A New Worker-Owned Cooperative Starts Competing With Uber and Lyft

The New York Times reports that for years, Uber and other ride-hailing companies "offered the promise of entrepreneurship to drivers" to drivers eager to set their own schedules. "But some drivers never received the control and independence they had expected." They struggled with the costs of vehicle maintenance, loans and insurance, and they questioned whether Uber and Lyft paid a fair wage. Legislative efforts to grant them employment benefits were thwarted.

Now, dissatisfied drivers and labor advocates are forming worker-owned cooperatives in an attempt to take back some of the money — and power — in the gig economy.

The Drivers Cooperative, which opened for business in New York this week, is the most recent attempt. The group, founded by a former Uber employee, a labor organizer and a black-car driver, began issuing ownership shares to drivers in early May and will start offering rides through its app on Sunday. The cooperative has recruited around 2,500 drivers so far and intends to take a smaller commission than Uber or Lyft and charge riders a lower fare.

It is an ambitious plan to challenge the ride-hailing giants, and it faces the same hurdles that tend to block other emerging players in the industry: Few have the technical prowess, the venture capital dollars or the supply of readily available drivers to subvert an established company like Uber. Still, drivers who joined the effort said even a small cooperative could make a big difference in their work, allowing them to earn more money and have a say in the way the company was run. The Drivers Cooperative said it planned to pay 10 percent above the wage minimums set by the city's Taxi and Limousine Commission, and return profits to drivers in the form of dividends.
One of the labor organizers who founded the Drivers Cooperative tells the Times that "I've never seen this hunger for change that exists with drivers."

Re:When I hear "worker-owned cooperative"...

[Kernel Kurtz]

Perhaps you are still obsessed by the USSR, but cooperatives are pretty common here in non-communist Canada. We have co-op run gas stations and grocery stores, that distribute their profits as dividends to their owners (the people who shop there) every year.

https://www.co-op.crs/ [co-op.crs]

We even have these things called credit unions, that are basically member owned banks.

https://en.wikipedia.org/wiki/... [wikipedia.org]

Your fear of reds under your bed notwithstanding, member owned businesses are actually pretty successful here in the west. In this case however, it is not customer owned but rather employee owned. Nothing wrong with that either, many businesses offer equity stakes to employees. In this case they offer them only to employees, there are no other shareholders sucking profit out of the system. If you don't like it, take your business elsewhere. Unlike the USSR your freedom still exists.

Here in America

[rsilvergun]

anything left of Ben Shapiro is a communist. Don't get me started on that filthy socialist Ayn Rand.

Re:

[roman_mir]

as long as things are done on voluntary basis there is no problem with any form of business structure. In capitalism anyone who wants, can go ahead and set things up in a way they see best and try and compete with the rest of the businesses of different types. Of course if there is some sort of government protection then the results will be skewed.

In a communist system, like the former USSR, you have no freedome to try and set up your own business, you would end up in a Gulag or shot.

Re:When I hear "worker-owned cooperative"...

[VeryFluffyBunny]

Yep, when you start looking, you'll be pretty surprised just how many substantially large worker-owned businesses there are in the USA, especially in the financial sector. Worker owned businesses also tend to have higher success rates (don't go bust in the first 5 years) & tend to weather economic downturns better. The part that "investors" don't like is that they tend to grow more slowly. They also tend to have enormous pension funds since there's no profits being gushed out to investors & shareholders.

Re:

[mi]

Worker owned businesses also tend to have higher success rates

Citations?

Re:When I hear "worker-owned cooperative"...

[VeryFluffyBunny]

Simply put, cooperatives keep profits within the company & aren't beholden to shareholders. Well, actually they are, the workers are the shareholders & so the profits either get re-invested to grow or go into their pension funds.

Burdín, Gabriel (2014). "Are Worker-Managed Firms More Likely to Fail Than Conventional Enterprises? Evidence from Uruguay". Industrial and Labor Relations Review. 67 (1)

Olsen, Erik (2013). "The relative survival of worker cooperatives and barriers to their creation". Advances in the Economic Analysis of Participatory and Labor-Managed Firms. 14: 83–107

Re:

[The Wily Coyote]

Apparently the copy-paste metaphor is so last century.

Re: When I hear "worker-owned cooperative"...

[fod_dzug]

How fucking lazy are you. You asked for references, he gave you the refs. The ball is in your camp if you want to learn.

Re:

[mi]

Ok, you made me look for these myself. Here it is:

Burdín, Gabriel (2014). "Are Worker-Managed Firms More Likely to Fail Than Conventional Enterprises? Evidence from Uruguay". [sagepub.com]

The only thing this publication finds better about worker-managed firms, is their average survival rate. There is not a word about their delivering better product or service. Nor about the workers being paid better — or about earning better pension funds.

