Uber and Lyft Are Threatening to Expose Poor and Elderly to Predatory
Practices
Friday, 16 December 2016 00:00 By Kevin Cashman, Truthout | Report
An Uber driver drives on the Brooklyn Bridge in New York, on January 30,
2015. (Photo: Sam Hodgson / The New York Times)
Ride-hailing companies like Uber and Lyft have grown increasingly popular in
the last few years. During this time, both companies have faced numerous
challenges to their business models, including lawsuits involving passenger
safety and the misclassification of their drivers as independent
contractors, as well as accusations that both drivers and passengers
discriminate based on race and other factors.
Despite these problems, ride-hailing companies are being further enmeshed
with social life. Uber and Lyft are often preferred transportation partners
for events and businesses, and cities are even integrating the companies
into their transportation systems -- some via privatization. Services that
use ride-hailing companies for social purposes have also developed. My Ride
to Vote provided promo codes for no-cost Uber and Lyft rides to and from
polling places in the recent presidential election.
As this process happens, it's important to point out who is being left
behind: mainly, those who cannot use these services, or who can only use
them via intermediaries (which are sometimes predatory). For example, in the
United States, both Uber and Lyft generally require a smartphone and a
credit card to use the service. This leaves out people who don't have, or
cannot obtain, a smartphone and a credit card, as well as those who don't
want to use either for their transportation. (These services have a record
of their passengers' trips.) While the My Ride to Vote service was probably
well-intentioned, it likely didn't target people who actually needed to use
the services to cast their vote, i.e., poorer people who are the least
likely to vote. The problem? It used promo codes, which meant that
passengers needed a smartphone and an active Uber account tied to a credit
card to make use of the service. And as Helaine Olen points out at Slate, it
also made the companies involved some money.
People without smartphones and credit cards are not insignificant portions
of the population. According to the Pew Research Center, over a third of the
population did not own a smartphone in 2015; lower-income and older people
are the least likely to own one. (There is also a significant number of
people who own a smartphone but experience interruptions in service due to
data caps or financial constraints.) Similarly, 33.5 percent of households
did not have a credit card in 2015 based on a survey from the Federal
Deposit Insurance Corporation (FDIC). The FDIC also found that those
households that rely on bank credit only -- which is disproportionately
credit via credit cards -- tend to be more affluent and educated, and they
are more likely to be white or Asian. Those without credit cards --
households with no credit, or who use non-bank credit only -- are more
likely to be poor, less educated, and Black, Latino or categorized as of
"other" race/ethnicity. Those with disabilities or who have income that
varies from month to month are also overrepresented in these groups.
These data suggest that those less likely to be able to take an Uber because
they lack a smartphone and/or credit card tend to be poorer, older, less
educated, and African American or Latino. In the absence of regulation that
requires Uber and Lyft to accept cash or serve these demographics in other
ways, the void is being filled by other start-ups. On the surface, this
might seem like an unambiguously good thing. GoGoGrandparent, a new
start-up, allows the elderly to call a hotline to order an Uber. Uber itself
has begun experimenting by partnering with prepaid debit card companies in
other countries. If these options gain a foothold in the United States, the
poor and elderly would at least be able have ride hailing services as a
transportation option.
But they don't come without costs. GoGoGrandparent charges 19 cents per
minute of the ride -- on top of Uber's costs -- to serve as an intermediary.
Prepaid debit card companies make their money off of fees, which are
sometimes exploitative. RushCard, a popular prepaid debit card company in
the United States, has fees that can add significant costs to typical
monthly usage, for example. These extra fees, whether they be for a service
like GoGoGrandparent or for a payment option like prepaid debit cards, are
especially burdensome for users who are poor or on fixed incomes.
This seems to echo the concerns of potential users of the service, like
Mike, a retiree in Connecticut who uses taxis but has concerns about both
GoGoGrandparent and Uber. "I live in a neighborhood that Uber drivers don't
like to drive in, so I can't count on them to drive me to my job," he said.
