Platforms such as Uber and Lyft aren’t profitable. The solution? Nationalize them. They’ve nosed their way into the framework of our society, so why not use them to our true benefit?
In a previous article I wrote critiquing car ownership as infrastructure, I mentioned the unprofitability of Uber and the potential it would have as a nationalized service. I don’t mean to say that nationalizing Uber would fix the transportation structure, but having a reliable, state-run ride-sharing service with benefit to both employee and passenger would lessen dependence on car ownership, decrease pollution and serve as a comfortable transition to a radically different transportation infrastructure.
While some might say that this is an unrealistic idea—that the country would never agree to nationalizing any of its businesses, let alone something as trendy as Uber—nationalization has happened before, and I believe it would be very much in the interest of the country to do so with Uber and Lyft. Most of my attitude toward the United States, foreign and domestic, is one of dissent; however, nationalizing private ride-share companies would be of direct political and economic benefit to both the country and its citizens, and that this argument is ultimately one of defense towards the country.
In 2020, Uber lost $6.8 billion. In 2019, it was $8.5 billion. The year before that, $1.8 billion and in 2017, $2.2 billion. Even with new strategies being deployed such as reducing supply and spending more on delivery services, the ride-sharing giants aren’t turning worthwhile profits. They’re also reluctant to turn over the revenues they do make; by now, Uber drivers have fought in a few years of battle in an effort to overthrow their draconian classification of independent contractor and gain true employee status with wages to match. These workers don’t have radical demands. In fact, looking at a list of demands from a wishful union—recent unionization efforts by ride-sharing drivers have been squashed—it’s clear to see what the drivers most desperately want are reliable wages and commission caps put on the company.
The Economic Policy Institute, a public policy think tank run out of Washington, D.C., takes the side of the drivers’ struggles and even outlines how Uber’s argument for independent contractor status does not align with its practices. Instead of playing to this bellowing public demand, Uber and Lyft have instead spent millions lobbying against these bills. When you have an already abysmal track record of profit loss, spending so much on lobbying and mangling the morale of your workers seems like an exceptionally poor business decision.
How would nationalizing these ride-sharing giants help all of these conditions? Moving Uber’s wealth and management to the public sector would have the effect of taming the rogue ego of the capitalists that run it. Uber has always had monopolistic desires without the profit to match, and has acted aggressively and illegally—for example, by tracking and evading city officials, operating in a gray area due to its corporate status as a software company rather than a tech/transportation company and disregarding the Americans with Disabilities Act. By nationalizing a wannabe monopoly such as this, the people get its network and its service without the burden of its violent profit motive.
Uber and Lyft have had a series of lawsuits and safety scandals with regards to both drivers and passengers. There is no accountability as they repeatedly shrug off sexual assault and other violence without even artificial condolences. If these ride-sharing companies were in the hands of the state, there would be clear channels, already established, where people could go to have abuses accounted for. Nationalizing Uber and Lyft would put them legally into the state apparatus and would guarantee a level of accountability that would at least be a safety net compared to what is offered in its current condition.
Uber and Lyft lose money every year and fail to perform to the standard of their Silicon Valley peers. With so much of the profit motive of start-up companies and new on-demand businesses caught up in the very short term, they don’t always think about long-term decisions, or at the least, they don’t give them nearly enough attention. A benefit of nationalization is that long-term investments and projects become more feasible. Short term profits wouldn’t be nervously watched by a board of shareholders looking to make a big, quick buck.
For something such as a ride-share company to be established and economical, it realistically must take time. Uber and Lyft have had a jarring time ripping through the nature of transportation in this country and disrespecting everyone they come into contact with—but if their platform was both deployed on a wide scale, with well-paid state workers giving safe, mostly free rides, and given enough time to comfortably integrate into the fabric of American society, then they could begin to produce positive economic gain.
The U.S. has successfully nationalized many of its companies in the past. The federal government nationalized American railroads during WWI to huge benefit; repairs were made, shortages were addressed and wages were increased. During WWII, the government again nationalized some railroads, along with brass, ore, metal, explosives and mining companies. In 2001, airport security was nationalized. 2008 saw partial nationalization of many banks.
The U.S. has nationalized its companies mainly with a sense of emergency for short bursts of time, usually to address war and crisis. It faces some intense crises and threats of war today, many with their own historically unique sense of emergency. As the U.S. grip on world power slowly slips, it would do itself good to stimulate its economy in new and creative ways.
The U.S. has been made a fool by Uber and Lyft. These companies came into play without warning, operated illegally with absolutely no consequence and have been talking a mad game while losing enormous profits. The state has been shown to be weak and without defense. For a country that spends 53% of its budget on its military, the last thing it wants to be thought of as is defenseless. The U.S. could make an example of Uber and Lyft by absorbing them into the public sector, showing strong state power and even have the added byproduct of condemning profit loss and negative public image in other companies.
And if we reaped the benefits of nationalizing services such as Uber and Lyft, it could pave the way for even larger and more consequential acquisitions; can you imagine the good a company such as Amazon could do as a publicly-owned, nationalized corporation?
This isn’t that crazy of an idea. After all, Uber and Lyft already go after government money to try and prop up their failing business models — arguably one of their best hopes of achieving profitability is by becoming “too big to fail,” and therefore saved through government support. The question is, if taxpayers end up supporting these companies, who calls the shots in terms of how drivers are treated, how data is shared, and how these services interact with local transportation infrastructure.
Many cities have replaced private bus systems with municipally run ones — granted the example is local rather than national. On the other hand, the taxi industry (which Uber and Lyft are part of, despite all their arbitrary legal exemptions) has a long history of being left out of the equation with public transit, even though as last-mile providers they are an important adjunct to any sensible transportation system built around shared transit.