Uber Is About To Become A Much Worse Place To Work
Here are some cool things about working for Uber:
- You can work any time you want, for as long as you want. You can work from 2-4 in the morning if you like, and if there are no customers, that is your risk
- You can work in any location you choose. You can park at your house and sit in your living room and take any jobs that come up, and then ignore new jobs until you get back home (I actually have a neighbor who is retired who does just this, he has driven me about 6 times now).
- The company has no productivity metrics or expectations. As long as your driver rating is good and you follow the rules, you are fine.
All of this is going to change. Why? Due to lawsuits in most countries that seek to redefine Uber drivers as employees rather than contractors. One such suit just succeeded in England:
Is Uber a taxi firm or a technology company, and are its drivers self-employed or mistreated employees? These questions are being asked of Uber the world over, and last year an employment tribunal case in the UK concluded two drivers were, in fact, entitled to minimum wage, holiday pay and other benefits. The ride-hailing service contested this potentially precedent-setting decision, as you'd expect, but today Uber lost its appeal. In other words, the appeal tribunal upheld the original ruling that drivers should be classed as workers rather than self-employed.
The appeal tribunal agreed that when a driver is logged in and waiting for a job, that's still tantamount to "working time." Working time they aren't getting paid for, of course. Interestingly, the ruling also noted that Uber basically has a monopoly on private hire via an app. Therefore, drivers are beholden to them and can't reasonably engage in other work while also being at Uber's disposal.
GMB, the union for professional drivers that's behind the original case, is calling it "a landmark victory." Naturally, the law firm representing the GMB and Uber drivers feels much the same. No points for guessing who has a slightly different opinion.
Despite Engadget's usual economic ignorance that this must be all good for drivers, in fact this is going to destroy about everything that makes Uber attractive as compared to 9-5 office jobs. That is, if rulings like this don't kill the company entirely, as I have previously prophesied.
This is going to add a new cost for Uber, forcing them to pay money to drivers for dead time when they are not actually driving a passenger. Let's make the reasonable assumption that Uber's first response to this is to A) stay in business and B) attempt to keep prices to customers from rising. The only way they can do this is to minimize dead time.
Want to park at your house in an unpromising neighborhood with little business? Forget it, Uber can't allow that in the future. Want to work at an unproductive hour of your choosing? Forget it. Uber is going to have to set quotas on certain regions and hours of the day that are less productive and find a way to ban drivers from working those times. In addition, they are likely to institute some sort of productivity metric for drivers, ie something like revenue minutes as a percent of total, and then they are going to rank all the drivers and start cutting drivers from the bottom of the list. If Uber survives, it is going to be a very different company to work for, and is going to feel much more like a regular office job with a boss hanging around your cubicle pestering you about TPS reports.
The_Big_W:
If the taxi industry drives Uber out of business, how bad will customer service in the taxi industry become?
I think "Spinal Tap" said it best "none, more bad."
Also, why is it that lefties relentlessly pursue and destroy any and all opportunities for people to work as independent contractors? Its almost as if they believe that people must be either wage slaves to huge corporations, or government dependents. Although I suppose by definition that's what crony capitalism is all about.
November 16, 2017, 11:42 amjimc5499:
Unions.
November 16, 2017, 12:29 pmcraftman:
I think all of these freelance journalists project their dissatisfaction with not having a single, steady paycheck onto others who enjoy freedom and lax work rules at the expense of a certain amount of pay and benefits.
November 16, 2017, 12:43 pmsmilerz:
What incentive would Uber have for staying in any market that demands this? Managing a taxi fleet (which is what it would become) is an entirely different business model than a matching app that pairs buyers to sellers.
November 16, 2017, 1:08 pmMercury:
I still very much doubt that most Uber drivers have any idea how much the all-in cost per mile is to operate their vehicles etc. while working for Uber. Uber of course knows exactly what that figure is (in aggregate) and therein lies the business model. I'm willing (hoping) to be proven wrong but I don't think Uber drivers are actually making what they think they're making despite all the wonderful flex features of the job.