"GoGoGrandparent wouldn't change that reality, nor would I be comfortable
paying a higher fare just because I don't have a smartphone. I have a
standing request for a cab to pick me up, and they're very reliable and
professional."
The emergence of services like GoGoGrandparent should also give pause for a
different reason. The service helps expand the ecosystem of services that
are aimed at passengers and built on the assumption that the predominant
ride-hailing business model is sustainable and desirable. Using this
assumption, Uber and Lyft are courting transit agencies, threatening
existing public, demand-responsive transport that often serves the elderly.
For example, Washington, D.C., is considering offering Uber and Lyft as an
alternative to its MetroAccess paratransit service, and it has recently
contracted with Uber to provide discounted service to and from Metro
stations.Many other cities are considering using ride-hailing services in
similar ways, and a growing number have already contracted with ride-hailing
companies. Public "Dial-A-Ride" services for seniors could easily follow the
same route, devolving into a government-supported private service, rather
than a public service operated by either the government or a private
contractor -- and they may include GoGoGrandparent as a costly intermediary.
Indeed, this argument is being legitimized by mainstream places like The
Brookings Institution, which published a curious report in March arguing
that cash-strapped transit agencies could find outsourcing to start-ups
appealing. While ignoring that traditional taxi services have complemented
public demand-responsive transport for years, the report made the case that
switching much of demand-responsive transport to companies like Uber and
Lyft would be beneficial for transit agencies. Puzzlingly, the report
acknowledges that ride-hailing companies face intractable problems,
including unknown but likely high costs per ride (ride-hailing companies are
often unwilling to release information about these costs). The Amalgamated
Transit Union (ATU), a union representing transit and allied workers,
published a scathing critique of this report, questioning if transit
agencies would actually save money at all using ride-hailing services, and
pointing out that agencies are tasked not with reducing costs but rather
with providing high quality, equitable service. Ride-hailing companies'
repeated failures to serve people with disabilities is a good indicator that
they are not a good fit for replacing public demand-responsive transport,
says the ATU.
This promotion of ride-hailing companies is especially troubling given that
services like Uber, and by extension GoGoGrandparent, have not yet proven
their long-term viability. A recent series in Naked Capitalism points out
the problems with Uber's valuation and claims of innovation, efficiency and
strength of its business model. In essence, Uber is heavily subsidizing its
operations with venture capital money (it is not profitable) and is counting
on obtaining market dominance and using anticompetitive practices to obtain
profitability -- a strategy that it has bolstered with extensive and
misleading public relations campaigns.
It's also important to note that ride-hailing services as
public-demand-responsive transport have all the downsides as using those
services generally. This includes things like increased traffic and traffic
collisions (Uber is being sued under distracted driving laws, for example)
and also safety concerns involving rape and assault. It's hard to compare
the relative safety of passengers using taxis versus those using
ride-hailing services using data as opposed to anecdotal evidence, but
drivers of traditional taxis are required to undergo extensive background
checks, whereas Uber and Lyft have resisted efforts to impose similar
requirements. This is all on top of the fact that cities should be moving
away from private vehicle use in general, because a reliance on cars makes
cities less desirable places to live and more inequitable.
As jurisdictions decide how to respond to the emergence of ride-hailing
companies, it should be clear that making vulnerable groups pay more for the
same service is not a desirable outcome. In absence of regulations that
require ride-hailing companies to serve the poor and elderly better,
governments should provide (or continue to provide) alternatives that are
more accessible to these groups.
Stories like this will always remain free to read at Truthout. But if you
can spare a small donation, please click here to ensure independent media
has a future!
Copyright, Truthout. May not be reprinted without permission.
KEVIN CASHMAN
Kevin Cashman lives in Washington, DC, and researches issues related to
domestic policy at the Center for Economic and Policy Research. Follow him
on Twitter: @kevinmcashman.
