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”
JayUKChelsea
there are no doubt swings and roundabouts – it is about improving on this innovation, not stopping it – world it moving on – its 2015, no longer the world of 1980-2000 – new things happen, got to adapt and maybe unions innovate too?
Albee Doh
Enter the KIA that starts down the path of baseless assumptions.
Here’s a fat dose of reality: I’m not now and I have never been a cabbie nor have ever owned a medallion.
Before I continue, I have to ask that since you claim to value the service so much for its ease of use, quality/kindness of service from drivers, and low cost, do you tip these drivers to show how much you appreciate them? Or do you conveniently rest on the BS claim by Uber that tipping is unnecessary? Seeing as how you also claim to know so much about the company and service you must be aware by now that Uber lied about gratuities being factored into fare costs and that they didn’t bother to tell anyone that the drivers pay for the “complimentary” extras like water, snacks, and device chargers (which they threaten deactivation against drivers for not providing). Sweet deal, eh?
The reason drivers tell you these things is that they fear “deactivation.” They worry that if they say anything negative about the company to riders they will get stars taken off and/or be reported to Uber. They sing praises out of fear and since many drivers don’t have other sources of income and are increasingly represented by immigrants the fear is very real. Many drivers have been permanently “deactivated” (meaning fired) for speaking up and taking a stand. This isn’t anything new. Historically, this has been a tactic used by employers: “don’t like the way I treat you? Fine, YOU’RE FIRED!”
Peculiar how you invoke the “consumer side” yet fail to acknowledge that drivers (and all workers in a market economy) are also consumers.
You’re also very wrong about the driver’s side of the income equation. Cabbies, at year’s end, have fewer expenses and are not taking a loss on their own vehicles. Also, as more and more Uber drivers file taxes the truth keeps coming out and proving that they are making much less than cabbies. That’s a fact.
Your “2+ years” claim is bogus. The vast majority of drivers quit in three to six months in the majority of cities in which Uber operates.
As for the future, Uber is getting in deeper and deeper trouble. The court cases are mounting and people within the company are now being arrested and charged. Many more cities have shut them down and more are soon to follow. Or haven’t you been keeping up to date?
ALSO, the vast majority of reputable financial firms are warning investors off of Uber stock when it IPO’s, which is not good for the company and why they have decided to postpone going public, which they had planned to do this year.
What’s more is that a nationwide two-day walkout is planned here in the US among drivers. Many lawsuits against the company have been moved forward by judges and more are mounting. Labor boards investigating Uber are finding increasing evidence of abuse, deception, and malfeasance, all of which will be entered as evidence.
Kalanick has consistently demonstrated crass disregard for drivers in interviews and has a documented history of illegal and anti-competitive activity (look into SCOUR and operation SLOG). He has also approved hacking into reporters’ personal data as well as threatening and harassing them. These will all be referenced in court battles, many of which will be decided by juries.
Fortunately, I have other sources of income. I also keep a detailed record of my earnings against my costs. I have also told Uber representatives which fares I will accept and which I won’t. I know how much a given fare will cost me and I strategize accordingly. They cannot legally take a retaliatory action against me for simply being a smart “independent contractor/partner” who, as his “own boss” has to look out for his own interests, meaning I have to make a profit and Uber cannot force me to do otherwise. What this translates to is a large percentage of cancellations on my end because most ride requests I receive will cost me more than the job pays. And I keep a record to prove as much. Sadly, this makes the service less reliable but that’s Uber’s doing, not mine. If they simply paid enough to make every ride request worth accepting drivers would not be compelled to make so many cancellations, especially in a territory as vast as Southern California (the largest and most costly territory to operate in out of all Uber’s markets).
You are completely out of your depth on this topic. You also clearly don’t give a s**t about the drivers or the work force in general.
You’re a champ. And a stellar example of precisely why workers and employees need regulations to protect them against selfish, unscrupulous employers and “consumers.”
Richard
I suppose I have two options right now.
1) I could read your 4 volume novel which (by skimming it) seems to be nothing but ranting, or
2) I could just reiterate my last statement.
I’m going to take option 2. The future WILL happen **with or without** your cooperation.
Rant all you want. See if it makes a difference.
JAMES MCGIBBON
I have a friend who is a Black Hack owner and he is screwed for every penny the system can get from him. He does not have a radio as it has to be rented. Safety is enforced to a high standard. Any snall defect will take him off the road and another bill. The privates are not subjected to the same standards.
The last thing the small business man needs is a big brother organisation ripping them off.
Albee Doh
You haven’t the faintest idea what the future holds. I do know it won’t include you when bot cars are a reality on any measurable level.