Friday, 22 December 2017

Faring badly: EU ruling another blow for Uber

Geoffrey Dudley, David Banister and Tim Schwanen

A favourite saying of Uber chief executive and co-founder Travis Kalanick was that ‘it is easier to ask for forgiveness than permission,’ but recent events suggest that this strategy can have its limits.

After years of successfully disrupting established taxi businesses all over the world, in 2017 the expansionary ride-hailing app Uber is itself experiencing the traumas of disruption. The latest blow for Uber occurred this month, when the European Court of Justice ruled that Uber is a taxi operator, and not, as the company claimed, a technology platform that acts as an intermediary between driver and customer.

This means that, throughout the EU, Uber will be subject to regulatory control as a transport operator, and not be entitled to exemptions allowed for e-commerce companies. With its roots in Silicon Valley, this is also a blow to Uber’s image as an innovative technology company that apprently placed it in a different category to established taxi operations.

Innovation at the expense of customer safety?

Another notable setback occurred in a former stronghold of London, where in September the regulator Transport for London revoked Uber’s licence to operate, claiming that the company was not a fit and proper service provider, as it had failed to report serious criminal offences appropriately, and to conduct adequate background checks on its drivers.

London Mayor Sadiq Khan commented that providing an innovative service must not be at the expense of customer safety.

Uber has been able to continue its operations pending an appeal, and launched a petition enlisting public support that has been signed by 800,000 people, but has notably adopted a more conciliatory tone, with new chief executive Dara Khosrowshahi stating after a meeting with TfL commissioner Mike Brown that he is “determined to make things right in this great city.”

Founded in San Francisco in 2009, Uber epitomises the Silicon Valley image of a rapid technological success story. It now operates in more than seventy countries, with around $16bn invested in global operations.

Its market value is about $70bn, making it the world’s most valuable privately held technology company. The successful expansion of Uber has been based on a deceptively simple use of modern technology combined with the principles of the ‘sharing economy,’ whereby the drivers use their own vehicles, and are put in touch with customers who are using their own smart phone Uber app.

Prior to the ECJ ruling, Uber had sought to differentiate itself from established taxi companies by describing itself as a technology platform, rather than a taxi business, while it classifies drivers not as employees, but as ‘registered partners.’

However, this classification has become highly sensitive politically, with many drivers in the UK seeking social benefits such as sickness and holiday pay, and claiming that Uber is exploiting their self-employed status.

In 2016, two Uber drivers won a notable test case at the Central London Employment Tribunal that they should be treated as employees and given associated benefits, and were also successful with a subsequent appeal. The case has wide implications for workers in the so called ‘gig economy.’ At the same time, some Uber drivers have defended being self-employed because of the flexibility and tax benefits it allows.

Prior to its London experience, Uber’s expansion has been met with fierce resistance in a wide range of countries. In Europe the company has fought battles with governments, regulators, and established taxi operators in the UK, France, Germany, Belgium and Italy, while Uber has been excluded altogether from Hungary and Denmark.

Uber has also encountered criticism for its failure to actually make a profit, caused partly by heavy investment in its services in order to fuel expansion, and also through a highly ambitious autonomous vehicle development programme. For Uber, however, the overriding objective has been expansion and an ever-increasing number of users.

Ironically, despite losing its licence, this expansion is illustrated particularly well by the example of London, where Uber commenced operations in 2012. Unlike the situation in many other European cities, its standard Uber X service was officially registered by the regulator, Transport for London (TfL), from the outset. As Uber expanded, it provoked fierce opposition from the drivers of the established and iconic black cabs, including major protests in 2014 and 2015.

Significantly, the black cab drivers principally blamed TfL for failing to regulate Uber more strictly. As TfL became more sensitive to the case being put forward by the black cab drivers, it sought to impose more restrictive conditions on Uber, but with only limited success.

