Yannic goes to New York to find out how Uber disrupted the taxi industry in the city, meets Princess and finds out why, sometimes, it is important to have a toothpick in your car.
Ride-sharing app, Uber, came to New York City in 2011 and completely disrupted the taxi industry. Ever since, the number of Ubers has outgrown taxis, and today the ride-hail app generates more rides than traditional black cabs. While Uber faced a massive backlash in many European countries, it would seem that it has remained unchallenged in the Big Apple.
In this episode, Yannic heads to New York to find out how Uber has changed the market, what the future of taxi industry might look like and how the design thinking approach might help to solve the "Taxi vs. Uber" controversy.
Bosch Alumni Network Event:
Design Thinking & Public Policy - Uber & Co. vs Taxi
New York city
Music in this episode:
The road we used to travel when we were kids by Komiku
Under Suspicion by Lee Rosevere
Pretending you care by Autumn keys
Kleiner Trauermarsch in c-Moll KV 453a (Walter Gieseking) by Mozart
EPISODE 04 - Princess disruption – Transcript
© 2018 – Step One Productions
This is STEP ONE
a podcast about people striving to change their world -- our world.
We tell you stories of the Bosch Alumni Network. A network of doers and thinkers connected across the globe working toward positive change.
I am Benjamin Lorch.
And today’s episode: Princess Disruption
But before we dive into our story, we want to introduce you to the community this podcast is part of.
It’s the Bosch Alumni Network, which consists of people who have been supported, in one way or another, by the Robert Bosch Foundation. The network is coordinated by the International Alumni Center, a think & do tank for alumni communities with social impact. The iac Berlin supports this podcast. If you want to know more about the power of networks, visit iac-berlin.org.
Ben: So Yannic, you went to New York – and it’s kind of funny that you always keep ending up in a taxi in our podcasts.
Yannic: I was thinking the same thing when I saw what the topic of the workshop. Taxi vs Uber. And to find out more about this controversy, I knew I needed to speak to a Uber driver. So meet Princess.
Princess: The way I go about it is that I get in my car and the first thing that I do is pray. Because you don't want crazy people. Everything you do in life, you gotta have God with you – so first of all I pray and then it's just like, for me, it is just like, I wanna treat people the way... like I wanna be treated as well.
Yannic: So Princess has this new car, very clean. It is like most Ubers, they are pretty clean. But Princess’s car is special. She has a pink leather wheel with fake diamonds on it, and it really suits her overall style. She’s been driving for Uber for about a year now, and she has started working for other driving companies such as Lyft and Juno.
Ben: Well, one thing I liked hearing here is the voice of a woman behind the wheel. I know that the taxi industry was male-dominated for so many years. So this sounds like a change into the right direction and it sounds like Princess has some style.
Yannic: And now let’s switch cars and get in with Eugene, a New York city cab driver.
Eugene: Look what I found in the backseat on the floor. A Cigarette bum. So people still smoke in the vehicle. That is something that almost never happens anymore. That's so rare.
Yannic: So I’m in the car with him and waiting for him to get ready.
Eugene: You are going to see how a taxi driver starts his day...The backpack, I could survive in the wilderness for a week with everything I’ve got in this backpack, food, telephone, band aids, scissors. I once actually a passenger asked me if I had any scissors and I did. (laughing).
Yannic: So we are in his car...You’re feeling it?
Ben: Yeah, I am feeling it.
Yannic: Eugene rides his car, or a car, since 1977. He's this small guy with a slim face. Every day, he drives one hour from his home in New Jersey, to Manhattan, to pick up his cab. And Eugene says he's highly organized and hell, he's right about that. Listen to this.
Eugene: Can't forget my toothpick. You see everything I need is a toothpick. I keep that right there. That'll be needed perhaps later in the day if I eat something. My two tissues, which I have in my front pocket, from home, I keep behind this (haha) on the rubber band. Only on the right side. My music, what should we have today, which probably won't work today in this vehicle, cause it usually does not accept CDs or it'll eat them. Well he we have the Beatles after they broke up some of their best songs except Ringo. cause you know Ringo.
