Cheap taxi rides come at the cost of employment rights and fair pay for drivers
Taxi-hailing app Uber has been taken to the High Court by Transport for London (TfL) to determine whether it is lawful. TfL has also announced a public consultation on better regulating the service, with proposals including English language requirement for drivers and stricter controls on insurance.
Uber says this will damage public interests – but doesn’t care so much about the interests of its drivers. Here are five things you didn’t know about Uber:
1. It asserts that its drivers are ‘partners’, meaning they are not entitled to normal worker’s rights. Uber has contested claims that this is exploitative, claiming that it is allowing its drivers to work as independent contractors in the spirit of entrepreneurship.
Currently an Uber driver does not have rights to holiday pay, or the right to properly challenge a discipline or grievance notice before being dismissed. There have been reports from drivers that they have been dismissed for making complaints about unfair treatment.
2. If a driver’s rating falls below 4.6 or 4.2 (there are varying accounts) they risk being sacked (or ‘deactivated’ to use the Uber euphemism.) There is no way to properly regulate ratings and protect them from the caprice of a customer. If a driver pick up a passenger who wants a conversation and their English isn’t great, or a passenger in a bad mood, or a passenger who wants help moving house, they are risking their job.
3. Uber deducts a fifth of a driver’s income, which is already low. According to the GMB Professional Drivers’ Union, a GMB member who works exclusively for Uber in London was paid £5.03 net per hour for 234 hours driving during the August calendar month. This is £1.47 per hour below the current national minimum wage of £6.50 per hour. For each hour he worked, he paid £2.65 to Uber, equating to 53 per cent of his net pay per hour. GMB has urged all Uber drivers to keep detailed records of the pay they receive.
Many Uber drivers are recent immigrants with poor English which may prevent them from getting other work in the UK, and which means they are not familiar with pay law. Far from offering freedom, the Uber business model exploits people who cannot get better jobs.
4. Uber’s tax arrangements are highly contested. Uber processes its jobs through its Dutch subsidiary, Uber BV, which allows Uber to charge a lower VAT rate. The Dutch VAT rate is Dutch VAT is 0 per cent for entrepreneurs conducting foreign businesses from the Netherlands; in the UK it’s 20 per cent. This allows Uber to offer super-low prices.
5. There are no limits on the number of cars Uber can operate. The company says it currently has more than 15,000 drivers in London, and its chief executive Travis Kalanick has said he expects that to rise to 42,000 in 2016. Not only does this have implications for London’s already terrible air quality – a TfL- commissioned study found that nearly 9,500 people die each year in the capital because of pollution – it means there will be less and less work for drivers who have made Uber their full-time job.
Uber is also ruining the livelihoods of other drivers. Over a two-year period, roughly coinciding with the explosion of Uber in London, the number of minicab companies has fallen by 5 per cent. Uber is so much cheaper than black cabs and private companies that people who have worked their whole lives as drivers no longer have a chance. It is true that other taxi companies need to reconsider their pricing, but the Uber boom happened so quickly that they were caught off guard. Plus, Uber cannot take the moral high ground on affordable taxis when they operate theirs on the backs of unprotected workers.
Ruby Stockham is a staff writer at Left Foot Forward
32 Responses to “5 things you didn’t know about Uber”
Samuel Hooper
Wherever there is innovation and a great leap forward for consumers, there is an angry left-winger trying to stop it and hold humanity back, piously “defending” people like Uber drivers – smart, autonomous people who are more than capable of speaking out for themselves and managing their own affairs.
http://semipartisansam.com/2015/09/30/politicians-against-uber-taxis-are-against-working-londoners/
Have you been in a black cab lately? That is one industry – and one group of cosseted, over-protected “workers” – which is ripe for some disruptive innovation.
Richard
This is the stupidest article I’ve ever read.
Try this one on for size: I was on an Uber ride recently, and the driver told me that he used to be a taxi driver and had to pay 800 per WEEK just to have the “privilege” of driving a beat up old car. He said that in order to actually make a living, he had to drive upwards of 60 hours per week. Now he drives his own car (which he pays something like 500 per MONTH to OWN), and told me that he finally gets to see his kids on the weekend.
In other words, if you think Uber is bad, just look at the garbage it is replacing.
Puddle
Yawn, please stop parroting Uber propaganda. The issue has nothing to do with “innovation” or competition – there are multiple smart phone apps for black cabs, ‘Hailo’ and ‘Gett’ being the top two and the black cabs have been competing with public transport and minicabs for several decades.
Just an FYI: Uber drivers in LA are going on strike over their pay being decreased year-on-year as well being in opposition to Uber’s questionable business practices.
If you can’t wrap your head round the issue properly Samuel, then the polite thing to do would be to refrain from commenting – cheers.
Samuel Hooper
Yes, heaven forbid the readers of Left Foot Forward have to encounter a contrary opinion once in a while, eh “Puddle”? Much easier to assume that because I disagree I am ignorant.
If you actually want to debate me rather than wagging your finger and being all smarmy, then you can read my full rebuttal to Ruby Stockham’s piece here:
http://semipartisansam.com/2015/10/02/the-uber-wars-will-the-left-ever-fight-for-consumers-over-special-interests/
“Cheers”.
Albee Doh
The Uber driver you’re referencing hasn’t done all the math on his total costs.
– Given the number of hours he is working and the miles he’s accumulating he will take a total loss on the value of his vehicle in about a year.
– Virtually none of the regions Uber operates in have insurance policies that cover drivers when there is no rider in the vehicle. You need to look into “gap” insurance and why it isn’t available for most drivers.
– If your driver gets in a wreck without a rider on board his life will also be wrecked.
– Uber, despite claims, will not reimburse drivers for most damages resulting from riders. They state that this is on the drivers’ insurance. See above for why this isn’t working out.
– 100% + of all operational costs are pushed onto the drivers. The “+” is in the form of the “complimentary” extras Uber touts as being part of the 5 star service that drivers are threatened with possible deactivation if they don’t provide. Riders are not aware of the fact that Uber cons drivers into shouldering all costs, INCLUDING the extra data charges that the apps run up. In fact, riders are not aware of the fact that Uber pushes all costs and risks onto the drivers, who end up netting well below minimum wage, in virtually all of Uber’s markets, after calculating for costs and taxes.
– What Uber does is prey on trusting, unsuspecting newbies by deceiving them into thinking they are making lots of money. But by intentionally hiding the costs and intentionally lying about the insurance issue they are merely pulling a fraudulent scam on them.
Just do the math yourself:
– Look up what Uber charges in any given city.
– Deduct Uber’s take (20-30% depending on locale).
– Then deduct what the tax board in a given country claims it costs drivers to do the job (in the US the IRS allows a maximum of $0.56 per mile deductible for operational costs, but this figure is based on data from the mid-80’s).
The earnings Uber touts is total BS. In most cities Uber drivers would have to drive 2000 miles a week or more to pull the earnings (before taxes) Uber claims.
Before you go labeling people stupid perhaps you should try the job yourself and see what it actually pays and just how much the company bends you over to do it.