Workplace

The Drivers Cooperative thinks ridehailing should be owned by drivers, not venture capitalists

The Drivers Cooperative is raising $1 million through crowdfunding to offer a driver-owned alternative to Uber and Lyft in New York City.

Rows of model cars on a white background.

Since its launch, the co-op has amassed 40,000 registered users and 3,400 drivers, and completed more than 2,000 trips.

Image: Randy Tarampi via Unsplash

Uber, Lyft and other tech companies have long held a monopoly in the on-demand economy.

A new driver's co-op operating in New York seeks to change that dynamic, but it's going to be an uphill battle. The Drivers Cooperative has raised a little over $989,000, with the ultimate goal of raising $1.07 million for its ridehailing service that is owned by drivers, rather than founders, executives and venture capitalists. The cooperative told Protocol that it plans to use the crowdfunded money to further develop the app and increase marketing.

Competitors have tried and failed to challenge Uber and Lyft in the past, but the founders at The Drivers Cooperative are hoping the company's fate will be different from the others. The co-op is banking on the notion that customers want more affordable fares while also doing right by drivers and "doing a solid to New York City," The Drivers Cooperative co-founder Ken Lewis told Protocol.

"I think a sense of fairness is what every person feels when they take the cooperative," he said. " ... We're hoping that if The Drivers Cooperative can show their worth, it will show that everyone has got to share in this economy. That's one of the things we want to put the emphasis on: How can more [money] go to the people at the bottom who make the city move?"

The Drivers Cooperative pays drivers $1.64 per mile, which is higher than the required $1.26 per mile NYC minimum. The Drivers Cooperative also only takes a 15% cut from driver fares, compared to Uber's 21.5% take rate. Meanwhile, the cooperative status gives drivers true ownership in the company, which means they get back some of what they put in.

Each driver-member gets one voting share in the company, Lewis said. Drivers also get points for completing trips, recruiting other drivers, recruiting passengers, attending co-op meetings and more. The points ultimately determine the amount of profit-share each driver gets, Lewis explained.

Lewis, a longtime black-car driver who immigrated to the U.S. from the island of Grenada in the nineties, founded The Drivers Cooperative alongside Alissa Orlando, a former operations manager for Uber in East Africa, and Erik Forman, a union organizer and former member of the Independent Drivers Guild. The IDG formed as a partnership between the Machinists Union and Uber in 2016. Despite Forman's involvement with IDG, The Drivers Cooperative is a separate entity, Lewis said.

A key point of contention in the gig economy centers around whether drivers should be independent contractors or employees. In the case of The Drivers Cooperative, driver-members are not employees, Lewis said.

"I think the contractor or full time discussion is one that will continue because most drivers, of course, love the flexibility of this job," Lewis said. "But I do think that there has to be more responsibility of the company, much akin to what the federal standards are for full-time workers."

While The Drivers Cooperative does not offer drivers health insurance, which is one of the biggest concerns many drivers' rights organizations raise, the goal is to eventually offer that benefit.

"It is definitely a long-term goal," Lewis said about providing health insurance to drivers. "Though we cannot promise health care immediately, we can continue to fight to give workers the right to get those kind of benefits. The whole independent contractor scheme, for instance, has to be readdressed so people who work all these long hours can get benefits. And we will see in any way if it's possible how we can [offer health insurance]. At the moment we're just trying to survive."

Lewis said The Drivers Cooperative's vision is to better support drivers. Even if Uber and Lyft were to change their business models and give drivers ownership of their respective companies, for example, "that would be a big win for us," Lewis said.

In a statement to Protocol, a Lyft spokesperson said, "We're constantly working to improve the driver experience on our platform and share the goals of allowing drivers to work efficiently and independently."

Uber did not respond to Protocol's request for comment.

The Drivers Cooperative is in its early days, having just launched the rideshare app, Co-Op Ride, in late May. Since then, the co-op has amassed 40,000 registered users and 3,400 drivers, and completed more than 2,000 trips. The company is nowhere close to being on par with Uber and Lyft, but Lewis said The Drivers Cooperative "will be fine" even if it only obtains 3% of the market share in New York.

