People’s Ride is a co-op ride-hailing company in Grand Rapids – Michigan: drivers own the service in common and collectively decide how to spend its profits (for example on deploying an app to go with its website); for-profit competitors like Uber take 30% commissions from their drivers and deliver them to investors – while People’s Ride spends all the revenue paying drivers and improving the service.
People’s Ride bootstrapped itself with the personal funds of founder Matthew Bair and with a small Gofundme campaign.
It was able to take advantage of special insurance packages created for Uber and Lyft drivers – though unlike those services it doesn’t extend insurance to drivers (drivers pay for their own – though they’re contemplating shifting this expense to the business).
Drivers earn 55% more than they would driving for Uber or Lyft.
I substitute teach in inner city schools.
When talking about People’s Ride I try to explain the business in a way that will relate to the students’ real-life experiences.
I try to explain what it would look like if Uber was organized in a non-capitalist way.
Control over profits.
I call this the ‘secret to infinite wealth’ which always grabs their attention.
Uber is a multi-billion dollar company.
Imagine what would happen if that money stayed with the drivers.
How would that much money help the workers – their family – friends and community?
This is a job where employees bring most of their own capital too: the car – insurance – customer service – driving – promotions and referrals and in our case developing the People’s Ride app software.
Internet transport firm Uber used controversial and complicated international tax structures to reduce its New Zealand tax bill to around that of an average Kiwi worker – records show.
Through a structure known as ‘Double Dutch’ accounting the online transport network channels revenue to subsidiaries in the Netherlands that hold earnings and minimise its worldwide tax bills.
According to financial accounts filed with the New Zealand Companies office Uber declared gross revenues of $1,061,018 in New Zealand in 2014 but paid just $9397 in income tax.
Someone on the average wage of $45,000 is taxed about $7800 through PAYE.
The New York Times’ Farhad Manjoo recently wrote an oddly lamenting piece about how ‘the Uber model it turns out doesn’t translate’.
Manjoo describes how so many of the ‘Uber-of-X’ companies that have sprung up as part of the so-called sharing economy have become just another way to deliver more expensively priced conveniences to those with enough money to pay.
Ironically many of these Ayn Rand-inspired startups have been kept alive by subsidies of the venture capital kind which for various reasons are starting to dry up.
Without that kind of ‘VC welfare’ these companies are having to raise their prices and are finding it increasingly difficult to retain enough customers at the higher price point.
Consequently some of these startups are faltering – others are outright failing.
Witness the recent collapse of SpoonRocket an on-demand pre-made meal delivery service.
Like Uber wanting to replace your car SpoonRocket wanted to get you out of your kitchen by trying to be cheaper and faster than cooking.
Its chefs mass-produced its limited menu of meals and cars equipped with warming cases delivered the goods – aiming for ‘sub-10 minute delivery of sub-$10 meals’.
But it didn’t work out as planned.
And once the VC welfare started backing away SpoonRocket could not maintain its low price point.
The same has been happening with other on-demand services such as the valet-parking app Luxe which has degraded to the point where Manjoo notes that ‘prices are rising – service is declining – business models are shifting and in some cases companies are closing down’.
Yet the telltale signs of the many problems with this heavily subsidized startup business model have been prevalent for quite some time for those who wanted to see.
In July 2014 media darling TaskRabbit which had been hailed as a revolutionary for the way it allowed vulnerable workers to auction themselves to the lowest bidders for short-term gigs underwent a major ‘pivot’.
That’s Silicon Valley-speak for acknowledging that its business model wasn’t working.
It was losing too much money and so it had to shake things up.
More than 1300 people have applied to be Uber drivers in Christchurch.
The rideshare company has yet to set a launch date for the Garden City – the third centre to get it after Auckland and Wellington.
Uber connects people who need a ride with a driver through a smartphone app. It allows everyday people to make money by driving others around in their own cars.
Uber – which operates in 58 countries – has more than 1000 drivers in Auckland and Wellington after launching in 2014
Its establishment in Christchurch will come after the Government’s review of small passenger services – the results of which are due later this year.
In May Uber representatives scouted for drivers at Christchurch’s Northlands Shopping Centre.
Uber New Zealand’s general manager Oscar Peppitt said the company had received more than 1300 applications to be a ‘driver partner’ in Christchurch in the past few months.