In part 2 of his analysis (SEE PART ONE HERE), Jeremy Mohler continues to examine the culture of Uber. This time, he looks at the history of capitalism and and wage labor in 20th century America, showing us how the market has made it possible for companies like Uber to flourish.
To really appreciate Uber as a collision of wage labor, technology, and the state, we must recognize that beneath the media spectacle sits a wad of venture capital. Once jurisdictions begin to regulate transportation network companies in a predictable way, Uber will be able to scale up their business with little increase in operating costs. This is in part because drivers provide most of the fixed capital and maintenance. As ‘independent contractors,’ drivers use their own cars and handle their own benefits and taxes in exchange for the Uber name and a percentage of each fare. This is what has investors swooning, and why Uber wants to be just a technology company, rather than a regular old company that pays workers to provide a service. They flaunt the app and a reliable flow of replaceable drivers to show investors that labor and operating costs won’t rise in correlation with scale.
But Uber’s contracted labor is subject to the same old capitalist calculus: owners decrease how much variable capital they spend (i.e., the cost of human labor) relative to revenue by either extending the workday or increasing worker productivity. This is Marx’s basic and profound lesson: there’s always a difference between what a worker agrees to work for ahead of time (e.g., $15/hour or $50,000/year or $1.20/mile) and the actual value realized by the business owner in selling the worker’s work. This difference is what makes capitalism churn. This little bit extra that owners collect through the wage relationship like a strainer is what, for some, being human is all about: being creative; making art; freedom. Despite that Uber pays out by the mile, their expropriation of the work of drivers follows this logic of capitalist wage labor.
Through technology, Uber collapses traditional mechanisms of workdays and wages together into a single transaction, paying a percentage on a per-ride basis. The quality and intensity of driving, as Marx would put it, are controlled by this very form of payment, thus management becomes superfluous. In other words, when drivers have the app on, the market tells them when to work. Uber takes it further, disciplining drivers against the grindstone of the market by using ratings from riders as supervision. So all that value the company is storing up for investors comes from when the rider is in the car, and, no surprise, when the driver is working. If we set aside the cool app—which is free to download—and the clever contractual labor arrangement, Uber is merely a fresh take on a taxi company that employs drivers. Riffing at a conference, Uber’s CEO admitted that the market price for a ride has everything to do with the driver, “The reason Uber could be expensive is because you’re not just paying for the car—you’re paying for the other dude in the car. When there’s no other dude in the car, the cost of taking an Uber anywhere becomes cheaper than owning a vehicle.”
Since drivers are so significant to Uber’s value creation, the company has to maintain exact control over the ride. This control is afforded to them by technologies they’ve aligned together, and the combination of remote monitoring and crowdsourced feedback to discipline their labor is Uber’s real innovation. Uber didn’t invent GPS, nor smartphones, and they certainly didn’t build the roads they make their money on. They combined existing technologies to control a transaction from a distance with low labor costs relative to other transportation.
But in his vision of dudeless cars, Uber’s CEO was only expressing his inner John Locke, who, from the cockpit of the Enlightenment, overlooked Native Americans when he saw the land that would become the U.S. as a “wild Common of Nature”.
If all you have is a hammer everything looks like a nail; to capital, everything looks like a market. In Locke’s liberalism, market freedom prevailed. In neoliberalism, the market has been reinstated as the social force to organize society. Since the 1970s, the social programs and Keynesian economic policy that guided American government after the Great Depression have lost political legitimacy to markets. But during the run of social democracy, roughly from 1933 to 1973, a largely white male labor movement alongside powerful anti-war, economic, and social movements countervailed the dominance of capital that had led to crisis. A broad consensus formed that government should be the space where class, racial, and other antagonisms were to be managed and ironed out.
The New Deal state oriented itself towards a particular labor relationship—wage labor—that it for various historical reasons considered deserving of protections from the market’s volatility through a minimum wage, overtime pay, etc. Welfare programs in an unprecedented way shielded vulnerable parts of the working class from capitalism’s violence. As Daniel Zamora puts it, institutions like social security aim to protect the individual from the laws of the market. It became ‘common sense’ that office and factory workers should work eight hours a day to allow for leisure and consumption; that women should have the right to control their own bodies; that black lives mattered enough (but not much more than) to desegregate schools and water fountains. But the potent but mostly unconscious alliance between the working class and social movements—i.e., ‘civil society’—all for the most part backed by a supportive state, could not last.