Firstly, in 2015 TfL brought a high court case against Uber and similar operators claiming that the app constituted an illegal taximeter. Uber vehicles are classed as private hire, and the law governing them in London stipulates that only plying for hire vehicles, such as the black cabs, are legally entitled to carry a taximeter, which gives a running price for the ride based on time and distance. The high court ruled that the app was legal, and could not be classed as a taximeter. In this case, the London taxi regulations rested on nineteenth century foundations, and TfL discovered that it was difficult to fit Uber technology to these rules.

After this failure, TfL made a further attempt to impose greater restrictions on Uber, but in response the company launched a public campaign that included a petition signed by 200,000 people, and TfL was once again compelled to back down. In 2017, TfL did achieve some success when the high court this time supported its case to introduce written English language tests for all drivers. But prior to revoking its licence, nothing TfL could do was able to restrict the expansion of Uber, and by 2017 it had around 40,000 drivers in London, compared with around 22,500 black cabs.

A series of scandals

Despite its success as a disruptive innovator, and in addition to its London experience, Uber was ill prepared for the disruption it has suffered in 2017 resulting from a series of scandals.

Firstly, the company was subject to sexual harassment claims by a former employee, and this was swiftly followed by a recorded heated altercation between Travis Kalanick and an Uber driver with regard to employment conditions. Uber’s image was further damaged by revelations concerning its secret Greyball programme, whereby the company would identify users who might be rivals or enforcement officials, and show them a fake version of its app whenever they tried to order a car, thereby frustrating any official action. Uber was also subject to legal action in the case of its autonomous vehicles programme, when it was accused of trade secret theft by its competitor Alphabet, the parent of Google.

A number of high profile resignations culminated in the departure of Kalanick himself, amidst bouts of in-fighting on the part of the company’s board, and a period of several months elapsed before the appointment of a new chief executive. Nevertheless, Kalanick remains a member of the board, with much debate concerning his future role with the company. Khosrowshahi will need to steady the ship, but in doing so can Uber become a more publicly acceptable company without losing its innovative edge?

In this context, how events develop in London is likely to be of particular significance for Uber. The company appears anxious to achieve a compromise with TfL, even before the appeal case comes to court. Uber cannot afford to see its position undermined in a city that is particularly important for its expansionary strategy, while it is also diversifying into other fields such as a food delivery arm UberEats. The situation is also likely to be watched carefully in other cities, with regulators possibly taking a lead from TfL in seeking new concessions from Uber.

Geoff Dudley is Visiting Research Associate in the Transport Studies Unit at the University of Oxford.

David Banister is Professor Emeritus of Transport Studies at the University of Oxford.

Tim Schwanen is Director of the Transport Studies Unit at the University of Oxford.

This article is adapted from a longer piece in The Political Quarterly journal.

Thursday, 21 December 2017

"Democracy is really struggling to cope" – Interview with David Runciman

Anya Pearson

I caught up with David Runciman, Professor of Politics at Cambridge University, after he delivered The Political Quarterly's annual lecture 'Nobody knows anything: Why is democracy so surprising?' to discuss the volatility of electoral politics, fake news and the state of democracy.

In your talk, you mention the “five P’s” who have been wrong about recent elections: politicians, pundits, pollsters, political scientists and prediction markets. You argue that pundits, pollsters, political scientists have been getting their predictions wrong for a long time, and don’t have strong incentives to change this necessarily. But it seems to me that politicians and prediction markets do have strong incentives to get predictions right. What do you think has derailed them in recent years?

My argument was that for [pundits, pollsters, and political scientists], being interesting is often better than the business of being right, whereas for politicians and prediction markets, being right is their livelihood. And it’s one of the big puzzles, because they should have sufficient diversity that they pick up on the signals that other people miss. My feeling is that those other two groups are also suffering from groupthink. They’re listening to each other rather than listening to the signals that are coming from the wider public.

But then the questions is: why is that? Because the whole point of them is that they’re not closed off, they’re meant to be open towards lots of different opinions.

