5 things you didn’t know about Uber

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.

4Uber’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

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32 Responses to “5 things you didn’t know about Uber”

  1. Albee Doh

    Drivers who “speak out for themselves” get “deactivated,” a very Orwellian “Doublethink” tactic for firing people under the false pretenses of euphemistic jargon.

    Perhaps you should visit independent driver forums to see just how “happy” a growing number of drivers are with the way they are being treated.

    And do the math:

    – 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 pay and working conditions are terrible.

  2. Puddle

    So now you’ve moved on from parroting Uber’s propaganda to making strawman arguments – nice!

    No-one’s afraid of contrary opinions Samuel, but the spreading of false information gets incredibly tiring to read.

    I accused you of ignorance not for failing to be left-wing (stop being so melodramatic) but for failing to understand why cabbies and others are in opposition to Uber. As I stated, it has entirely nothing to do with supposed phobias against innovation and competition which is merely Uber propaganda – a point your article fails to refute BTW which shows you clearly still don’t comprehend what the issue here is.

    You’re simply blowing hot air at this point.

  3. Albee Doh

    You are ignorant of this issue. You just like the cheap “too good to be true” fares and simply refuse to face the Uber reality.

    – Look at what Uber charges in any given city.

    – Deduct Uber’s take (20-30%, depending on locale).

    – THEN deduct the operational costs of the job (in the US the IRS allows for $0.56 per mile, based on data culled from three decades ago; AAA claims that actual current costs are well north of this figure and as high as $0.85 per mile for many vehicle types).

    In many cities Uber’s rates are below the actual cost to operate.

    Also, though Uber states that you can make your own hours you can only make money on this job during specific hours and during “surge” spikes, which only occur during specific times primarily on certain days. Drivers in most cities cannot meet costs if more than half their rides do not have surge pricing attached.

    Uber POOL is even more insidious and is a trick the company pulls of drivers to dupe them into doing more work for little or no pay at all, often even tricking drivers into taking a loss.

    Uber does not allow drivers to know the rider’s destination until AFTER the rider is in the car, which is when Uber states the fare is allowed to begin. Because of this drivers are coerced into taking many $4 fares that, after calculating costs, net them pennies at most and even often end up costing them more than they make. This is especially the problem in college towns where short rides are the norm.

    The whole operation is a scam – and you are complicit in it.

  4. Albee Doh

    Exactly.

    If Uber is such an awesome job then why is the turnover rate so massively out of proportion? The “bridge job” rebuttal simply doesn’t hold up given the volume of drivers who leave.

    And why are reputable financial advisers warning people off Uber stock when it finally IPO’s? BTW, Uber planned to IPO this year but has now postponed that move.

  5. Samuel Hooper

    What you peevishly call “making strawman arguments” I call making a broader point – as would you, if it didn’t prick your left wing sensibilities quite so much.

    What false information have I spread? And are you seriously telling me that black cab drivers hate Uber out of an overriding concern for the welfare of Uber drivers? Get real. That’s hilariously naive. They are fat, lazy, haven’t come up with an innovation of their own in nearly a century, and are terrified that their archaic, closed industry is about to meet the fiery end it so richly deserves.

    THAT is why black cab drivers – and their politician cheerleaders – hate Uber. I never contested the detailed points other commenters have made about how working for Uber can be a bad financial choice. But most Uber drivers I have spoken with aren’t making a career out of it, they are doing it for awhile en route to something else, something more lucrative. The point is that it is a choice which free economic agents should be free to make.

    Paternalistic lefties like you, on the other hand, always feel the need to step in, because you are so much smarter and know what’s best for the Uber driver better than he or she does. Get over yourself.

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