and hare down to the Embankment through a maze of remembered turns. You perceived the way your marketplace was, was going to be like that for ever, said OReilly.
Since UberX came to London, it has actually been very difficult to objectively measure its impact on the black cab trade. The one thing I cant answer, and which I would love to be able to answer, is to what extent have they grown the market, versus to what extent have they taken work away from the traditional sectors, said Garrett Emmerson, who is in charge of surface transport at Transport for London. Since 2013, Emmerson pointed out, the number of taxis on the road has stayed steady, as has the number of those taking the Knowledge. (There were 892 new taxi drivers last year, compared with 760 in 2010.) But the view through the windscreen is different. Judging on the evidence of his own eyes, OReilly, like most black cab drivers, has come to believe that the threat of Uber is mortal. In 2015, he watched the number of people coming to his weekly introductory talk on the Knowledge drop from 60 to six. (At the end of the year, the school moved to a smaller premises around the corner). A 20-minute, two-mile trip in a black cab costs 14. An Uber will get you there for 8. I genuinely believe their aim is to wipe us out, OReilly told me, Starve black taxis into submission and then run riot with thatmarketplace.
For those who know their history, there are reasons to be fearful. Hiring someone to take you across town goes back a long way in London, but the past is notched with moments when one form of technology supplanted another. In the 17th century, it was the Thames watermen who got it in the neck. They had apprenticeships of seven years to learn the slide of every muddy current, and routes recorded in the Domesday Book.But bridge-building and the arrival of the horse and carriage a faddish continental import during the reign of Elizabeth I did for them. The caterpillar swarm of hirelings. They have undone my poor trade, whereof I am a member, wrote John Taylor, the watermens poet and leader, in a 1623 pamphlet titled The World Run on Wheels. Broken and dismayed, he retired to run a pub.
After a brief tussle with sedan chairs, horse-drawn hackney carriages ruled the streets for the best part of 300 years. They saw off the first cars, a small fleet of electric Hummingbird cabs, at the turn of the 20th century, but succumbed suddenly after that. Londons first petrol-driven taxi was licensed on 11 December 1903. Ten years later, on the outbreak of the first world war, there were 7,000. During the same period, Hansom cabs, small, swift horse-drawn two-wheelers that had been ubiquitous in the capital since the 1830s, virtually disappeared. By 1927, there were just 12 left in London, curios from a recently vanished past.
When I talked to black cab drivers or minicab operators about Uber, I noticed that they normally wanted to question whether its cars and drivers were any good. A cabbie will bend your ear about how GPS will never beat the Knowledge and how a Prius corners like a ship, compared with a London Taxi Company TX4. But in a way that is to confuse Uber with what has come before. What is novel about Uber as a personal transport company is that it does not actually care about the relative merits of cars, or boats, or horses, or sedan chairs, or even the people who steer them. The worlds largest taxi firm does not own a single vehicle, or employ a single driver. The product for Uber is movement itself, and deploying the necessary labour for that to happen.
When I spoke to Lamy about what was different about Uber, the conversation wasnt about diesel consumption or the quickest way to get to Waterloo, it was about liquidity. Liquidity used to be something you associated with the stock market, he explained. But now sharing networks such as Uber and Airbnb are making assets and labour available to consumers in ways that were simply not possible before. The way I see it, Uber brought a liquid market transaction system to transportation, he said. And once you had come up with this mechanism that could create liquidity in the market, it became inevitable.
Richard Howard left Uber before the launch of UberX. When we spoke, he turned briefly mournful about the demise of black cabs one day. Its sad, but its also part of progress, he said. Theyre going to be like artisans. Theyre going to be like people who make their own shoes.
Some time in the second half of 2015, the number of Uber drivers in London surpassed the number of black cab drivers, and now stands at around 25,000. An Uber trip starts every second in the capital, and as the company has become more dominant, it has turned more gracious to the competition. In February, Uber even invited taxi drivers to join its platform, and suspended any commission it would take for a year. In conversations with Uber executives, the word that they choose when talking about black cabs is heritage.
I recently paid two visits to Ubers present London headquarters in Aldgate Tower, an office block with rounded edges on the trendy, easterly border of the City. The company has around 100 staff in the UK now, and has spread to 15 cities, including Birmingham, Cardiff and Leicester. All visitors are asked to sign a non-disclosure agreement at reception. Inside, the offices had a spare, recently-moved-in feel. Behind a number of desks, silver 1 balloons were tethered to chairs, indicating various employees first Uber-versaries, and a whiteboard displayed a graph, curve and equation under the heading Cancellations.