Yannic: Princess and Eugene, they are both drivers in the New York city, little fish in a big sea of drivers. And this sea grew larger and larger from 2011 on, that’s when Uber came and flipped over the taxi system.
Yannic: Since 2011 till today, the number of Ubers has grown from 0 to 65.000 cars in New York.
Yannic: Yea. And compared to that, there are only about 13.000 yellow cabs. Even when it comes to rides Uber has outgrown taxis by 400.000 to 300.000 daily rides with yellow taxis.
Ben: So is it still possible to earn a living as a cab driver, a traditional cab driver in New York?
Yannic: It’s still possible but it has become less popular.
Ben: Because Uber is such a good employer? That is not exactly what I am hearing.
News collage: For Uber 2017 hast been a year filled with controversies and speed bumps...Uber has fired 20 employees including senior executives. This follows an internal investigation into sexual and other forms of harassment against its employees….Just weeks later a video of Kalanick berating an Uber driver went viral. Kalanick later issued a public apology, saying he’d been seeking help. Uber is also running in local regulatory issues. It’s been sued by disgruntled drivers, criticised for price crouching by customers and faces questions of liability in accidents. Police said it happened Saturday when a driver failed to yield to the Uber vehicle while making a turn, the force of the collision sending the driverless SUV rolling onto its side.
Yannic: So, Uber had its scandals in the last years, and also scandals that lead to the departure of Kalanick, the former CEO of Uber. But still, the drivers that I spoke to were pretty positive about driving for Uber. Not everything about this company is negative.
Ben: No, there has to be something to it.
Yannic: And I want to talk about these positive sides as well, but let’s stick for one moment on the negative sides.
Eugene: I could tell you around the time of 2014, I would say in the spring and early summer of 2014, suddenly you were seeing advertisements for Uber everywhere.
Yannic: In the early days of Uber, drivers could make 5000 dollars per month, before taxes. That was good money.
Eugene: And the advertisement was not particularly aimed for passengers, it was aimed at the drivers.
Yannic: So what did the advertising say?
Eugene: Come drive for Uber. Everywhere you looked, billboards, I mean everybody had an ad for Uber. Talking to the drivers, come ride for us.
Yannic: But as the demand for drivers went down quickly because suddenly they had so many people applying for jobs, the rates for the drivers plummeted.
Princess: Yeah, their cut is way too high, I understand they provide the riders and as well as the drivers, but like we're still doing most the work. If you think about it.
Ben: And how does Uber explain this policy?
Yannic: Well you know, Uber is this company that is just all about technology so of course they would implement a system which is dynamic, based on algorithms. So they would analyse the whole traffic and just adjusts the pricing. So this is why the system is tweaking the numbers all the time. And it is actually not in the driver’s favor. So, to make it more concrete: As an Uber driver your monthly expenses are something about 750 dollars: these go out for insurances, gas, oil and things like clothing and some of the Uber drivers even offer water bottles.
Ben: Wait, so the Uber drivers give out free stuff to their customers?
Yannic: Ahem, yeah, I didn’t get any but yes, they do.
Ben: Why would they do that?
Yannic: Well, probably you didn’t take an Uber or ordered it yourself because otherwise you would know that in the app you can rate the driver from one to five stars. So in this way there’s no need for surveillance of the drivers. This is now done by the users.
Ben: But what happens if a driver doesn’t perform well?
Yannic: They you get deactivated.
Ben: Just like the app?
Yannic: Yeah, exactly.
Ben: What happens in your period of deactivation?
Yannic: So first I wanna ask you, when do you think this happens? At what rating do you get deactivated.
Ben: I don’t know, maybe when they are at an average rating of 3 stars, right at the middle? I mean, average 3 or below, that kind of thing?
Yannic: Ok, it is 4,6.
