Ride-hailing platforms and pervasive forms of capitalism

Platform economy, gig economy, sharing economy, etc., have become buzzwords in the contemporary world. Startup enterprises using web-based platforms have laid the foundation of sharing-based economy. On these digital platforms, everyone can work during the time of their preference and duration.

Companies like the Uber and Airbnb have reached colossal scales globally. Besides, in Bangladesh, home-grown digital platforms such as Pathao, Obhai, Sheba.xyz, etc., have also gained popularity. In the platform economy, ride-hailing service is a booming sector and has had revolutionary impacts on the global transportation system.

The market of ride-hailing platforms

The global ride-hailing market was valued $61 billion in 2018. Due to its increasing popularity the market value is expected to grow up to $218 billion in 2025 and $285 billion by 2030.

Ride-hailing platforms in Bangladesh provide services with car, motorbikes, and CNG auto-rickshaws. PHOTO: MUMIT M

Popularity of the ride-hailing platforms can be gauged from the fact that on average 55 million people hailed a ride using the Uber app during every month of the second quarter of 2020. By the next three years, more than 100 million people are expected to use ride-hailing services in a monthly basis globally.

Reuters reported ride-hailing industry accounts for 23 percent of the transportation sector of Bangladesh. Over seven million rides are recorded every month in the ride-hailing platforms that operate in the country. Policy Research Institute predicted the value of this sector would reach $1 billion within the next five to seven years from its value of $260 million in 2018.

Ride-hailing platforms in Bangladesh provide services with car, motorbikes, and CNG auto-rickshaws. With the ride-hailing platforms, commuters are at ease with finding transport, doorstep pick-up, and fare estimation. These platforms appear to provide a smart solution to the transportation problem of the country.

These digital platforms in a way empower the consumers, giving them opportunity to avail services that were not otherwise available. On the hindsight, ride-hailing platforms have created employment opportunities for thousands, for instance, over five million users and more than 200,000 drivers registered to use Pathao in 2019.

However, if we look at the working conditions that these platforms have warranted, it will appear as a pervasive form of capitalism.

The business model

The digital platforms serve as a medium of contract between consumers and those able and willing to work freelance. For instance, the ride-hailing platforms enable those having a car to share the ride with someone for a payment while travelling towards a destination. By sharing both are benefitted.

Platform companies enable continuous hiring of workers to perform tasks as "independent contractors" – as services are requested on their digital platforms. In a way the availability of the platforms has reduced the need for full-time employees. Workers are paid for completing every task rather than a fixed salary like employees on payrolls.

In theory, it works well for both parties, i.e., drivers and riders for instance. In lieu of coming to work every weekday and following orders, drivers enjoy flexibility and predictable pay, and riders can request rides without having to maintain a fulltime driver or a vehicle. As more workers, i.e., drivers and customers sign up– the platforms become an efficient medium of exchanges.

This business model allows companies to run without owning or leasing any vehicles. They do not even require employing any drivers. They connect customers with drivers through their platforms. In other words, they are the intermediaries in a two-sided market of workers and jobs.

Transferred burdens

One of the unique ingenuities of the platform economy is that the "employees", i.e., the drivers for instance hardly receive any on the job training and must invest on the tools and equipment, i.e., vehicles. Platform employers do not supply or protect any such investments.

For example, product delivery and ride-hailing platforms require the riders (i.e., employees) to own their personal vehicles. During the Covid-19 shutdown, these investments have become liabilities for the employees. This is an important aspect, as investment risks shift to the individual from the organisation.

Lesser investment in the infrastructure allows the platform companies to on and off their businesses abruptly at will. Recently, UberEats has announced cessation of operation in Bangladesh – jeopardising many of its workers' future.

Coercive nature of the platforms

These platforms do not limit work hours of a driver. Besides, to gain popularity and edge over competing companies, ride-hailing platforms give incentives and persuade drivers to work longer hours.

With provisions of benefits with increased numbers of services provided within a timeframe, the platforms coercively engage workers to drive for awfully long hours. Thus, there is possibility of fatigue and increasing risks of accidents.

This tactic result into the absolute increase of surplus labour time for the ride-hailing platforms. The more a platform is being used the more profit is generated for the platform owners, as they earn a 25 percent share/ commission of the total fare of any ride.

The platforms get waiver from responsibilities

The platforms through their terms and conditions get a legal waiver from any obligations to the transportation providers (i.e., drivers) or the users. They set themselves only as intermediaries between the two parties. The existing terms and conditions that the platforms require both drivers and users to agree differentiate them from taxi services.

The drivers and the passengers remain responsible for their own action and the mediator, i.e., the digital platform is waived from any sort of responsibility. One of the reasons why platform-based sharing services adopt the contractor-based model is because it keeps the cost of business low. But from this modality of work, many risks appear for the drivers.

These workers are treated as if they are into a zero-hour employment contract. In the long-run, they endure lack of fair pay, inflexibility, no fringe benefits, and occupational safety and health risks. They are also more stressed because of constant evaluation.

Time-space compression

Time-space compression is an essential feature of capitalism as argued by David Harvey in in The Condition of Postmodernity. He argued capitalism as a process of production and distribution needs continuous expansion. This requirement alters the qualities of and relationship between space and time – for recruiting more labour and setting up more market.

Ride-hailing platforms are epitome of capitalism's time-space compression. The technological innovation has elided spatial and temporal distances. For instance: Uber – a US based technology company, registered in the Netherlands runs all over the world without any such infrastructural investment. In its contemporary form, the digital platforms exist not materially but digitally via programming.

Innovative technology has allowed a capitalistic form that made the entire world its market. Hence, the platform economies as such have overcome spatial barriers, opened up new markets, speed up production cycles, and reduced turnover time of capital.

Structural inequalities ensued by a neoliberal capitalist approach to economy appear normal in the business model of the platform economies.

Mohammad Tareq Hasan is an anthropologist and teaches at the University of Dhaka.