Uber has pulled off a magnificent trick. It's a taxi company that's actually a technology company, its drivers are actually independent contractors, and its tightly-controlled algorithmic workforce management system is actually the freewheeling high-tech lifestyle of tomorrow.
It's because of all these actually's that Uber and other companies in the so-called "sharing economy" have been able to slip past regulations applied to more established industries. According to Ryan Calo from the University of Washington's School of Law and Alex Rosenblat from the Data & Society research institute, in this under-regulated environment, their practices have the potential to become predatory, and may already be.
But we can't know for sure, these researchers say, because Uber keeps its inner workings a secret. In a recent paper, Calo and Rosenblat argue that it's time for federal regulators to seriously crack down by exercising their legal authority to get Uber to share its algorithms and practices, opening up the black box.
Calo is a prominent legal scholar on all things technology-related, and Rosenblat is a technology ethnographer who has spent significant time researching what goes on under Uber's digital hood. For example, in 2015 her work revealed that Uber uses "phantom cars" in its passenger app to fool people into thinking a ride is closer than it really is.
In their new paper, the pair lay out how Uber in particular exploits an asymmetry of information to hold power over drivers and passengers. One example is the opacity of surge pricing. The paper notes that Uber monitors your phone battery, and some have wondered if surge pricing goes up when your phone battery is low. Uber has denied that they leverage such information in this way.
As another example of surge pricing's sketchiness, a 2015 study by computer scientists from Northeastern University in Boston found that prices were different for individuals situated in the same surge pricing region. Uber blamed this on a bug.
"Price discrimination tries to get the people who will pay $8 for a ride, to pay $8," Calo said in an interview. "That's fine, but Uber will use what they know about you to make you pay more, and that's manipulative."
Motherboard reached out to Uber for comment but didn't receive a response by deadline.
"It becomes problematic when you start trading on people's vulnerabilities," Calo continued. "There comes a point where it becomes predatory, and we think it's up to regulators to set that point."
Uber also leverages an immense amount of data and a good deal of secrecy to manipulate drivers, Rosenblat argued.
"Uber bills drivers as entrepreneurs and [claims] that the company offers jobs to anyone who wants one," Rosenblat said in an interview. "But when drivers are on board with the system, their choices are constrained significantly."
For example, Rosenblat said, the Uber app doesn't let drivers see where their customers want to go until they've picked them up, taking away any ability to be selective with their fares. This isn't necessarily a bad thing, but it's clear how Uber is having its cake and eating it too with its "independence" rhetoric. If you really were your own boss on Uber's platform, you could do what you wanted.
"There comes a point where it becomes predatory, and we think it's up to regulators to set that point"
"Technology companies have managed to operate in a Wild West by being in an under-regulated ecosystem even when their practices mirror those in heavily regulated industries, and Uber is a prime example," Rosenblat said. By positioning itself primarily as a tech company—and not as a cab service—it has largely managed to avoid the strict regulations associated with the latter, she argued.
Uber does work for those drivers who extol the virtues of easy money they earn through the app. But there are many others for whom the promise of Uber translates into sleeping in a leased car and dashing off whenever their phone pings.
So, what's to be done? For Calo and Rosenblat, it's simple: Federal regulators should force Uber to show them how the platform and its algorithms work in detail. (It's worth noting that Uber has a history of steamrolling city-level attempts to regulate it thanks to a combination of intense lobbying efforts and fiery rhetoric.)
"The Federal Trade Commission already has the power to ask pointed questions to Uber," Calo said. "It doesn't have to throw its hands up and say it's a black box. They can get in there." The FTC has intervened with Uber before, and most recently the company settled with the commission for $20 million for exaggerating how much drivers make.
Rosenblat agreed. "One response could just be to regulate technology companies a little more stringently," she said.
Another option would be to incentivize researchers to look into Uber's practices without fear of legal repercussion. (After all, it was researchers who discovered that Volkswagen was gaming emissions tests on some vehicles.) For example, Calo said, the government could legislate to ensure Uber doesn't use its now-infamous "greyball" tool, which it deployed to avoid law enforcement, to target researchers.
Customers' options are more limited. "You want to know what consumers can do?" Calo said. "They can complain to the FTC, and to their state's Attorney General, and they can get angry."
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from It’s Time to Force Uber to Tell the Government How It Works