Ben: Ok, that is the high curve...I don’t know if I am ever going to use Uber, I mean that sounds so Big Brother to me, I don’t like judging other people, I don’t like reading the opinions of others...I mean, it is a mess.
Yannic: Ok, but cheer up, Lorchi. Now we are getting to the good sides of Uber.
Ben: Alright, take me there.
Yannic: Ok, so on a positive note: You have a certain control as a User. Also, as an American, you probably know that yellow cabs had a reputation of being sometimes unfriendly, old and dirty cars, too picky…
Ben: Taxis were notoriously unfair. I guess the Uber app might place a new filter between people and that is probably good. which is both good and bad.
Yannic: And the best argument would be, it is really fun to use, I mean, it really works.
Ben: I am sure. I mean, you can see the system, instead of just an anonymous call, waiting, now you know where the taxi is, and it is literally in your hands.
Ben: So to summarize- the Uber user gains a lot of advantages about transparency, about the estimated waiting, a ride time. Not to mention lower prices at times. But it is clear, it also created some tensions.
Yannic: Yes. And these tensions, I wanted to investigate.
Yannic: Let’s put all into perspective. Today’s problems of car transportation in New York city are only the newest ones in a long tradition of taxi driving. And for that reason, I went to someone who knows all about it.
Graham: I am Graham Russel Gao Hodges, I am a professor of history at Colgate University and the author of Taxi – a social and cultural history of New York City cab driver.
Yannic: Graham Hodges is what you could call a “taxi historian”. He has been a driver himself for five years in the 70s. And this is what he thinks about Uber:
Graham: Initially there’s a big rush by younger people into doing the service, gradually that expands to a lot of other people, older people who need rides to places where’s difficult to get a cab, African Americans find it often attractive because yellow cab has a really bad reputation for not picking up people of color, and the Uber was at least nominally doing that.
Princess: I would hail a taxi over a black car but the taxi drivers are really bad. A lot of them stink, like really bad, a lot of them are racist. You would hail a cab, let’s say me and a guy, specifically a black guy, he would hail a cab, and the driver would have no one but he would not stop. He would just keep going. Or he would stop and ask where we are going which, by the law, you are not supposed to. But he will ask where you are going and you’d say I am going to Brooklyn coming from Manhattan and he will say I am not going there. And drive off..
Graham: Taxi companies have been notoriously greedy, and cab driving has gone through major transformation in staffing over the last 40 years. Particularly in the use of lease-hire contracts.
Ben: Lease hire contracts? Like when you you lease a car from the company and drive for just for a week or so?
Yannic: By using that model you will have to first earn what you advanced for being able to ride in the first place. So, let’s say, in a normal week, you would have these expenses and you are covering up for them by Monday, by Tuesday, and only by Wednesday maybe you start earning money. And with that other model, like with Uber, you get money from your first ride on basically. Because you don’t have the advances.
Ben: Right, so it makes sense why so many drivers would switch to Uber.
Yannic: Yeah, if they don’t own a license themselves.
Ben: Right, the medallion system.
Yannic: Can you try to explain that to the listeners?
Ben: Sure. The yellow cab drivers would buy a medallion from the city which was the license for operating a cab in New York. And these licenses were limited in number and therefore extremely valuable. Before Uber entered the market these medallions could fetch up to one million dollars when bought and sold on the open market. They were considered a “ticket to the middle class.” And then the prices dropped. Dramatically.
Eugene: He are first leasing the medallion. And then you’re thinking, I want to own one, instead of paying somebody else’s medallion, or paying off somebody else’s medallion. I am going to pay for my own medallion. And here is what you need to do to buy a medallion worth a million dollars. That is selling for million dollars. You would have to come up with 70, 80, 90 000 as a down payment. If you are a taxi driver that means that you are probably going to work like a slave for six, seven years, something like that.