I suggested a couple of reasons. One of which is the feedback loop. The people in politics listen to what the City thinks, and the people in the City are listening to see what the betting markets think.

And then the other thing that I genuinely think is a big problem for contemporary politics is the divide between the people in all of these groups, who tend to be professionals in one form or another, and so have gone to university, and the people who left education earlier.

I don’t think it’s surprising that people who comment on politics in newspapers get it wrong, because you might expect that, and they’ve done that for two hundred years. But with these other groups there seems to be a bigger disconnect in the past two years.

I think your idea about groupthink and the feedback loops is a really useful one. In your talk, you also mention how dramatic UK elections in recent years have thrown us all “off kilter”. And your basic claim there is that the digital revolution has increased the supply of information, and this makes politics more unpredictable. Could you comment on some of the evidence you find is the strongest in linking increased information supply to increased voter volatility?

I think there is clearly evidence for increased volatility. One of the things that political parties have got wrong in recent years is that election campaigns are not meant to matter. There is meant to be a sort of settled set of opinions out there, and then election campaigns churn it up a bit, but when it comes to the vote, the settled opinion reasserts itself. And people revert back to the things that they knew before the campaign started.

And now, not just in UK elections but around the world you’re seeing that the four six weeks of a campaign actually changes peoples’ minds. And that does seem to be evidence that short-term cascades of information actually alters their [voting] behaviour. That does seem to be relatively new, since the last three to four years.

We can see these things happening, [although] it’s much harder to provide the evidence that shows this volume of information over here creates this volatility over there. But these two things do seem to be connected.

People inhabit different information universes which don’t overlap. And then, within those universes, there does seem to be a lot more movement as people change their political behaviour.

But it’s so early. People have been studying politics and elections for ten, twenty, thirty years are having to adjust to a reality which is two, three, four years old. It can’t be a coincidence that this period of time in which people sharing news on Facebook has become, for many, the dominant source of information. It’s almost certainly part of the explanation.

That’s interesting, and made me think: what about the issue of digital literacy? 12.6 million adults in the UK lack basic skills in this area and five or so million adults have never used the internet. I know these are relatively small numbers compared to the country as a whole but how do you see this fitting in to your theory about voting behaviour?

That’s a good question. My understanding is that the vast majority of those people are older people – though not all.

Again, one of the things that has been overturned recently is this idea that ‘old people vote and young people, particularly students, don’t vote’. But in the 2017 election, the fact that young people and students turned out to vote took everyone by surprise. Some of that churn and volatility seems to be disproportionately affecting certain parts of the population. And, of course, there are still people voting in traditional ways according to traditional patterns.

I heard a presentation by YouGov where they said one of the things that they missed was that there was this view that you can segment populations by age group. There’s an age group that are 65+ and you treat that as a homogenous group. They’ve decided that that was a mistake. There are now so many people who are 75 – 80 + and those people are really hard to get to. They’re often living in care homes, they’re not online, but they vote. And they tend to vote Tory.

It’s a complicated picture. There’s churn among young people, there’s stability among older people, and there’s a group of older people who maybe do behave in traditional voting ways but aren’t being picked up.

We heard a bit about your views on the functioning of democracy and how surprise was potentially an important part of it. How should we measure whether or not democracy is functioning better than it was, say, twenty years ago? I mean, what kind of criteria could we use – if that’s a possible thing to do?

That’s a big question. One of the really useful functions of these surprising elections is just to make people aware of the country that they live in. A lot of people said after Brexit, after Trump, especially after the two [UK] general elections, is that they found something out about their democracy that wasn’t visible before. And that’s got to be, I think, a positive thing.

But there is that surprising-ness that reveals itself within democratic elections. The thing that I’m warier of is you get randomness and surprise in the functioning of the institutions themselves. They actually become destabilising for the framing of democratic politics.