The author acknowledges the "theoretical bias" against such enterprises

Re:

[HiThere]

I'm not at all sure of that...in fact I tend to believe otherwise. But there are certainly differences about exactly which freedoms are available.

Re:

[Kernel Kurtz]

Are they? Do you have citations?

Nope. But anecdotal experience is many of these entities have been around for a long time and don't appear to be suffering.

It does become wrong, when government extends preferential treatment to such establishments. Tax discounts, subsidies, exemptions from certain regulations, preferences in awarding government contracts — we've seen it happen, and it will continue to happen, because it helps governments (and the people in it) control populations.

Yup. Both right wing and left wing, Liberal and Conservative, Democrat and Republican governments do it. Nobody gets a pass on that point.

Not it if you outlaw the elsewhere. Which, in the case of ride-hailing, at least, is already happening.

Government does have a responsibility to set some minimum standards, for both employees and customers. This is not Somalia where anything goes. We can debate whether society is better or worse for those decisions, in fact we do, at election ti

Re: When I hear "worker-owned cooperative"...

[crobarcro]

John Lewis in the UK is one example

Re:

[mrclevesque]

"Though I will not argue, that Canadians have no freedoms ... you certainly have fewer, than Americans (still) do."

I will argue Canadians have at least an equal amount of freedoms, maybe not the same ones, but at the least equal in sum.

Re:

[The Wily Coyote]

I see this line of thinking all the time that the US is the free-est country in the world. Having lived in a bunch of western democracies, including the US, I am still trying to figure out in what sense it's true.

Re:

[Kevin108]

It may have been true a couple hundred years ago, but it's certainly not the case now. More than 35% of every dollar earned in the US is taken by force to fund government.

Re:

[phantomfive]

Perhaps you are still obsessed by the USSR, but cooperatives are pretty common here in non-communist Canada.

In the US, there are also a lot of employee owned corporations [wikipedia.org]. It's not a new organization model, and a great description of how to do it well is found in The Great Game of Business.

Re:

[Solandri]

Difference is the USSR cooperatives were government-owned, pretending to be worker-owned for marketing purposes. As long as you prohibit government control or favoritism, worker-owned companies work just fine alongside investor-owned companies. In fact I (fiscal conservative) daresay they work better since all the workers have an incentive to work harder, and to reform or get rid of lazy workers (unlike unions which have an incentive to protect them). The hardest-working people I see at small businesses are

Re:

[Type44Q]

Your fear of reds under your bed notwithstanding

And by "under the bed," what you meant was "fully in the limelight and heavily promoted by the [even] less honest, more devious half of the country's single-party political system."

I know some honest Canucks; you're not one of them.

Re:

[Kernel Kurtz]

What country are you talking about? I've lived through many Canadian governments both Liberal and Conservative. That is not single party, and I don't consider either of them particularly red as the term is used in this case. The current Liberal minority backed by the NDP is about as red as it gets here. I will admit that even our Conservatives are probably to the left of the Democrats in the US, but what Americans consider left wing is an anomaly compared to governments pretty much anywhere else in the

Re:

[JakeBurn]

We have electric cooperatives here in rural areas of the USA. Kind of hard for some or these idiots to cry communism since it's privately ran by the members. And my electric rates are definitely lower than what my family pays on the massive Duke Energy, or whatever they call themselves now, system.

Re:

[Impy the Impiuos Imp]

Ronald Reagan once gave an award to a bizarre co-op restaurant business model, a Vietnamese place, where, whenever you ate there, the dollars you spent bought shares, and then at the end of the year profits were distributed proportionally.

Re:

[The Wily Coyote]

Every single thing you mentioned above is true of non cooperatively run businesses. See all the corporate welfare given to oil companies, banks, etc.

Re:

[mi]

Every single thing you mentioned above is true of non cooperatively run businesses

Spoken without evidence, hence — by the standards of the last four years — falsely and, indeed, dishonestly.

Re:

[The Wily Coyote]

Tax advantages -- Oil Companies: https://www.investopedia.com/a... [investopedia.com]

Exceptions from regulations: Gun companies product liability rules, Section 230 for social media companies.

etc etc (this stuff isn't difficult to find online)

Re:When I hear "worker-owned cooperative"...

[hey!]

Your mind leaps to the USSR, but in fact there are plenty of US-based cooperatives currently in operation, like Land O Lakes, Publix, and King Arthur Flour. Coops are particularly common in engineering, with its highly-paid and highly-educated workforce, e.g., CDM Smith (civil) or ESA (environmental).

