An Economy of Taste: the case of Uber in Bulgaria

Nearly everywhere the operations of Uber have generated controversy. For example, Uber sparked mass protests of taxi drivers in France demanding that the service be discontinued. In contrast, when the Bulgarian Commission for the protection of competition (CPC) fined, and ordered Uber to stop operations in the country, citizens protests erupted in defense of the service. More than 20,000 signatures were collected on Uber’s official web petition in three days. Angry facebook posts abounded. So did articles denouncing the shrinking of the “right to choose”. Meanwhile, the ban on Uber has generated discontent not only among distressed consumers but also among the traditional taxi companies. This is not because they truly believe in the benefits of competitive and deregulated markets, but because the ban, and the new legislation that followed it, strikes directly at the heart of today’s organization of taxi transport.

My aim in this article is twofold: to analyze together questions of taste in the so-called “information”/ “sharing” economy and the changing nature of exploitation in the post-industrial condition. These issues are seemingly disconnected but I hope to show that taste rises in importance in a context where “the right to choose” increasingly becomes a right to choose among identical options.

To make this clear, let us look closely at the decision of CPC to ban Uber. The Commission’s attention was directed to Uber’s alleged unfair competition practices by two main actors: one of the largest taxi companies in Bulgaria and the Sofia municipality. They claimed that Uber’s operations are unfair because its drivers do not go through the same elaborate licensing and regulatory procedures like ordinary taxi companies. Uber naturally discounts responsibility because it (rightly) claims that it does not actually offer any taxi service at all: it’s just an app which connects people with cars to people without.

When the high court of appeal affirmed the decision of the Commission, and Parliament followed suit with new regulations, this struck terror at the heart of the traditional taxi companies because one of the fair competition rules Uber was accused of breaching was the lack of labour contracts for the drivers. In the drive to enforce “equal competition” Parliament decided that taxi companies should behave like other companies, offer labour contracts, and not skip payments of social security, health benefits, and so on. So, the new legislation mandates that all taxi drivers must have labour contracts. The upshot is that very few taxi companies hire anybody. Thus, despite the self-congratulatory rhetoric of Uber (and others like it, such as Airbnb) about the importance of new technology for the provision of services, taxi companies have already become like Uber, even before it came on the scene.

For example, a typical Bulgarian taxi driver is not given a labour contract but has to register their own company. Then he or she gets to buy their vehicle (or is paying monthly installments to the bank for it). Usually the company they purchased the car from is the same one they work as a taxi driver for. Taxi companies, in this respect, are more like auto-dealers and quasi credit institutions (because a new car is beyond the means of any aspiring taxi driver, so the cars are often leased) and logo-patent holders, the rights to which they give to the drivers against a fee. Just like franchise. Drivers also have to buy the meter, GPS, tablet, and whatever gadgets are considered mandatory for a present day taxi, buy insurance, shoulder the costs for servicing the car, find clients and markets, etc.

This is nothing new. Business practices such as franchising, outsourcing and subcontracting have been for some time transferring risks away from multinationals onto subcontractors. In this way, they have been complicating “traditional” relations of production wherein capital-owners exploit the propertyless who have nothing but their labour to sell. Today exploitation seems to proceed via (debt-financed) ownership over the means of production: be it a laptop (for the “creative worker”) or a car.

A taxi driver is an entrepreneur who takes risks and liabilities if something should happen to their capital (the car). As “entrepreneurs”, the drivers enjoy the freedom to determine their own working hours because no labour contracts exist to set up any limits on them. Yet, despite the fact that labour shares more and more presuppositions with capital (e.g. we are constantly encouraged to treat ourselves as entrepreneurs, for instance, every life decision is spoken of as “investment” such as “investing in our education”), this does not annul the fact of exploitation. And no amount of “be your own boss” ideology can paper over the fact that exploitation is compounded by the transfer of risk from the entrepreneur-boss onto the worker-entrepreneur.

There are implications for the state budget as well: the companies do not declare any profits from taxi service (because, just like Uber, they formally do not supply any such services) and are paying zero tax. They also do not exercise any oversight on whether the drivers are paying their social security or not. Nor do they pay any social security because they do not hire anybody. This results in millions in losses for the budget.

If Uber is not the purveyor of this form of economic relations, then how can we explain the wave of support the application commands among its users?

My explanation is that the determining factor is purely aesthetic. To paraphrase Marx, between equal things, the symbolic force of taste decides. For example, a pro-Uber protester thus explained the difference between traditional taxi and Uber: “In Uber there is no chalga [Bulgarian turbo-folk] or maane [gypsy-type of turbo-folk].” In Bulgaria chalga is a frequent target of criticism by the cultural elite. Chalga is the synonym of all that is low, undignified and revolting. The fact that it is a popular music genre convinces intellectuals that Bulgarians are incapable of managing the country; that voters are immature captives of a fundamentally un-European mentality that is derailing our efforts to achieve a working democracy and is taken to be the chief reason why the Transition to market economy did not deliver as expected. A musician even called chalga “the contemporary communism”. Naturally, every self-respecting member of the creative class despises this genre.

Further, disgruntled Uber-users resent traditional taxi-drivers for their supposed lack of manners, for being grumpy, for listening to turbo-folk, for smoking in the car, for their dirty cars, for the mandatory tipping. By contrast, Uber transactions are ‘lean’ and do not involve any physical transfer of cash. Also Uber mandates its drivers drive relatively new cars. Further, unlike the traditional taxi, Uber cars are not designated with the mandatory yellow color. This satisfies the need of the customer to feel he or she is in someone’s personal car (even though the taxi car is also personal car, albeit the difference here is that it looks more inauthentic and standardized because of the yellow paint and the taxi signs). This ties well with the emerging niche markets catering for “authenticity”.

Let us take another example, Airbnb. In this service, tourists can satisfy their desire for tourism-free tourism. They are not tourists but “guests.” Meanwhile, the hotel accommodation is not the typical hotel, it is someone’s “home”. In the “sharing economy” you are not a tourist, you are a “guest” in your “hosts’” “home”. In Uber you “share” a ride, the lack of physical transfer of cash must reinforce the non-market appearance of this relation. Also, it is more fun to use your smartphone to order a car instead of the traditional ways of calling a taxi dispatcher and risking the possibility of him or her asking for more clarifications about your destination.

Not coincidentally, a pro-European political party and government coalition partner of the Reform Bloc (RB), which claims to represent precisely the “creative class”, and which, to this day had never been active in transport legislation, rose in defence of Uber and made a pledge to form a working group that can formulate legal ways for Uber to continue operating in Bulgaria. Being the good pro-big business party they are, RB argued that the Court should not have banned Uber-the-app, but should have penalized only the drivers.

The legal quagmire awaits its resolution. The state banned Uber because taxi companies, worried over unfair competition from Uber, pushed it to do so. But in the process the state wants to enforce legislation that will make the taxi companies discontinue the subcontracting practices and hire their drivers. The companies explicitly defy the regulations; they openly state they will not hire the drivers, and are rising in a protest the desired outcome of which can be also advantageous to their hated competitor Uber. And all this points to the limits of purely aesthetic determinations on business governance. If it was possible before Uber to have the ugly-chalga taxi companies, the state has to find a way to legalize beautiful-Uber and offer equal conditions for all players. The only problem is that in doing so, given the record of the mad neoliberal race to the bottom so far, the common denominator might be the lower standard; that is to say, labour contracts might be out of the question for good and the practice of worker-entrepreneurs will be fully entrenched.

Originally published on Nov. 2, 2015 in Croatian on Bilten: http://www.bilten.org/?p=9921.