So 2014 was arrived and all these guys who had worked like that to save money for the down payment suddenly had nothing. Look what he looks like in the eyes of his wife, in the eyes of his children, in the eyes of all the people he knows in his life. Because this guy was trying to achieve a big step up from the poverty. And now they're wiped out. And for some people that's enough to commit suicide.
Yannic: This is the reason I was asking Hodges, the taxi historian why the city would allow Uber to the market in the first place. I get why the users and the drivers would accept the new technology, I accept it myself. But technically this practice was still illegal. I mean at least in Europe this wasn’t possible. The European court ruled that Uber should be regulated like a traditional taxi company.
Graham: I understand that as a German you are confused by that because Germans in general obey laws. Uber in general likes to describe itself as a disruptor. And they have done this in a number of cities, they did it in New York. They simply say “we are here and we are established and sue us if you want to stop us”. And so once they get into that kind of political and legal battle, they operate and increase their numbers because Uber is extremely well funded. There is a lot of speculative money going into Uber which helps them establish a presence even though it is not legal. And you know, police department in NYC has a lot more important things to do than regulate taxi cabs.
Yannic: And that’s the moment when it sank with me. That in the US, it is okay to trust the market and what they call “disruptors” to come up with an idea to innovate a system.
Ben: But I mean, Uber still needs to be regulated, I think.
Yannic: Yeah, I think so too. So I went to this workshop organized by the Bosch Alumni Network and the Global Diplomacy Lab. We were in Brooklyn, in this nice loft. A lot of participants were there and I was eager to see what they would come up with.
Ben: And who were the participants?
Yannic: They came from the public sector, from NGOs or foundations, and they were all people interested or involved in one way or another in policy making. It was kind of an interesting combination of people. The method of the workshop was design thinking.
Ben: Alight tell me, what is Design Thinking?
Yannic: To begin with, it’s about breaking your constraints. This means that within the process you first have to write down everything you think you know about the topic. That means prejudices. False assumptions. So let’s say you had to interview an Uber driver,which is basically what they did at the conference.
Ben: Were they interviewing anyone else.
Yannic: Yeah, taxi drivers, experts...transportation policy makers, so the idea was to get all the opinions on board. So while the groups were working, the journalist I am, I interviewed some of the experts myself. Because I too, had questions that I wanted to have them answered. So I went to this one expert, Paul Lipson, he is a consultant working in clean transportation and the renewables and I asked him how he sees the shift of power in this sector, and what the future holds for the industry.
Yannic: The moment you outsource the public transportation to a company you lose independence, because at some point Uber will become….critical…
Paul: Indispensable part of the transportation system….
Yannic: So how would you, how should New York deal with that?
Paul: It will be another disruption. Let’s remember, yellow cabs were a critical part of the transportation system, they no longer are. They were disrupted. Uber is gonna be disrupted by autonomous driving, Uber is going to be disrupted by any number of things, especially I think congestion pricing, that will tend to mitigate the impacts and limit the benefits to the company for being in New York City.
Yannic: So you are just waiting for the next wave to come….?
Paul: If I was a policy maker; I would be accelerating that wave, I would be building into the congestion pricing bill, that discourages use of single occupancy vehicles for livery, for taxi fares and that encourage ride sharing, clean transportation, encourage bicycling. All the things that will make New York city cleaner, and more livable, and ultimately more equitable too.
Ben: Isn’t design thinking also a way of totally disrupting ecosystems that have formerly existed?
Yannic: Yes and no. Innovation is a double edged-sword it can harm, it can do good. I asked the design thinking coaches from the workshop. They are called Ektaa Aggarwal and Alessandra Lariu, I asked them about this dilemma. And they told me-it is a tool. It’s up to you what you make out of it.