The most common type of cooperative is the farmer-owned agricultural cooperatives (Sunkist), but there are worker owned cooperatives (Bob's Red [!!!] Mill), small business cooperatives (Ace Hardware) and even consumer owned cooperatives (Recreational Equipment Incorporated).

These are all highly successful *free market enterprises*, they just have some alternative ownership scheme.

Re:

[Peter in Rain City]

That's funny. When I hear "worker-owned cooperative" I think of Mondragon, a federation of worker-owned coops in Spain's Basque Country — the world's largest such federation and Spain's seventh biggest "corporation." It was born in 1956 (under Franco and the Falangists!) and is going strong today. It seems like a more relevant reference point than some straw man dredged up from the Stalinist USSR.

Capture

[bill_mcgonigle]

Watch for NY and CA to classify them as employees of the coop and demand they be paid wages and benefits, no matter how it's structured.

The pandemic redefined work and the extant power structure is terrified of the [inevitable] gig economy.

This coop (or its successor) may wind up using Tor and blockchain payments to route around corrupt financial sanctions.

"Pssst - hey buddy - you wanna engage in mutually-beneficial trade?"

Re:Capture

[GameboyRMH]

Bwahaha it's so much fun to watch capitalist bootlickers squirm at things that will be good for literally everyone except the ownership class XD

"Oh noes, the power of my wealthy overlords is in danger, WEALTH DEFENSE LEAGUE ASSEMBLE!"

Re:

[mi]

things that will be good for literally everyone

As I already pointed out, neither the collective farms, nor the "factory-owned" factories were good for anyone. The workers suffered — indeed, they had to be coerced by police to keep working there — and the production yields of that slavery were so low, the country had to keep buying consumer staples abroad.

But, of course, the idiots and assholes, who use terms like "capitalist bootlickers" in earnest, would not believe any of this...

Re:

[The Wily Coyote]

Neah, they are worker-owned, you see? Which will make them exempt from any such requirements — indeed, they'll be subsidized by the local Democratic governments.

As compared to non-worker owned businesses which are subsidized by the Republican party (e.g. banks and oil companies).

Re:

[mi]

non-worker owned businesses which are subsidized by the Republican party (e.g. banks and oil companies).

I'm afraid, you got the concept of "subsidy" wrong. Political parties don't give out money — they receive it, and spend it.

Re:

[The Wily Coyote]

Pedantic. Republican governments ...

Re: Capture

[MysteriousPreacher]

The sooner you ditch the idea of politics as a team sport the better you'll be able to call for change. Business subsidies aren't the preserve if Republics. Both parties are enthusiastic about dolling out money to businesses. Neither party has any wish to shrink government - a necessary step to reducing the role of government in the economy.

Re:

[The Wily Coyote]

I don't think politics is a team sport. I was responding to someone who claimed that it was only Democrat governments will subsidize certain business. Please read things in context.

Re: Capture

[MysteriousPreacher]

Fair point. Sorry, I missed that.

Re:

[The Wily Coyote]

No problems, and I didn't mean to be rude with the "read things in context" comment. I was having a bad hair day.

Re: Capture

[e3m4n]

Doing that will fuck the driver. W-2?well you cant claim mileage. Thats a huge hit. Along with home office. 1099 will get you close to 20-30k in income deduction. I used to claim miles before the 2017 tax changes. Now I lose out in 22k miles a year as well as my home office. I used to get a tax refund. Now I end up paying almost half as much as was withheld while claiming married with zero deponents (in spite of two kids) CA probably just wants to fuck over the drivers and make them pay higher taxes.

Re:

[mamba-mamba]

If you were a worker owned rideshare cooperative, your car would probably be a depreciable asset, and you should be able to subtract gas, tires, all vehicle maintenance as an operating expense before any taxable profit. I am no tax expert. But I am guessing that making it a cooperative would have some benefits.

Not really an issue

[rsilvergun]

if it's just an independent co-op. As long as everyone sets their own hours, prices, picks their own tools, etc, etc.

The problem with Uber/Lift is they control everything (including hours, if you work too few they'll start cutting you off from profitable rides, and they do the same if you refuse unprofitable rides). In short, they function as an employer in every sense of the word.

Re:

[HiThere]

There's no real reason that the drivers not be considered employees as well as owners. But the degree of ownership (number of shares?) would need to be dynamically dependent on the amount of time worked.

