Thanks — actually that’s been our whole strategy. Make a lot of friends and go after the bully.

Yeah, every day brings new lessons. My co-founder Alissa likes to say the learning curve is 90 degrees. I guess I could speak mostly to how I came into the project. My background is in the labor movement. I spent fifteen years trying to unionize different workplaces and getting fired a lot in the process. Which is what happens when you’re working with the IWW, trying to unionize the U.S. fast food industry. I was very involved in campaigns at Starbucks and Jimmy John’s — this is in the years before the “fight for 15.” So that was when only really crazy people like us were trying to take on these issues.

I learned a ton from doing that. And I would say we certainly made some gains. But for the amount of effort that went into these unionization campaigns, the gains were kind of minimal, pennies on the dollar in terms of raises, some improvements certainly in our worker power on the job. There are a lot more valuable intangibles — empowerment, solidarity, cultural change — but I had to be honest with myself that we hadn’t gotten as far as I’d hoped.

I took a bit of a break and traveled around, doing a lot of organizer trainings for unions in other countries. I moved to China for a little while and was involved in labor over there.

Then I came back to New York, became a teacher, and was involved in that union. Reflecting on my experience as a labor organizer, one of the things I kept thinking about was how workers would come to you and say, yeah, we need a union. And most people did in the abstract support that idea. But I was also hearing a lot of people say, I want to start my own restaurant or I want to open my own school. What I realized was that many working people want to own the place that they spend most of their waking lives. I really started to think — maybe we can change the world not just by fighting employers, but by creating better ones.

From that dimension, I got involved in the labor movement originally from the anti-war movement, because I was interested in broad and deep social change, which the labor movement has not really been at the forefront of in the United States, except perhaps at its best moments. For the most part, it’s been boxed in by employers to bargaining over a very narrow scope of bread and butter issues.

So I started thinking about worker ownership as a different strategy for worker empowerment. I think that’s something a bit unique about The Drivers Cooperative: it’s a very worker-centric organization, as you would expect from a co‑op. And it has to be in order to do what we’re trying to do. So that was my journey, more or less.

Sure. For example, we involve drivers in every single major decision in the company. Personally I don’t even have a share because I don’t make my living driving for hire, and I’m the person who has been involved the longest. In a normal startup, the founders hoard ownership. We decided to distribute equity to as many drivers as possible. Staff don’t own shares, but we are incorporated in the co‑op’s profit sharing plan, and a vote for representation on the Board of Directors.

Yeah, I think we’re close to that. We had to pause issuing shares because we were applying for minority enterprise status and they need a snapshot in time in order to grant that. So if we continued issuing thousands of shares, it wouldn’t work, but we have about 3,800 drivers in the pipeline to become owners.

You asked about the worker democracy aspect of it. We’ve put a lot of thought into developing a structure. I don’t know if we got it right but we built in flexibility so it can change over time. We have a multi-stakeholder board of directors on which we have represented drivers, staff, and outside advisors who provide a third party perspective. No one group has an absolute majority so they have to compromise, which we think is necessary.

Because with the marketplace business like this, you have different stakeholders that all need to be satisfied in order for the business to function. If you orient your business only around what riders want, you end up with something which looks like Uber, which is extremely exploitative of drivers. And with Uber, it’s not even oriented to what riders want: it’s oriented to what outside investors want.

So I think that as time goes on, we’re probably going to diverge more and more from the Uber business model. Because, at our core, we’re based around a different set of interests.

Yeah, now we have a second board, a “Driver Board,” which is entirely elected by drivers, which deals with exactly that. So if a driver gets in trouble with a customer complaint, that gets adjudicated by a board which is like an elected jury of their peers, essentially. Which is really different from Uber, which deactivates people by algorithm. And you end up with a lot of specious customer complaints. So those are a couple of our differences.

Yeah, we drew on a couple of things. I was involved in starting another cooperative, a coffee catering company which is still operating. And we had kind of a template from that, although it wasn’t a multistakeholder one.

The other example we looked at was what are called black car bases [i.e., pre-arranged transportation contract companies — ed.] in New York City, the ones that were unionized, had like a driver board which dealt with customer complaints. We adopted that structure and tweaked it to make it more democratic. What tends to happen in these cases is that a group of drivers in these positions become like a set of bosses. So our board positions have term limits, they rotate.

We also have quotas for representation, because another issue is inter-ethnic conflict in the industry. And our members can organize a plebiscite if they feel they’re not being represented.

Yeah, so the tool that we’re using to scale is federation. As soon as we launched, we started getting inquiries from drivers all over the world asking when are you coming to my city. And we’re still figuring out that model.

But, when you think of Uber and Lyft, the platform economy takes a colonial approach to growth, where these companies go in and disrupt an industry by destroying local businesses. Including local taxi cooperatives, of which there actually are not too many — less than a dozen taxi cooperatives across the country.

So we’ve been reaching out to the taxi cooperatives to see if we can find a way to work together. Interestingly, it wasn’t a taxi co‑op in the U.S. that reached out to us first, but one in Italy which reached out to us looking to collaborate.

So we formed our first strategic partnership with a co‑op called Cotabo, which is in Bologna. When their riders come to New York, if they’re using the Cotabo app, they get a link to download our app. When our riders go to Bologna, we encourage them to use Cotabo. So we’re planning to basically expand that into a worldwide web of local cooperatives, providing transportation. We’re developing technology right now, which we’ll be able to share.