Coaches: Every time we create something new using this method...it is not necessarily that you can predict how it is going to go when it’s out in the world; doing its thing. I think an analogy to use is – imagine a baby is born, like you used design thinking and now you have a baby. Now if there’s now parental guidance, you can’t blame the baby for being a crazy kid. You have to parent the baby in the way you want the baby to be raised, with a decent knowing of right wrong and morals and civic code of society, and so you can’t blame the baby that had no supervision for how it’s turning out, it’s you job as a parent to... Once innovation is born into this world, through the process of design thinking and creativity, there are other systems that need to come into action and place...
Ben: So how did the groups in the workshop perform? Did the create any new stuff? Did they innovate, ideate - that’s the design thinking term, right? Any sorts of solutions, any step ones?
Yannic: One group who thought of refinancing the driver’s lost medallion money by creating this billboard, advertisements for the yellow taxi. There was also the “Beehive group”, that came up with the idea of a common space for Uber and taxi drivers in the city, where they could rest, have access to toilets. And then there was this group called Driving change. They focused on the high competition among the drivers and also on the animosity between the drivers and the clients.
Tape from the conference:
So should we just sit down and do it…
How much time do we have?
I have no idea…
Probably not enough…
That should not go out...
Yannic: During their pitch you will hear them play different roles basically, using quotes from the interviews they conducted.
Ben: Ah, they are users themselves.
Driving change group pitch:
- It’s the best of times, it’s the worst of times. It’s very sad, I like the technology. But I don’t want technology to kill jobs.
- Hi, I’m VJ, I’m from Pakistan I live here in New York for the last 5 years. I was a taxi driver before but then I moved to Uber because I found it very interesting. But to be honest, I’m a bit anxious - I keep hearing about a lot of things, that cars are not going to have drivers, anymore in the future, or that the market is very competitive right now.
–My name is Ann Davies, I’m 67 years old. I enjoyed my retirement, since three years. My husband passed away 2 years back, so sometimes I feel lonely.
Yannic: Their proposal was to implement a new rating system that would match drivers and clients on a personal level based on similarities and then to create a more natural experience, during that intimate moment that is a ride basically. Because in a few years, there might be no more need for Eugene and not for Princess anymore. I mean, no need for any drivers at all.
Driving change group pitch: We’re gonna transition into an industry, these jobs may disappear in the future. So we have to be prepared for it. And how we’re gonna create empathy towards people who are going to lose their jobs. Everyone here took an Uber, and how many times did you talk to the Uber driver? If a machine would substitute the Uber driver, would that change the experience? Probably not nowadays. So the idea would be to bring back this personal aspect to it and make people have empathy.
Princess: I personally like that. I like he aspect of getting to know people. Even though I am never gonna know you again, at least I met this person. And it is just for maybe five minutes, maybe ten minutes...I get customers that sometimes they actually need to talk because they have so much on them. You know, I feel like now we have the phones and the apps, like you said and all these other stuff, especially in New York, we don’t really pay attention to other people, we don't really try to get to know other people. But when a person gets in my car, we're gonna have this quick conversation and hopefully both of us leave this car with something new. With something that made us happy. And I think that's my passion. Like, I love to see and make people smile. So, I like it, I love it. It's great for me.
Yannic: Thank you, Princess.
Princess: No problem....
Yannic: On Saturday evening, at the end of the workshop, the design thinking jury announced the winner of the competition.
Conference tape: And the winner is …. Driving change (applause and laughs)
This has been Episode four of Step One.
Reporting by Yannic Hannebohn
Our editor is Jelena Prtoric.
Our theme music is composed by Niklas Kramer.
A special shout out this time goes to all the lovely people who came to our recent launch party in Berlin to discuss this episode with us, support us and celebrate with us. Lots of love!
The teams whose voices you hear in the piece, presenting their innovations during the workshop, and our team, too, we’re all part of the Bosch Alumni Network.
If you liked this episode, be sure to tell your friends about it. We’ve received a huge amount of positive feedback and we want to thank you for spending your time on this thing. We appreciate it. Also if you want to support us even further, tell one friend about this episode.
Remember the next step is always step one.
This is Benjamin Lorch.
Thanks for listening.