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Uber and Lyft Are Threatening to Expose Poor and Elderly to Predatory
Practices
Friday, 16 December 2016 00:00 By Kevin Cashman, Truthout | Report
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. An Uber driver drives on the Brooklyn Bridge in New York, on
January 30, 2015. (Photo: Sam Hodgson / The New York Times)
. Ride-hailing companies like Uber and Lyft have grown increasingly
popular in the last few years. During this time, both companies have faced
numerous challenges to their business models, including lawsuits involving
passenger safety and the misclassification of their drivers as independent
contractors, as well as accusations that both drivers and passengers
discriminate based on race and other factors.
Despite these problems, ride-hailing companies are being further enmeshed
with social life. Uber and Lyft are often preferred transportation partners
for events and businesses, and cities are even integrating the companies
into their transportation systems -- some via privatization. Services that
use ride-hailing companies for social purposes have also developed. My Ride
to Vote provided promo codes for no-cost Uber and Lyft rides to and from
polling places in the recent presidential election.
As this process happens, it's important to point out who is being left
behind: mainly, those who cannot use these services, or who can only use
them via intermediaries (which are sometimes predatory). For example, in the
United States, both Uber and Lyft generally require a smartphone and a
credit card to use the service. This leaves out people who don't have, or
cannot obtain, a smartphone and a credit card, as well as those who don't
want to use either for their transportation. (These services have a record
of their passengers' trips.) While the My Ride to Vote service was probably
well-intentioned, it likely didn't target people who actually needed to use
the services to cast their vote, i.e., poorer people who are the least
likely to vote. The problem? It used promo codes, which meant that
passengers needed a smartphone and an active Uber account tied to a credit
card to make use of the service. And as Helaine Olen points out at Slate, it
also made the companies involved some money.
People without smartphones and credit cards are not insignificant portions
of the population. According to the Pew Research Center, over a third of the
population did not own a smartphone in 2015; lower-income and older people
are the least likely to own one. (There is also a significant number of
people who own a smartphone but experience interruptions in service due to
data caps or financial constraints.) Similarly, 33.5 percent of households
did not have a credit card in 2015 based on a survey from the Federal
Deposit Insurance Corporation (FDIC). The FDIC also found that those
households that rely on bank credit only -- which is disproportionately
credit via credit cards -- tend to be more affluent and educated, and they
are more likely to be white or Asian. Those without credit cards --
households with no credit, or who use non-bank credit only -- are more
likely to be poor, less educated, and Black, Latino or categorized as of
"other" race/ethnicity. Those with disabilities or who have income that
varies from month to month are also overrepresented in these groups.
These data suggest that those less likely to be able to take an Uber because
they lack a smartphone and/or credit card tend to be poorer, older, less
educated, and African American or Latino. In the absence of regulation that
requires Uber and Lyft to accept cash or serve these demographics in other
ways, the void is being filled by other start-ups. On the surface, this
might seem like an unambiguously good thing. GoGoGrandparent, a new
start-up, allows the elderly to call a hotline to order an Uber. Uber itself
has begun experimenting by partnering with prepaid debit card companies in
other countries. If these options gain a foothold in the United States, the
poor and elderly would at least be able have ride hailing services as a
transportation option.
But they don't come without costs. GoGoGrandparent charges 19 cents per
minute of the ride -- on top of Uber's costs -- to serve as an intermediary.
Prepaid debit card companies make their money off of fees, which are
sometimes exploitative. RushCard, a popular prepaid debit card company in
the United States, has fees that can add significant costs to typical
monthly usage, for example. These extra fees, whether they be for a service
like GoGoGrandparent or for a payment option like prepaid debit cards, are
especially burdensome for users who are poor or on fixed incomes.
This seems to echo the concerns of potential users of the service, like
Mike, a retiree in Connecticut who uses taxis but has concerns about both
GoGoGrandparent and Uber. "I live in a neighborhood that Uber drivers don't
like to drive in, so I can't count on them to drive me to my job," he said.
