How About We Nationalize Uber?

January 1, 1970

3-minute read

The Quebec Liberal Party held its convention last month. It was meant to launch the second half of the Premier's term (only two years left before the next election!). While he was hoping for a new beginning by championing education, an entirely separate debate finally took up most of the attention. Are the provincial Liberals in favour of or against Uber?

The fight pitted, in one corner, the party's youth wing, promoting the sharing economy, and, in the other, Transportation minister Jacques Daoust, whose bill is aimed at regulating the operations of the carpooling company.

Many were surprised at the "courage" demonstrated by the young Liberals, who are usually busier lying low than doing anything else. However, nobody raised the inconsistencies of their reasoning. The young party activists were posing as great proponents of the sharing economy and of a new way of approaching economic life —filled with promise and potential, attuned to the ways of the rising generation—, yet they were at the same time defending an "old" corporation embracing brutal and predatory tactics.

Fictitious sharing

The problem with the young Liberals' position is that it compares apples and oranges. Defending the sharing economy is a good thing. Wanting for economic relations to make more room for collaboration and cooperation is an even better thing! But that's never the bottomline when dealing with capitalist corporations. By defending companies like Uber and Airbnb, and presenting them as incarnations of the new economy, the young Liberals are missing the point.

These corporations' business model raises questions, which are framed more and more in terms of asking whether they participate in the sharing economy. They should not be brushed aside. Both are mega-corporations. Uber alone is worth around $50 billion, and Airbnb is not very far behind, valued at $24 billion. (Airbnb is therefore the world's second largest hotel group, just behind Hilton.)

These two corporations do not facilitate sharing and collaboration: they interfere with sharing relationships and impose themselves as intermediaries. They are designed to ensure that the added value generated by sharing goes into their pockets, all while seriously bending regulations and paying little respect to taxation in the countries in which they operate. Once more, this is not collaboration —directly linking individuals to exchange services—, but predatory behaviour.

Why not organize the sharing collectively?

Instead of this private highjacking of collaboration, why not do things differently? Sure, this new economic trend is greatly facilitated by technological means. Rather than letting corporations take them over, we can locally develop apps that meet the needs of the various users of the platforms they provide.

Let's think about it for two seconds: what service does Uber provide? Close to nothing! A website, a mobile app, and the bare minimum of terms of administrative operations. The provincial government could very well take care of such simple services and put at every municipality's disposal an app to provide carpooling services in its own jurisdiction.

A number of advantages would follow on from "nationalizing" Uber. We could make sure taxes are levied appropriately. The rates charged to clients could be stable, predictable, and designed to prevent unfair competition against the rest of the taxi industry. It would even be easier to implement regulations regarding vehicle maintenance and driver training. For example, to enrol as a driver on the public app, one could need to demonstrate that certain minimum requirements are fulfilled. Furthermore, it would be possible to limit the use of this app to make it impossible for someone to turn into a full-time taxi driver.

In short, a government app could address a number of the legitimate criticisms directed at certain aspects of Uber, and what applies to carpooling also applies to accommodation.

In the end, such an initiative would fund itself by blocking the tax leakage caused by the current Far West predicament. It would be a winning solution for everyone: allowing for the rise of the sharing economy without weakening the state's tax revenue or creating situations of asymmetrical competition for existing economic sectors.

And if you recoil at the thought of having the state provide such services, the government could always delegate the production and management to worker cooperatives, certainly to the best available legal form to organize sharing and economic collaboration.

It's certainly an avenue that should be explored, but something tells me that it's not really what Premier Philippe Couillard had in mind for his project to study the sharing economy. Too bad…


Philippe Hurteau is a researcher with IRIS, a Montreal-based progressive think tank. 

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