A group of ATX Co Op Taxi driver/owners in Austin, Texas
UBER IS LIKE A JAMES BOND VILLAIN: IT PLANS TO TAKEOVER THE WORLD. The problem it has with that is that people keep getting in the way—like hundreds of taxi drivers in Austin, Texas.
Uber burst on the world in 2009 with a brand new business model, something that came to be called the “sharing economy.” Uber created a smartphone app that connected people who needed a ride somewhere with car owners who were ready to “share” their car with them and take them where they wanted to go for a fee.
Just like taxis only better, said Uber, because it offers people “a flexible new way to earn money”—without becoming full time taxi drivers. “Uberfication” was hailed as the way of future of work and doing business. Everybody wins. Not exactly.
Uber had no place for all those millions of workers who already were taxi drivers. The drivers fought back in many ways.
Some successfully pressed municipal governments to outlaw Uber completely. Drivers in Ontario and Quebec were part of a wave of class action court cases against the company. And some, like the drivers in Austin, Texas, turned inward to find the strength and smarts to plot their own course to the way of the future.
That little union that could
There are about 800 taxi drivers in Austin. In 2014 most of them were not union members. By October 2016 most of them were. A rank-and-file movement to challenge Uber had energized the drivers.
The drivers and their allies first convinced the city council to level the playing field. Uber drivers would be required to submit to the same fingerprinting and background checks as were all drivers. This regulation prompted Uber to abandon Austin completely.
The drivers weren’t done. Their next goal was to free themselves from the need to work for one of the three cab companies in Austin. Their plan was to start a driver-owned cab company and work for themselves. After months of advocacy, the city council gave them the permission to create ATX Coop Taxi, the city’s fourth cab company.
“This all really happened due to the drivers themselves becoming more active, more engaged, more organized, and really joining together and advocating for policy changes,” Mayor Kathie Tovo said.
“We worked with them to incorporate several of the ideas they suggested into our policies. There are a couple of provisions that addressed some of the needs from drivers who were really struggling financially to make ends meet.”
Co-op develops its own transportation network app
When it opened in October 2016, ATX Coop Taxi had raised over $425,000 in ownership shares from over 360 coop members. This makes it the third-largest worker cooperative in the country.
ATX Co-op Taxi is a true co-op: each member holds an equal stake in the enterprise. All decisions are made through a one member, one vote voting process.
A nine-person elected board is responsible for applying co-op policy and practices. Everyone involved with the co-op drives a cab. Because of that, said Hassan Aruri, a co-op member who is a former Yellow Cab driver, even field actions taken by leadership will be made for the benefit of the entire membership. What’s good for drivers is good for drivers.
The cooperative believes it can combine the stability of street-hail pickups with a commitment to Uber-style technology that more traditional cab companies now lack.
The ATX taxiapp is modeled much like your standard transport network company template. Should it ever fail the co-op can fall back on its full-time dispatch system, staffed with call-takers at an office just like any taxi franchise.
“This is the main reason why we were created,” said Nega Taddesse, a board member. “We don’t want to throw away the old traditional taxi service. But we will also try to be technologically advanced.”
“The other cab companies still see us as protesters,” he says. “They still don’t think we are their business competitor now. They don’t believe that it’s over. And we still have to fight them.”
“We’re not really a private company out there to suck people’s money that’s not our way,” said Aruri. “We’re out there for social justice.”
Are taxi co-ops the way of the future
Will taxi co-ops like the one in Austin and another in New York City become the best way to beat off business models like Uber? They just might.
After all the Union Cab of Madison Cooperative in Madison has been in business for 37 years. It maintains the largest fleet and customer base in the Wisconsin capital. Paul Bittorf, president of the co-op, says the UCMC’s been able to weather the Uber storm by creating equality throughout the company.
“If they can do something close to what we have, where our mechanics, dispatchers, billing office, where all those people are included as member-owners and have the same stake in operations they will have a real chance. That big of a democracy can be hard to run, but it’s a saving grace.
“When times get tough, you can go to the members and say, ‘Hey, we all know we’re not making so much money right now, so we’re going to cut back payroll for a little.’ When the recovery comes, everybody gets a bump. We’ve gone through our share of ups and downs, but we’re still here.”