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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