Uber reveals strong growth, huge losses ahead of IPO (copy)

FILE- In this June 21, 2017, file photo a man walks into the building that houses the headquarters of Uber in San Francisco. 

There's obviously no turning back now. The marketplace has spoken, and ride-sharing companies like Uber and Lyft are here to stay.

Gone, though, are thousands of middle-class wage and benefit jobs that taxi drivers, particularly in the big cities, held down since the advent of the automobile.

Some of it was their fault. Cab companies have always been notoriously bad in the public relations department. Customers weren't always treated well and making sure cabs were clean and odor-free was never on the top of the list. And they were notoriously slow at keeping up with the times. How many years went by, for instance, before they accepted credit cards that were already ubiquitous everywhere else?

But in this era of the ever-widening wage gap in America, as the rich get richer and the poor poorer, the Ubers and Lyfts of the world are giving us another lesson in why that's so.

Next month, Uber will make an initial public stock offering — or IPO, as Wall Street calls them.

The bright young techies at the top of the company will come away millionaires and a few, billionaires, and a whole bunch of Wall Street money manipulators will cash in. Following the IPO, the ride-sharing outfit that has flouted local laws and regulations to give itself an unfair advantage over cabs is expected to be worth a record $100 billion.

Among the lucky winners will be Uber's founders (one of them, the notorious Travis Kalanick, already collected $1.4 billion by selling one-third of his shares when he was forced out of management), the Japanese conglomerate SoftBank, the Saudi Arabia Public Investment Fund, mutual fund giant Fidelity and other venture capitalists.

Not so lucky are the thousands of Uber drivers who use their private cars to pick up and drop off people who once used taxis and then share the fares with Uber corporate.

Even the greediest financier should agree it isn't fair.

Where union-represented cab drivers of old had health insurance and pensions, Uber drivers are classified as "independent contractors." They get no benefits and each April 15 have to pay taxes on the money they earned, since there isn't any withholding to make it less painful.

In a business section story earlier this week, the New York Times reported on this disparity by interviewing a number of Uber drivers who are starting to feel left out.

Among them was a driver who has been with Uber since it was founded in 2012. He has made more than 25,000 trips in those years. Peter Ashlock's Nissan Altima has 218,000 miles on it. His passengers, the paper says, give him 4.93 out of five stars. Yet, his adjusted gross income for 2018, his best yet, was roughly $40,000. He has had to max out his credit card for car repairs and he needed to come up with $5,000 to pay taxes on April 15.

A former cab driver himself, he says Uber's biggest innovation, far as he can tell, is getting the drivers to pay the overhead instead of the companies.

Ashlock told the Times that he's proud of his high rating from his customers, even though he's not making much of a living.

His favorite review from his passengers?

"Dude drove like a cabdriver."

Dave Zweifel is editor emeritus of The Capital Times. dzweifel@madison.com608-252-6410 and on Twitter @DaveZweifel.  

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