It’s kind of amazing the extent to which Americans accept that Trump is their president. Despite the resistance. It’s still the case that his legitimacy, though it’s questioned, is not really in doubt. So surprise within that context is probably a good thing. But then when that context itself starts to get a bit unpredictable so people aren’t really sure what the shared values and norms are, they aren’t really sure about which institutions are legitimate…

I think one of the wider consequences of Trump and Brexit, not so much the [2015 and 2017] general elections is that it would make the functioning of the institutions themselves unpredictable. Maybe not elections, elections are probably the one thing that we’d probably still cling onto, but some of the other basic functioning like the value of parliamentary government, role of referendums versus representative democracy – some of the basic frameworks of politics – if you can’t be sure from one year to the next which foundational rules will apply, I think that’s more hazardous.

The two are related. You get more of the second because of the first. Because if you’re going to elect Trump, if you’re going to vote for Brexit, you don’t just get information about the country you live in, you get consequences, which are, particularly in Trump’s case, potentially the destabilising of the institutions.

So there are surprises within democracy and there are surprises about democracy. And I think on the balance sheet, I’m inclined to the pessimist side. I think democracy is really struggling to cope at the institutional level. You do need predictability in the way institutions function.

In terms of Trump’s legitimacy – and I’m not questioning the fact that most Americans are not pushing back too much on the fact that he should be in the White House at all, but the issue of ‘fake news’ is in some ways unsettling his legitimacy. I felt like in your talk you implied that fake news is a misleading term: ‘My news is different to your news’. Can fake news be so readily dismissed?

There definitely is quite a lot of fake news out there and there’s unquestionably some manipulation going on. The main thing I was trying to say was that I’m uncomfortable with the idea that the answer to the question ‘Why is politics so surprising?’ is: ‘Fake news’.

It’s just too simple.

If you take that as the answer, you’re missing the bigger picture, yes. And there’s something uncomfortable about saying that it’s because “Bad people deceived gullible people” because it takes away the extent to which voters are actually finding out things for themselves. There’s a danger that we end up calling one person’s preference for a news source over another news source ‘fake’ or ‘illegitimate’.

It’s not clear to me that the people who calling some things ‘fake news’ are themselves on the side of the angels when it comes to objective reporting. It’s a variant of this thing where people say: ‘The people who voted for Brexit were lied to, the £250m [for the NHS on the bus]… they didn’t understand the issue’. I’m not sure the people who voted to remain understood the issue.

I don’t think anyone did. And it smacks of class bias as well; people being very judgemental about Brexiters.

Yes, and particularly, I have to say, highly educated people. [Remain voters] were often just as tribal as the other side.

Absolutely. Fake news or not, there is of course the problem of the echo chamber, of filter bubbles, and people not interacting and engaging with dialogue. So, my last question is how do you view the role of mainstream media in the future. Does it still have a place where people with differing views can interact?

I’m not sure whether people ever really interacted through mainstream media. There’s a nostalgia in this country for a time when everyone watched the BBC and ITN. I’m not sure that there was a huge amount of interaction going on when the only way you could get your news at nine o’clock was the nine o’clock news, but there was clearly a shared water cooler thing, there was a shared grounding for what people were then thinking about.

There was a synchronicity in time at least, and then potentially conversations happening in spaces that weren’t filtered.

That has gone. I don’t think there’s going to be a time where the BBC will manage to capture all the different things that people think. The same with newspapers.

And there is a dystopian version of this which is that people are self-curating their news sources but it’s all from one giant corporate entity. I don’t think Facebook is a malevolent organisation, but just that kind of monopoly power. You don’t predetermine what happens on these networks but you are the provider of the network.

Facebook would say, well unlike the old days of the BBC and ITN, on our network people really are interacting, they really are exchanging ideas, they really are communicating. Which is sort of true. But there is something chilling about the thought that all of this is happening on a framework that the people who are exchangers of information don’t control and don’t understand and don’t see.

