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Austin inadvertently promotes open-source ride-sharing

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Austin voters, in a referendum last month, rejected a measure to overturn local regulations of so-called “ride-sharing” services. Although the main backing for the regulations was the legacy taxicab monopolies (which resented having to compete with even proprietary monopolies like Uber and Lyft), the result of leaving them in place has been to promote the emergence of a business model that undermines both the medallion taxi monopoly and proprietary “ride-sharing” monopolies. Jerome Tuccille describes this unanticipated outcome in an article at Reason (“After Winning Regulatory Battle Against Ride-Sharing Firms, Austin Turns to Black Market and Deregulation,” May 31).

The phony corporate “sharing economy” is not a sharing economy at all, but a walled garden economy in which corporations use proprietary apps to interpose themselves between drivers and riders, hosts and guests, etc., and extract a surplus for allowing them to connect with each other. A lot of people in the peer-to-peer and cooperative movements have argued that the proper response to companies like Uber and Lyft is not to restore the medallion cab monopolies and the local regulatory cartels they depend on, but to take competition one step further and destroy the legal monopolies the business model of the corporate “ride-sharing” services depends on.

The idea is to undermine the monopolies of companies like Uber, Lyft, Airbnb and the like with a genuinely cooperative, horizontal and P2P model directly controlled by the users themselves, and cut out the corporate middleman altogether. Advocates for this model have coined the term “Platform Cooperativism” for it (if you search the #PlatformCooperativism hashtag on Twitter, you’ll find links to a lot of great articles on it).

You can even take it a step further and attack Uber, Lyft and their ilk from within by jailbreaking their apps or subverting their workforces. From what I hear it’s fairly common for Uber and Lyft drivers, fed up with the exploitative nature of their relationship to the company, to quietly pass their personal business card along to trusted customers and make future private arrangements that cut the company out of the deal. Of course that no doubt violates all kinds of “non-competition clauses,” but as far as I’m concerned Uber and Lyft can put that on their TS list.

And that’s exactly the kind of thing a lot of Austin drivers and riders are doing, now that Uber and Lyft have withdrawn from the local market. According to Tuccille,

“in the wake of a ‘victory’ for pro-regulation forces, there’s been a big surge in completely unregulated rides arranged by word of mouth, through closed social media groups, and through peer-to-peer services. On Facebook, Austin Underground Ride (currently around 6,500 members) urges former Uber and Lyft drivers to join. ‘You can post your availability and info on this page and continue making the money you need to feed your families and pay your bills. Riders can post here their needs for a ride as well. We don’t need anyone. We can make our own deals as people and take care of ourselves.’”

Open-source apps like Arcade City are also making increased headway in Austin since the referendum. In other words, actual ride-sharing — the kind of genuine P2P model that should have supplanted the medallion cabs in the first place — is the biggest growth industry in Austin. And the city government and local voters, deliberately and inadvertently (respectively) doing the bidding of the medallion cab companies, are responsible for bringing it about. By outlawing the fake, hybridized form of “ride-sharing,” they opened up an ecological niche for the real thing.

Government attempts to regulate industry are almost always motivated by the interests of the regulated industry itself. But with governments and corporations being the stupid things that they are, sometimes their plans backfire.


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