Since the demand is not yet there, The Drivers Cooperative encourages drivers to work for Uber or Lyft as the co-op ramps up.

"As much as drivers support and love the cooperative, if the co-op is not busy enough, we'll have to work with Uber and Lyft," Lewis said.

The Drivers Cooperative doesn't envision completely taking down Uber and Lyft but it does hope to be able to expand the co-op rideshare model into other markets. As the saying goes, Lewis said, if The Drivers Cooperative can make it in New York, "you can make it anywhere."

Lewis added, "This is a free market and Uber has a right to exist, and so do companies formed by workers ... I just think we have to become far more people-centered and worker-centered in terms of how the wealth is spread, and in terms of how riches are distributed."

Fintech

Apple's new payments tech won't kill Square

It could be used in place of the Square dongle, but it's far short of a full-fledged payments service.

The Apple system would reportedly only handle contactless payments.

Photo: Nathan Dumlao/Unsplash

Apple is preparing a product to enable merchants to accept contactless payments via iPhones without additional hardware, according to Bloomberg.

While this may seem like a move to compete with Block and its Square merchant unit in point-of-sale payments, that’s unlikely. The Apple service is using technology from its acquisition of Mobeewave in 2020 that enables contactless payments using NFC technology.

Keep Reading Show less
Tomio Geron

Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. Before that, he worked as a staff writer at Forbes, covering social media and venture capital, and also edited the Midas List of top tech investors. He has also worked at newspapers covering crime, courts, health and other topics. He can be reached at tgeron@protocol.com or tgeron@protonmail.com.

Sponsored Content

A CCO’s viewpoint on top enterprise priorities in 2022

The 2022 non-predictions guide to what your enterprise is working on starting this week

As Honeywell’s global chief commercial officer, I am privileged to have the vantage point of seeing the demands, challenges and dynamics that customers across the many sectors we cater to are experiencing and sharing.

This past year has brought upon all businesses and enterprises an unparalleled change and challenge. This was the case at Honeywell, for example, a company with a legacy in innovation and technology for over a century. When I joined the company just months before the pandemic hit we were already in the midst of an intense transformation under the leadership of CEO Darius Adamczyk. This transformation spanned our portfolio and business units. We were already actively working on products and solutions in advanced phases of rollouts that the world has shown a need and demand for pre-pandemic. Those included solutions in edge intelligence, remote operations, quantum computing, warehouse automation, building technologies, safety and health monitoring and of course ESG and climate tech which was based on our exceptional success over the previous decade.

Keep Reading Show less
Jeff Kimbell
Jeff Kimbell is Senior Vice President and Chief Commercial Officer at Honeywell. In this role, he has broad responsibilities to drive organic growth by enhancing global sales and marketing capabilities. Jeff has nearly three decades of leadership experience. Prior to joining Honeywell in 2019, Jeff served as a Partner in the Transformation Practice at McKinsey & Company, where he worked with companies facing operational and financial challenges and undergoing “good to great” transformations. Before that, he was an Operating Partner at Silver Lake Partners, a global leader in technology and held a similar position at Cerberus Capital LP. Jeff started his career as a Manufacturing Team Manager and Engineering Project Manager at Procter & Gamble before becoming a strategy consultant at Bain & Company and holding executive roles at Dell EMC and Transamerica Corporation. Jeff earned a B.S. in electrical engineering at Kansas State University and an M.B.A. at Dartmouth College.
China

Why does China's '996' overtime culture persist?

A Tencent worker’s open criticism shows why this work schedule is hard to change in Chinese tech.

Excessive overtime is one of the plights Chinese workers are grappling with across sectors.

Photo: VCG/VCG via Getty Images

Workers were skeptical when Chinese Big Tech called off its notorious and prevalent overtime policy: “996,” a 12-hour, six-day work schedule. They were right to be: A recent incident at gaming and social media giant Tencent proves that a deep-rooted overtime culture is hard to change, new policy or not.