"GoGoGrandparent wouldn't change that reality, nor would I be comfortable
paying a higher fare just because I don't have a smartphone. I have a
standing request for a cab to pick me up, and they're very reliable and
professional."
The emergence of services like GoGoGrandparent should also give pause for a
different reason. The service helps expand the ecosystem of services that
are aimed at passengers and built on the assumption that the predominant
ride-hailing business model is sustainable and desirable. Using this
assumption, Uber and Lyft are courting transit agencies, threatening
existing public, demand-responsive transport that often serves the elderly.
For example, Washington, D.C., is considering offering Uber and Lyft as an
alternative to its MetroAccess paratransit service, and it has recently
contracted with Uber to provide discounted service to and from Metro
stations.Many other cities are considering using ride-hailing services in
similar ways, and a growing number have already contracted with ride-hailing
companies. Public "Dial-A-Ride" services for seniors could easily follow the
same route, devolving into a government-supported private service, rather
than a public service operated by either the government or a private
contractor -- and they may include GoGoGrandparent as a costly intermediary.
Indeed, this argument is being legitimized by mainstream places like The
Brookings Institution, which published a curious report in March arguing
that cash-strapped transit agencies could find outsourcing to start-ups
appealing. While ignoring that traditional taxi services have complemented
public demand-responsive transport for years, the report made the case that
switching much of demand-responsive transport to companies like Uber and
Lyft would be beneficial for transit agencies. Puzzlingly, the report
acknowledges that ride-hailing companies face intractable problems,
including unknown but likely high costs per ride (ride-hailing companies are
often unwilling to release information about these costs). The Amalgamated
Transit Union (ATU), a union representing transit and allied workers,
published a scathing critique of this report, questioning if transit
agencies would actually save money at all using ride-hailing services, and
pointing out that agencies are tasked not with reducing costs but rather
with providing high quality, equitable service. Ride-hailing companies'
repeated failures to serve people with disabilities is a good indicator that
they are not a good fit for replacing public demand-responsive transport,
says the ATU.
This promotion of ride-hailing companies is especially troubling given that
services like Uber, and by extension GoGoGrandparent, have not yet proven
their long-term viability. A recent series in Naked Capitalism points out
the problems with Uber's valuation and claims of innovation, efficiency and
strength of its business model. In essence, Uber is heavily subsidizing its
operations with venture capital money (it is not profitable) and is counting
on obtaining market dominance and using anticompetitive practices to obtain
profitability -- a strategy that it has bolstered with extensive and
misleading public relations campaigns.
It's also important to note that ride-hailing services as
public-demand-responsive transport have all the downsides as using those
services generally. This includes things like increased traffic and traffic
collisions (Uber is being sued under distracted driving laws, for example)
and also safety concerns involving rape and assault. It's hard to compare
the relative safety of passengers using taxis versus those using
ride-hailing services using data as opposed to anecdotal evidence, but
drivers of traditional taxis are required to undergo extensive background
checks, whereas Uber and Lyft have resisted efforts to impose similar
requirements. This is all on top of the fact that cities should be moving
away from private vehicle use in general, because a reliance on cars makes
cities less desirable places to live and more inequitable.
As jurisdictions decide how to respond to the emergence of ride-hailing
companies, it should be clear that making vulnerable groups pay more for the
same service is not a desirable outcome. In absence of regulations that
require ride-hailing companies to serve the poor and elderly better,
governments should provide (or continue to provide) alternatives that are
more accessible to these groups.
Stories like this will always remain free to read at Truthout. But if you
can spare a small donation, please click here to ensure independent media
has a future!
Copyright, Truthout. May not be reprinted without permission.
Kevin Cashman
Kevin Cashman lives in Washington, DC, and researches issues related to
domestic policy at the Center for Economic and Policy Research. Follow him
on Twitter: @kevinmcashman.
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Credit Card Debt Lawsuits by Lenders Relying on Erroneous Documents,
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Show Comments