I mean, the thing about old-fashioned media is that there was at least some transparency in what was going on.

And they change the algorithms and the way that they operate their platforms without revealing what those changes are.

There’s that famous thing you can do where you go on the Guardian website and you can use an ad revealer to show you at any given moment how many advertisers are tracking you. Machines are watching you. And so much of it is hidden.

And, of course, we know that people act differently when they know they are being observed, as well.

It’s so new that we don’t really deeply understand what it means and it’s changing all the time. I mean people’s behaviour is unquestionably changing all the time as they react autonomously and independently to their understanding of what’s happening to them. I’m a bit nostalgic for the times when people at least understood what reading the news meant. It meant you read it and they supplied it. Now, reading the news means they’re watching you, that’s different.

I think there’s a level of trust which is lost as well, of people who are the gatekeepers of knowledge.

Yes, and to repeat I don’t think it’s because there are bad people who are exploiting the system to engineer election results. In a way, it’s more serious than that. Good people as well as bad people – I think that most people who work at Facebook are decent people, they’re not proto-fascists. They’re probably well-meaning liberals. And the fact that those people engineer the system is in some ways scarier.

Anya Pearson is Social Media and Events Editor at The Political Quarterly.

A recording of David Runciman's lecture is available below. 

Wednesday, 20 December 2017

Class still matters, but it is more complicated than that

Rachel Reeves

We asked a selection of authors to respond to ‘The New Politics of Class’ by Geoffrey Evans and James Tilley

Writing in mid-2017, it is very hard for anyone to pretend that class is not a major factor in British politics. After a major financial crisis and the deepest recession since the 1930s, with household incomes stagnating and inequality growing between class, generation and region, we seem a world away from a time when anyone felt able to say ‘we are all middle class now’.

In many ways, this reinforces the arguments made by Geoffrey Evans and James Tilley in The New Politics of Class, which is a welcome, thorough and provocative examination of the enduring impact of class on British politics.

Labour's working class problem

Despite a remarkable increase in voter share at the 2017 general election, Labour's growing problems with working class voters remain. Labour made its biggest gains in seats with heavy concentrations of middle class professionals and the wealthiest voters, while losing ground to the Conservatives in the poorest seats in England and Wales.

However, we should be careful not to overstate or oversimply the importance of class in political preferences. Other factors matter too: a working class twenty-five year old today is likely to have much more in common with a middle class twenty-five year old than they are with a working class person forty years older.

The political fault lines in contemporary Britain are complex, as the academic David Runciman recently noted in the London Review of Books. New and old gulfs between sections of our society are widening, and two-party politics now has to accommodate many divisions of generation, educational background, geographic location and much more.

In analysing the problems facing the Labour party, we therefore need to understand the multifaceted aspects of identity: we struggle with older, generally white voters (especially men), outside cities, with relatively little formal education.

The authors are correct to identify the overlap between cultural and economic concerns, when it comes to globalisation. Labour became overly relaxed about the dislocating effects of globalised markets on ordinary people and communities, an attitude that was most evident in Tony Blair’s 2005 speech to the party conference, in which he spoke of a changing world “indifferent to tradition. Unforgiving of frailty… replete with opportunities, but they only go to those swift to adapt, slow to complain, open, willing and able to change.”

This vision certainly did not conform to the feelings of working class communities, but nor do I think it conforms to how most people in Britain today experience or feel about the world. We all want a sense of belonging, community and stability in our lives, and we all hold on to some parts of tradition. In this election, younger, middle class voters in cities were often reacting to the vanishing possibility that they will be able to enjoy exactly those things and instead are looking ahead to less economic security than their parents enjoyed.

Labour's role

The fundamental task of the Labour party remains unchanged: to offer an appeal able to unite working people across social groups to reform capitalism in their interest. There is still space for consensus. Many of the major challenges we face cut across classes, such as the housing crisis and the need to support our embattled public services.