I think we have a pathway to creating a real global driver-owned alternative to Uber and Lyft. If we can do it will be quite amazing. And there’s not really much standing in our way at this point. Except, it’s just a lot of work, a lot of things to work out, a lot of relationships. But you know, the interests among all the different players are aligned.

It was an extreme struggle to raise the capital to get this thing started. It took literally a year from when we incorporated and began pitching funders to the point where we actually started getting investment. That was the biggest speed bump for us.

But we’re very grateful to the partners that invested in us early on. Shared Capital Cooperative has been our biggest investor, and we’re very grateful for their support. They gave us a term loan which is not typically how startups are capitalized. But we made it work. To start a business like this, you need millions of dollars and that kind of capital just isn’t really available in the co‑op space.

But we’re hoping it will be eventually and our success will bring a lot of resources into this ecosystem. And we’ll use them to help start more co‑ops.

We were able to raise enough money to launch through a combination of grants, co‑op loan funds, like Shared Capital Cooperative, Leaf invested a small amount, Start.coop invested, the LES People’s Federal Credit Union invested. It was all a big, very big help. We got some grants from the Emergent Fund and the Workers Lab which allowed one of our co-founders to repurpose an existing grant to support the project.

Yeah, after the launch in May 2020 we were under a lot of pressure to break even immediately. We got incredible momentum from our launch — something like 40,000 riders downloaded the app, we grew from 2,500 drivers to nearly 4,000. We actually stopped onboarding drivers in order to build up our systems to be able to absorb that many members. We’re about to restart our membership drive now.

We saw we couldn’t use traditional venture capital, because what they want is ownership, and we’re a cooperative, so drivers need to own it. You could get loan funds, but loans are not very patient capital as they are traditionally structured.

So instead, we created a royalty-based financing instrument and combined that with regulation crowdfunding. So we basically leveraged the momentum we had from the launch in order to fundraise our next round.

So we were trying to raise $1.07 million and we met that goal. We crowdfunded over a million dollars which is mind boggling. I think it shows you the hunger that people have for change and for new ways of organizing our economy. So we’re putting that capital to work right now to build up our operations.

It’s difficult to compete with Uber at scale in their largest market [New York City — ed.]. We’re kind of taking it in stages. Right now we’re emphasizing our pre-scheduled business — which Uber also does as a kind of a sideline but it’s not their main offering. So we’re going to be doing things like medical transportation, and providing trips in the Access-a-Ride program. And these are all opportunities to positively impact drivers. Because we’re competing, and every player we’re competing with, even the smaller ones, is taking a big slice of revenue. So whatever we do, by comparison, it’s putting more money in drivers pockets. So those are some things that we have in the works.

Yes, that’s one of the things I’m happiest about. Because one of the problems drivers have is that their income is determined not just by what’s left over after Uber and Lyft take their cut. It’s also by what’s left over after they pay all their expenses.

The industry is structured around an owner-operator model where drivers have responsibility for their own vehicles. So 91% of drivers in New York City are immigrants who don’t often have a long credit history. You hear horror stories about drivers being duped into really bad deals. They get long repayment terms at very high interest rates, an APR of 20% for a car loan. It’s typical that a driver will spend $75,000 on a $25,000 Toyota Camry, just because of these predatory financing arrangements.

And so in New York, at least, the banks don’t like the credit unions, of course. They box them in with regulations, so they can only take on members of specific membership groups or catchment areas. We were able to work with one really wonderful credit union here, the Lower East Side People’s Federal Credit Union. We became a partner organization of theirs, which allows our members to join theirs.

So we have a member driver who went from paying $1,900 a month to paying $500 a month for his vehicle. It meant that he was able to go back to his home country and get married. It was life changing.

We also have a whole purchasing co‑op side that we’re planning to build up to help drivers reduce their expenses, and also to invest in things like electric vehicles which we expect will be coming in the New Year.

Well, 40,000 riders, 3,800 drivers, thousands of trips. I’d say it’s been difficult for us to fill the on-demand trips, mainly because, although 3,800 sounds like a lot, in New York City we need more. We need to bring out more drivers because of the big geographic area. When someone requests a trip, what you want is the likelihood that a driver is both nearby and available. As a result, our fulfillment rates so far have been lower than we wanted. But we’re continuing to move the needle on that.

Yeah, we’re now at about 60,000, actually.

Yeah, it’s a lot of plates in the air! And the other thing we’re doing is engaging members and forming a policy agenda for the industry. So we’re gonna have a whole advocacy side, which might seem unusual. But if you think about it, this is exactly what Uber and Lyft do. I mean, they’re spending enormous amounts of money on trying to get laws changed. So we need to be active in that arena as well.

Yeah, yeah, it’s a predatory industry, very cutthroat, and it needs systemic change. I think co‑ops can raise the ceiling in an industry, we can be the best company that can exist within the given structures, but you need some form of organizing advocacy or unionization and regulation to raise the floor. So we’re looking at that as a strategy as well.

We just kicked off what we’re calling an organizer fellowship program. We have members who will receive a stipend to take a day off from the road each week, in order to play a leadership role in the co‑op. To get involved in education and outreach and organizing. We’re in a process now with our policy committee, which is open to all members and is a volunteer group, to discuss a list of issues that our surveys tell us are the most important to drivers. And so we’re starting a process of education about each issue area in order to create a policy plank.