Uber, the car sharing/limo dispatch/whatever service which is sparking protests from cabbies, cab companies, cities, and even some consumer advocates, has “disrupted” (to use the fashionable term for “fucked their shit up”) the somewhat classist world of taxi and limousine services. While there are very real problems with access to Uber (it requires a credit card, something that many people of color and low-to-moderate income folks simply can’t get reliable access to) it resolves many of the equally vexing problems presented by cabs. This recent piece in Forbes gives a pretty extreme example of the problem with relying on cabs, but even in cities where taxis are better managed they are expensive, tough to find at times, and are often charged with refusing service to people or neighborhoods that drivers hold a prejudice against.

I don’t want to focus on these real and legitimate problems with both Uber and cab companies, they are discussed elsewhere in great detail. What I find more interesting is that the roles in this unfolding drama have been miscast.

The dispute between Uber and cab services is often described as a fight over driver earnings, with companies and medallion owners as the employer and the driver as the employee. An analysis of this relationship doesn't support this conclusion. In any business relationship, the business

owner invests his own capital, hires labor to add value to the capital (be it money, land, raw materials, etc) and sells it to a consumer at a profit. This relationship, between capital and labor, is where profit is formed. Upon sale of the good or service that profit is extracted as liquid capital (money in this case) which can be reinvested in the business or extracted by the owner for other needs (such as supporting themselves).

Clear so far?

If the consumer in this relationship is the person riding in the back of the car, cab companies don’t fit into the model as the business, but instead as the labor. The driver, or more precisely the owner of the car and/or the medallion is the owner of the business. The cab company may lease him the car and, for the fee included in the lease, provides dispatch services, advertising, credit card processing, and other services, much like any firm sub-contracted by a business to provide a service. In cases where the cab driver owns the car they pay the cab company a fee for these services. Just as with any business, the driver is investing his own capital in the anticipation of making a profit. Just like any other businessman, his daily earnings over the cost of doing business are his to keep. If he fails to earn out his cost for the day he will lose money.

Into this decades old arrangement steps Uber, offering drivers a lower cost model. Rather than requiring the driver lease an Uber vehicle they use their own car. This can be a traditional limo, a Town Car or other luxury vehicle, or it can be a private car which meets certain minimum requirements. The latter service, UberX, is that which has raised the most dust, and for good reason. A cab driver can easily decide to forgo his daily lease payment and use his private car, making more than he would behind the wheel of a cab.

Many of them do, as my last cab driver told me. He complained about the cost of using Barwood, the dominant taxi service of Montgomery County, Maryland. The Washington Post reinforced my driver’s point a few weeks later, noting the growing line of idle cabs sitting outside the Barwood garage in Rockville.

While Uber and other car sharing services have real issues to address, such as low income access and disposition of workers employed by the cab companies in various support functions, we have to start by disentangling the relationship between drivers, cab companies, and their passengers. Only when we truly understand where drivers fit in the equation can we ask which solution is best for those who do the work and those who pay for it.