Workers cooperatives are a quite reasonable approach, but they require significantly different organization than other approaches. And if different workers have significantly different degrees of commitment (say 40 hr/week vs. picking up an occasional ride) then the coop principle of "everyone gets exactly

Re:

[alvinrod]

It really isn't too hard to structure if the cooperative as an entity essentially doesn't try to generate any additional profit to distribute after that fact. They're far better off if they let everyone operate as their own independent contractor with their own hours, rates, etc. and letting the market determine what's a fair rate based on what customers are will to pay and drivers are willing to charge. The cooperative only needs to take enough of a cut to maintain the infrastructure and pay for other staf

Re:

[HiThere]

Won't work. You need *SOME* distribution of roles, and some of those roles will be non-driving. You'll need accountants, e.g., and at least one lawyer.

Re:

[MrL0G1C]

Why shouldn't they all get one vote? If half the drivers drive 25 hours a week and the other half driver 50 hours per week that doesn't turn the drivers doing 25 hours into half a human. The half that drive 25 hours should have a vote just the same.

If the half that driver only 25 hours choose the busier hours then that serves the customer better and it makes the quieter times less painful for the half that drive 50 hours.

If you sat in a union meeting and tried to suggest that part time workers only get half

Re:

[Kernel Kurtz]

Watch for NY and CA to classify them as employees of the coop and demand they be paid wages and benefits, no matter how it's structured.

Fortunately it is structured to pay them wages and benefits anyway so it should not be too much of a burden.

Uber will have their kneecaps broken

[Rick Schumann]

Because Uber must be run by organized crime, they certainly do business that way.

The gig economy screws workers

[marcle]

There must be a more humane way to offer independent self-scheduled employment. Let's hope this is a step in that direction!

Re:

[Solandri]

I can see that being the case for continuous work like programming or custodial services. But taxi service is literally composed of multiple short single jobs. It is a perfect match for gig work, with the driver free to give as few or as many rides as they want.

Uber and Lyft screw drivers by excessively inserting themselves between the rider and driver, collecting all the revenue and having complete control over how much of the money paid by the rider ends up going to the driver. The way it should be str

Re:

[Impy the Impiuos Imp]

I presume it's a fancier upscale limo service that one might take to the airport, as opposed to yellow taxies for the hoi polloi.

Re:Black-cars matter?

[spitzak]

This had better be a joke, but I am seriously worried that all attempts to estimate the intelligence of Slashdot posters are too high...

Re:

[demonlapin]

Uber used to have - may still have - a "black car" service. You get picked up in a luxury car. Coincidentally, they're all black, whether they're Mercedes, BMW, Lexus, or Acura. If you need to arrive in style, it fits the need.

Way to go New York

[PPH]

I remember back when Uber was just a gleam in a few people's eyes. Some cab companies proposed on-line cab hailing. The NYC Taxi and Limo Commission threw a fit. Had they been a bit more proactive, with the market leadership NYC has in the taxi biz, they could have bumped off Uber and defined the business to their liking years ago.

Will drivers have insurance?

[GeRM_007]

Many years ago, one of the challenges with the gig-car companies was insurance. The driver's individual insurance didn't want to pay out for business related claims/accidents when they were taking riders places. So then passengers were covered by Uber/Lyft's insurance during rides, and drivers' used their own insurance for the time between riders.

How will these co-op drivers be insured?
How will riders be protected/covered in the event of an terrible accident?
Is there screening and background checks of drivers?

Re: Will drivers have insurance?

[MysteriousPreacher]

Yeah, it'll be interesting to see how they address those issues. Another challenge is to ensure adequate supply, requiring oversupply. They won't be terribly popular if wait times are long and unpredictable.

To my knowledge neither Uber not Lyft have turned a profit on this business model. This new business may have to find a niche as opposed to operating as a taxi service in all but name.

Good for the drivers

[wyattstorch516]

What is the benefit to the riders for this as opposed to Uber/Lyft?

Re:

[misnohmer]

They get to share in ownership and company earnings. Oh wait, Uber earnings per share are negative! Well, unless the new co-op can figure out a way to make it profitable, maybe the company will let the drivers invest more money to keep it afloat. Saying "we pay our drivers more" is easy, finding money for it is hard.

Can we call "ownership shares" medallions?

[holophrastic]

For those younger than 40, let me describe circles to you. Circles are paths that start in one place, then move in a direction away from the origin. They continue to move away from their current point, repeatedly, until they wind up back at their initial origin.

1. taxis are too expensive to hire, and it's too expensive to be a taxi driver with regulations and laws and medallions and unions.

2. we'll do this as a free-for-all, anyone can be a taxi, anywhere, at any time, yay!

3. we need organization. let's