In a boardroom, Tom Elvidge, Londons 34-year-old general manager and another Goldman Sachs alumnus, gave me a presentation on the companys global progress and many of the smart, intuitive features that make Uber such a pleasure to use. The real-time view of your driver approaching. An average waiting time in London of 172 seconds. The ability to estimate your fare, share your ETA with friends, and split the cost. Permanent records of every journey taken. The rating system. Elvidge put up a slide showing a steepening cluster of coloured lines each one indicating a separate city and explained how each new Uber market outperforms the last because of the pent-up demand among drivers and riders eager to join the service. (One reason Uber decides to move to a city is the number of people downloading and opening the app there.) Elvidge studied the graph for a moment. This is out of date, he said. It didnt show China, where Uber operates in 55 cities.
Later, Elvidge took me down to Ubers partner service centre (PSC), where it trains its drivers and looks after their concerns. The PSC was in an underpass 100 yards from the companys corporate offices, in a former wine bar. It had a jaunty, black-and-white check floor and a spiral staircase, no longer in use. In one corner, bathed in white light, applicants had their pictures taken for their ID. At the far end, a group of drivers sat waiting for appointments to discuss difficulties they were having with the platform. One had brought his sons, and the boys, in parkas, were larking about on the chairs. There were banners for deals on car financing and insurance Rent an Uber ready vehicle today, read one, from Cabmate and a sign showing the way to a prayer room. Very important, said Elvidge. A large number of Uber drivers in London are Muslim men. On our way into the centre, we were briefly detained by a tall prospective driver in shalwar kameez who went round twice in the revolving door and came out muttering, What is this place?
The physical separation of the PSC and Ubers corporate offices made manifest the gulf at the heart of the company, which is between those in charge of the network, and those who make their living driving on it. (Official documents refer to Uber drivers as customers.) Almost every Uber executive in London that I spoke to, past and present, used to work for a large consulting firm or bank. (Ubers head of communications in the UK is Alex Belardinelli, a former special adviser to Ed Balls.) For their part, the dozen or so drivers that I interviewed for this article, who provide the capital, insurance, and manpower for Ubers miraculous service were again, almost without exception from immigrant communities and had worked previously in corner shops, supermarkets, low-paid public sector jobs, or as minicab drivers. According to Uber, around a third of its drivers in London come from neighbourhoods with unemployment rates of more than 10%.
And to a large extent, during these manic years of growth, many of them dont seem to care about the divide that exists between Ubers executives and its labourers. On a recent bright morning, I went to Woodford, in east London, to meet Ben Tino, a 24-year-old driver who joined the platform in February last year. Tino is from black cab stock. His uncle drives a taxi. He rode a scooter, studying his runs for more than a year the Knowledge typically takes three before signing up to drive for Uber. I asked him why. It might sound funny, he told me, but it was really, really cold. He was knocked off his moped three times. Since then, Tino has driven more than 2,500 trips for Uber with a rating of 4.9 in a Citroen C4 Grand Picasso.
To me, Tino came across as the personification of a 21st-century, networked driver. He liked everything about Uber, from the platforms hints (people take more Ubers on payday Fridays), to its capricious surges (when demand swamps supply, and prices can double, even triple for drivers), to its element of surprise. Drivers do not know where they are goinguntil the passenger is in the car, and they swipe the screen. Its like being in the bookies, said Tino. It is very, very addictive. He was reassured by the sense that his trips were constantly monitored. When someone got into his car recently and poured beer all over the floor, Tino didnt say anything. He just took pictures of the mess and sent them to Uber, which charged the passenger for the cleaning bill. For me, what you put in is what you take out, he said. It drives you. It makes you a better person in a way.
In Southall, I spent an afternoon with Hassan Mirza, a former maths teacher from Pakistan who moved to the UK in 2005. Mirza studied for a degree in computer science, but couldnt find a job in IT. He spent five years working as a security guard in shopping centres in Southall and Hounslow before a friend, who worked in Primark, signed up for Uber and showed him a payslip for 963. I said, Is this your monthly? And he said, Are you joking, man? Its my weekly. Mirza applied for his private hire licence the same day, and joined Uber in October last year. It gives me a lot of happiness, he said. Any time you feel like working, you go out. Youre not feeling well, you go home and sleep. Obviously, you get life once and you want to live like that. You are the boss.
We pulled up behind the Iceland where Mirza used to work. A broad, extrovert man, Mirza makes YouTube videos for other Uber drivers, in which he relives such escapades as Low Rated Rude Guy: Who are you giving orders to? Who are you commanding? Youre talking to Hassan, mate. Lower your tone. With his degree in computer science, he delights in the sheer aptitude of the system. It is so clever, he said, whoever built it is genius. After years on his feet, feeling overqualified and underpaid as a security guard, Mirza was proud to share in Ubers prestige and its disruptive power. Iam a partner of a big company who has changed the game, he told me. Mirza wanted to know if I had heard about a new word, uberising, which was due to enter the dictionary soon. Like any company, if it blows the market all of a sudden? he said. It makes me feel good to be part of a company that uberises.