So a party that has put opposition to austerity front and centre of its electoral pitch should be deeply concerned that it is those who have experienced some of the worst austerity (certainly more than the middle classes) who are least moved by its appeal.

A left-wing government that ignored the poorest and those less able to adapt to globalisation and automation, offering them only a subsidy in the form of a universal basic income, sounds less to me like a bright new future, and more like a dystopian nightmare.

Labour's future must depend on persuading working class people that we can represent them and their interests, both for electoral purposes and because that is the point of Labour.

Rachel Reeves is the Labour Member of Parliament for Leeds West.

This article is adapted from a piece in The Political Quarterly journal. You can read the full article here.

Monday, 18 December 2017

Occupation class is on the decline, but cultural class is on the rise

Eric Kaufmann

We asked a selection of authors to respond to ‘The New Politics of Class’ by Geoffrey Evans and James Tilley

The New Politics of Class by Geoffrey Evans and James Tilley offers a comprehensive new sociology and politics of class. For its wealth of useful empirical research alone, this book should be required reading for students of British politics.

An interesting dilemma presented by the authors is the tension between concluding class is in decline for structural reasons even as its cultural stability suggests it is as important as ever.

The country is clearly shifting from manual to non-manual occupations. The new knowledge economy has created more opportunities for professional and managerial occupations. As a result, the share of the labour force in working class occupations has fallen from 60 per cent in 1950 to about a quarter today.

Yet there is a paradox: more of the country identifies as working class than middle class. When asked to choose in a forced-choice format, the ratio of working to middle class is around 60:40. This has changed very little since 1960, suggesting that class identity has a strong inherited component that is only partly rooted in material realities such as educational attainment or profession.

To illustrate, opposition to immigration and the European Union remains persistent amongst working class people. In both cases, there is an independent conservative effect of being working class even when education and other predictors are held constant. Education matters about 3 to 5 times more than class for immigration opinion, but is only twice as important as class for views on the EU. This portends a widening class aspect to the emerging globalist-nationalist ‘culture war’.

In the Citizenship Surveys and Understanding Society, working class people who strongly identify with their class also identify more strongly with their nation. These differing class versions of national identity are nicely captured in qualitative work which finds that many in the white working class see Englishness as an insurgent identity which is being denied by the liberal middle class, while sections of the middle class view Englishness as unrespectable.

Evans and Tilley could have mentioned that political discourse has also become more sensitive to the term ‘white working class’ even as discussions of class conflict have faded.

The white working class/English nationalism nexus has been at the centre of a new politics of anti-liberal elite resentment, from the rise of the British Nationalist Party (BNP) in Barking and Dagenham in 2006 to the UK Independence Party (UKIP) from 2009 and Brexit.

Consider the blowback for Labour from Gordon Brown's comments about Rochdale pensioner Gillian Duffy in 2010; and from Emily Thornberry's 2014 tweet depicting a George Cross-covered working class home in Rochester. These were about cultural more than economic tension.

In view of the fact that 60 per cent of the country identifies as working class while working class identity predicts hostility to immigration, it would be wrong to write class's obituary. Indeed, quite the reverse is true.

Perhaps what we face is a culture war between ethno-nationalists and globalists in which class identity—increasingly emptied of material connotations—is an upstream engine of cultural politics.

Alternatively, as Corbyn's performance shows, the white working class may become a swing vote pulled culturally toward the Tories and economically to Labour. This configuration means that if the Tories move in a liberal direction, opting for a soft Brexit where immigration remains at its current level, UKIP could recover its 13 per cent vote share.

But I digress. The point of The New Politics of Class is not to engage in punditry and prediction, and that is to be commended. Taken at once, the book is a remarkable achievement and certain to be talked about by students of British society and politics for years to come.

Erik Kaufmann is Professor of Politics at Birkbeck, University of London and author of Whiteshift (Penguin, 2018).

This article is adapted from a piece in The Political Quarterly journal. You can read the full article here.