From a peak approaching 35% of the nonagricultural workforce in the mid-1950s, unionization plummeted from the late 1970s onward . Under Reagan, the balance of power between capital and labor unhinged: the marginal tax rate on the highest personal incomes was cut from 70% to 34%, and corporate tax income rates were also slashed . The Golden Age of capitalism that, because it was balanced by a social democratic state, produced both macroeconomic growth and rising wages—albeit mostly for white men—was over. Between 1949-1973, the real average hourly earnings (i.e., wages and benefits) of U.S. workers increased at an average of over 2% per year . From 1973- 2011, that figure rose just 10.7% total .
The neoliberal period of capitalism, which even after the crisis of 2007-2008 we remain in today, is the reappearance of economic liberalism but in a new political and global context. And, without consensus about what the government should do—without mass power on the left—the shape of work is bending under the pressure. In November 2014, research performed by a union representing freelancers found that, based on a limited survey, 34% of the U.S. workforce had “engaged in supplemental, temporary, or project- or contract-based work” in the past year. A recent report from the National Employment Law Project concluded that the number of U.S. workers in temporary help jobs has reached an all-time high. These trends have been tolerated (praised, even!) because the neoliberal rhetoric conflates capital’s market freedom with the freedom of workers—that of being able to sell one’s labor as a commodity—resulting in the absurd idea that if there’s a society at all it’s just a loose collection of individuals in competition. In this vision, there are no owners or workers, only entrepreneurs, and freedom should be distributed by the market. The invisible hand has become a simulacrum, an image that has replaced a reality that was never there.
As we saw, technology allows Uber to control drivers from afar. But, amongst the neoliberal vanguard, they’ve used independent contracts to establish precise and precarious labor relationships, shifting costs associated with wage-labor employment like benefits and accounting to drivers. Thus, Uber is piecework happening outside the radar employed by social democracy to reconcile the antagonism at the heart capitalism’s wage-labor relationship.
As a capitalist firm, Uber will continue to be pressured by markets to lower its labor costs to absorb more profit out of each ride. Thus, absent driverless cars or countervailing driver protections—either social democratic programs like a guaranteed basic income or stronger state-backed rights to collectively bargain—the share of the app’s success that flows to drivers should continue to decrease. If this does come to bear, we’ll need either a U-turn towards social democracy, or the emergence of a rival transportation model that substitutes democratic management for Uber’s hierarchical control.
The rival could be a democratically organized cooperative of driver-owners sharing equity, collectively electing management, and voting on crucial decisions. A rider could hail via their smartphone, but in place of a contractor—who may have just started the week before and could be fired the next—could be someone who owns part of the ride-sharing company. The entire fare—not just 75-80%, which Uber pays out to drivers, for now—could be equally distributed as profit across driver-owners. And without the margin needed to pay executives and investors, fares could be affordable. Driver-owners who would have an interest in all other driver-owners providing good service could pay themselves well enough to live healthy, stable lives. To counterpunch neoliberalism, local governments could contract with ride-sharing cooperatives to provide public car transportation alongside existing trains and buses.
Mike Konczal and Bryce Covert have argued that socializing Uber and other ‘sharing-economy’ services could be easier than democratizing other industries: “Almost all of the actual capital is already owned by the workers, in the form of cars that they pay for and maintain themselves. And these workers labor individually, doing the same tasks, so there’s no need for a management class to control their daily operations. The capital owners maintain the phone app, but app technology isn’t the major cost, and it’s getting cheaper and easier by the day.”
If we’re dreaming up utopias, why not one that combines convenient transportation with direct democracy?
 Richard Barbrook and Andy Cameron “The California Ideology,” 1996, http://www.imaginaryfutures.net/2007/04/17/the-californian-ideology-2, page accessed 2/23/2015.
 This point is borrowed from Lily Irani’s work on Amazon’s Mechanical Turk in “The cultural work of microwork,” published 11/21/2013 in New Media & Society.
 Karl Marx: Capital Volume 1 (London: Penguin, 1976), 695.
 John Locke: Second Treatise of Government, 1689, II.48.
 This is an estimated figure since the Bureau of Labor Statistics (BLS) only began keeping union density statistics in 1983. Alejandro Reuss: “That ’70s Crisis,” Dollars & Sense, 11/09/2009, http://www.dollarsandsense.org/archives/2009/1109reuss.html/, page accessed 2/23/2015.
 Lawrence Mishel: “Unions, inequality, and faltering middle-class wages,” Economic Policy Institute, 9/29/2012, http://www.epi.org/publication/ib342-unions-inequality-faltering-middle-class/, page accessed 2/23/2015.
Jeremy Mohler is a writer and student in Georgetown University’s Communication, Culture & Technology (CCT) program, studying the political economy of digital and cultural production. His writing, along with an ongoing blog, is accessible at www.futuredebris.com.