Both Tino and Mirza were adamant that their lives had improved since they started driving for Uber. The only times our conversations stumbled were when it came to the nitty-gritty of how much they earned, and the precise nature of their relationship to the company. Tino told me that he typically works between 50 and 60 hours a week for Uber, earning 800. Owning his car outright, his costs came to around 160 a week. When I suggested that this made for an hourly wage of between 10 and 12 an hour, Tino shook his head. Nah, its more than that, he said, and told me he earned 16 an hour. (According to Uber, average driver pay is 16 an hour.) When Mirza set out his projected earnings for the year, he forgot to deduct the cost of his private hire insurance, which all drivers must have and which often comes to around 4,000. Ultimately, he wasnt sure whether Uber worked for him, or if he worked for Uber. To be honest with you, its a difficult question, he said. I am my own boss but if my rating goes down I am fired. So technically they are the bosses. Mirza paused. But I dont think like that.
These were the kinds of awkward details that began to prey on Ruman Miahs mind about six months after he starteddriving for UberX in the spring of 2014. Accustomed to noting down his fares and costs, he was pleased, at first, by how much he was able to clear on the Uber platform. With his outgoings figured out at 371 per week before tax (including everything from three car washes per week, two MOTs per year, and the wear and tear on his tyres), Miah was still able to take home more than 800 weekly, in part because of a 99 per week bonus scheme that Uber was running to entice new drivers.
When I joined, I loved Uber, Miah told me. There is no humans. For me that was a big thing, a humongous thing. By the time he signed up for Uber, Miah had been a private driver in London for almost two years. He knew his back routes. He once made it from Walthamstow to Heathrow Airport during the morning rush hour in 54 minutes. He had a rating of 4.9.
Things began to change towards the end of the year. Miah installed a hidden camera in his car after a run-in with a passenger who was drunk and became angry after she thought he was taking her the wrong way. Miah had heard from other drivers that Uber tends to side with riders in disputes. When the woman kickedhis car door and damaged it, he didnt report her. He began to perceive the rating system not as a mechanism of mutual feedback, but of unequal power. A 1 star rating for a passenger barely means anything (you can find your Uber rating within the help section of the app) but it can have lasting consequences for a driver. Three weeks with a 4.5 rating in London means you are in danger of being called in by Uber for what the company calls a quality session. Oh my god, the star rating, Miah said. It is constantly in your head, and it hits you: am I going to get rated low? Am I going to get a complaint against me? He saw other drivers giving out water, sweets, and asking for five-star ratings and decided it was beneath his dignity.
On his days off, Miah began to read more about the company he had signed up for, and its impact on the cities where it has spread. Since expanding rapidly overseas in 2012, Uber has been accused of breaching regulations in France, Belgium, the Netherlands, Germany, Canada, Australia, New Zealand and Brazil. In the US, Uber faced 50 federal lawsuits alone in 2015, in cases that tested the companys liability for assaults by its drivers, deceptive pricing and alleged discrimination against disabled people. Last week, Uber settled for up to $100m two major lawsuits that could have forced the company to recognise drivers as employees. On top of its legal troubles, Miah observed that Uber also seemed to follow a similar commercial playbook in every city that it entered: at a certain point, the company would flood the market with drivers, and then begin to cut prices.
In London, the number of private hire vehicles jumped sharply up 13,000, or 25% in the two years following the launch of UberX. The first price cut took place in August 2014.A few weeks later, on a visit to the capital, Travis Kalanick announced that he wanted 42,000 drivers in London, six times as many as were on the road at the time. (Uber denies this is an official goal.) In such a crowded marketplace, and with prices falling all the time, Miah did not see how his sums could continue to make sense. That December, his weekly takings from Uber fell to around 800 430 after his costs or just over 7 an hour. Miah is well versed in Ubers corporate sayings. All our innovation is pointed at lowering prices not raising them, he said to me at one point, as muchin wonder as in frustration. All this innovation. What are you innovating?
Ubers transformation of the global taxi industry rests on a theorem. It is that by adding huge volumes of riders and drivers to a given market liquidity taxis can become cheaper and drivers can earn more at the same time. To understand how this can be so, you need to stop thinking about drivers being paid per journey, and instead consider how many more trips they are able to make as part of an efficient network. A typical taxi spends between one-third and half of its shift idle. Place that vehicle on a ride-hailing platform, though in a buoyant, busy market with the smartest vehicle-dispatching algorithms known to man and that dead time will rapidly diminish, meaning it can pick up more jobs.
In three years, Uber drivers in New York have seen their idle time on the platform almost halve: from 36 minutes per hour, to 20. As that figure shrinks further, and cars and drivers are used more and more intensively and drivers are therefore earning almost constantly Uber will be able to cut fares lower than you thought they could possibly go. The endgame that Uber envisages is what it calls the Perpetual Trip: drivers on a never-ending chain of pick-ups and drop-offs.