Defiant Tencent worker Zhang Yifei, who openly challenged the company’s overtime culture, reignited wide discussion of the touchy topic this week. What triggered Zhang's criticism, according to his own account, was his team’s positive attitude toward overtime. His team, which falls under WeCom — a business communication and office collaboration tool similar to Slack — announced its in-house Breakthrough Awards. The judges’ comments to one winner highly praised them for logging “over 20 hours of intense work nonstop,” to help meet the deadline for launching a marketing page.

Keep Reading Show less
Shen Lu

Shen Lu covers China's tech industry.

Boost 2

Can Matt Mullenweg save the internet?

He's turning Automattic into a different kind of tech giant. But can he take on the trillion-dollar walled gardens and give the internet back to the people?

Matt Mullenweg, CEO of Automattic and founder of WordPress, poses for Protocol at his home in Houston, Texas.
Photo: Arturo Olmos for Protocol

In the early days of the pandemic, Matt Mullenweg didn't move to a compound in Hawaii, bug out to a bunker in New Zealand or head to Miami and start shilling for crypto. No, in the early days of the pandemic, Mullenweg bought an RV. He drove it all over the country, bouncing between Houston and San Francisco and Jackson Hole with plenty of stops in national parks. In between, he started doing some tinkering.

The tinkering is a part-time gig: Most of Mullenweg’s time is spent as CEO of Automattic, one of the web’s largest platforms. It’s best known as the company that runs WordPress.com, the hosted version of the blogging platform that powers about 43% of the websites on the internet. Since WordPress is open-source software, no company technically owns it, but Automattic provides tools and services and oversees most of the WordPress-powered internet. It’s also the owner of the booming ecommerce platform WooCommerce, Day One, the analytics tool Parse.ly and the podcast app Pocket Casts. Oh, and Tumblr. And Simplenote. And many others. That makes Mullenweg one of the most powerful CEOs in tech, and one of the most important voices in the debate over the future of the internet.

Keep Reading Show less
David Pierce

David Pierce ( @pierce) is Protocol's editorial director. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

Entertainment

Spoiler alert: We’re already in the beta-metaverse

300 million people use metaverse-like platforms — Fortnite, Roblox and Minecraft — every month. That equals the total user base of the internet in 1999.

A lot of us are using platforms that can be considered metaverse prototypes.

Illustration: Christopher T. Fong/Protocol

What does it take to build the metaverse? What building blocks do we need, how can companies ensure that the metaverse is going to be inclusive, and how do we know that we have arrived in the 'verse?

This week, we convened a panel of experts for Protocol Entertainment’s first virtual live event, including Epic Games Unreal Engine VP and GM Marc Petit, Oasis Consortium co-founder and President Tiffany Xingyu Wang and Emerge co-founder and CEO Sly Lee.

Keep Reading Show less
Janko Roettgers

Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.

Enterprise

Lyin’ AI: OpenAI launches new language model despite toxic tendencies

Research company OpenAI says this year’s language model is less toxic than GPT-3. But the new default, InstructGPT, still has tendencies to make discriminatory comments and generate false information.

The new default, called InstructGPT, still has tendencies to make discriminatory comments and generate false information.

Illustration: Pixabay; Protocol

OpenAI knows its text generators have had their fair share of problems. Now the research company has shifted to a new deep-learning model it says works better to produce “fewer toxic outputs” than GPT-3, its flawed but widely-used system.

Starting Thursday, a new model called InstructGPT will be the default technology served up through OpenAI’s API, which delivers foundational AI into all sorts of chatbots, automatic writing tools and other text-based applications. Consider the new system, which has been in beta testing for the past year, to be a work in progress toward an automatic text generator that OpenAI hopes is closer to what humans actually want.

Keep Reading Show less
Kate Kaye

Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of RedTailMedia.org and is the author of "Campaign '08: A Turning Point for Digital Media," a book about how the 2008 presidential campaigns used digital media and data.

Latest Stories
Bulletins