Transport innovation of the week: platform co-ops

There was quite a stir in London last week as the city’s transport authority announced that it was revoking Uber’s operating license. Due to its corporate responsibility issues, Transport for London (TfL) informed them that it was no longer welcome in the city and would have to cease operations.

I’m no fan of Uber, but that’s a pretty draconian move. The news broke with seven days before the license expired. The company has 40,000 drivers in London and they all got a week’s notice. Then there are 3.5 million Uber customers in London who are going to have to do without it. The decision was of course applauded by the black cab drivers, who are Uber’s direct competitors. There’s no doubt that black cabs have better ethics and tax practices, but they cost twice as much as Uber. I never used them when I lived in London. They were simply out of my price range. Uber has democratised taxi services for millions of Londoners, and it’s no surprise that the petition to reverse the decision passed 500,000 signatories in 24 hours.

We don’t know yet how the story of Uber in London will play out, but it’s a story that is being repeated in cities all over the world, in some cases with protests and even violence. Traditional taxi networks, often monopolies, are being challenged. Customers are siding with the cheaper and more convenient option, and government and transport authorities are struggling to know how to react.

The main problem here is an opaque corporation with little regard for employment right, safety or its tax responsibilities. And its long term plan is for self-driving cars anyway, which will ensure 100% profits for itself and its shareholders. Wouldn’t it be great if we could have Uber services without Uber?

Plenty of people are thinking that, and creating platform coops in response. These are ride hailing apps that are owned by the drivers or the customers, keeping costs low and sharing the benefits. When a passenger pays for an Uber ride, the company gets 25% of the fare as its fees. A platform coop can take a much smaller fee to support the app and marketing, so drivers get paid more for their work. Green Taxi Cooperative was formed on that basis by taxi drivers in Denver in 2014, and has a third of the city’s taxi business. Paris has AlphaTaxis, Bologna has Cotabo. There’s a growing number of them, most of them struggling for recognition against Uber and Lyft. So far, they are all locally organised. In future we might see a global brand emerge that can mount a more serious challenge.

A platform coop is an obvious solution for London too. In fact, TfL could have built it and undermined Uber with something better, rather than banning them. TfL is a big enough presence in London to market a homegrown and fairer ride sharing platform. The New Economics Foundation, perhaps in an appeal to the Mayor of London’s ego, has started referring to ‘Khan’s Cars‘ as an alternative to Uber. It would give Londoners the cheap taxis that they have come to depend on, and move with the times as people expert to organise their transport through an app. It would avoid the appearance of resisting progress, or or preserving old monopolies. All those drivers serving in the gig economy could keep their jobs, but with better pay and conditions, and the dignity of being employee-owners.

So come on London. Do not be overcome by Uber, but overcome Uber with a platform coop.