Uber is great for consumers though and really really great for Uber.
Since the secret-sauce of Uber amounts to pretty basic (by 2017 standards) telecommunications and smartphone tech, it seems odd that they are able to hang onto such fat margins for so long. How is there not a Craigslist of ride services by now? That would be the best way to improve things for freelance drivers...
November 16, 2017, 1:22 pmkidmugsy:
"Uber basically has a monopoly on private hire via an app": not in London it doesn't.
November 16, 2017, 1:34 pmhttps://www.addisonlee.com
The_Big_W:
Very good point!
Although if one of these freelance journalists got a scoop, they'd be overjoyed at the money that would make without realizing that if they were an employee, they'd still just get their regular paycheck....
November 16, 2017, 2:23 pmAddie:
Wouldn't the drivers be in the best position to make that analysis and decide if the trade offs are worth it?
November 16, 2017, 4:55 pmAgammamon:
1. The drivers are in the best position to decide whether or not they're making money. Yeah, Uber may know 'in aggregate' but it doesn't know on a case-by-case situation. Neither does the government. And the costs of operating the car for Uber do not necessarily significantly increase the costs of the car from simply owning it - which are already pretty significant. Simply running a vehicle for a few hours a day for Uber can offset fixed costs like insurance.
2. They haven't been hanging on to 'fat profit margins' because a) they're not making a profit, and b)They're *not* the only game in town.
3. Uber (and Lyft) *are* 'Craigslists for ride services. Except better. Any of these people could post a listing on Craigslist *right now* if they felt that would be of value to them. But Craigslist isn't realtime and doesn't feature any of the conveniences (including integrated billing) that Uber does. And don't disregard the power of being a first mover. Amazon doesn't make money either - but when you want to buy something online you're either going to Amazon or Ebay first.
November 16, 2017, 5:21 pmAgammamon:
Because if you're not a 'wage slave' then you might start to view things like your car or computer as workable assets (you know, *capital*) and might start making them productive - and then you might realize that you've become a filthy capitalist and then how are they going to 'tear down Wallstreet'?
Leftists once asked 'what if we had a war and nobody came?' And that is exactly what they're scared of now.
November 16, 2017, 5:24 pmMatthew Slyfield:
Not anywhere, but then it's not all that infrequent for courts to make decisions based on errors of fact in cases where the outcome is both law and fact dependent.
November 16, 2017, 7:11 pmMr. Generic:
They have none. They'll likely pull up stakes and leave the city or country that forces them to treat or manage drivers like full-time employees.
November 16, 2017, 9:29 pmThe_Big_W:
Well, the drivers are going to be out of luck after the SJWs "save" them.
November 16, 2017, 9:35 pmAimless6:
It isn't the SJW's who saved them. It's the entrenched taxi cartels, who own the taxi permits.
A 'legal' taxi driver pays (direct or indirect) for union dues, certificates, medical screening, permits, social benefits, medical, pensions, local and state taxes and the upkeep of the car.
Uber drivers only pay for the upkeep of the car.
November 17, 2017, 5:06 amQ46:
‘Due to lawsuits in most countries that seek to redefine Uber drivers as employees rather than contractors. One such suit just succeeded in England:...’
No. The Court decided Uber drivers were workers, not employees. Under English Law there is a difference... although still not good news for consumers.
An employee is a person employed under a contract of employment. A worker who is not an employee is said to be engaged under a contract sui generis (of its own kind). An employee is obliged to do the work specified in return for payment from the employer Uber drivers are not obliged to do the work that is offered, and are not paid by an employer, so they are workers not employees.
Here is the Law:
“Section 230(3) of the Employment Rights Act 1996 defines a worker as “an individual who has entered into or works under…a contract of employment, or any other contract… whereby the individual undertakes to do or perform personally any work or services for another party…”.
Workers have less extensive employment protection rights than employees but it is often the case that statutory employment protections cover workers as well as employees.
However, there are instances where those individuals defined as workers will not have the same protection and this article will attempt to highlight those instances.”
November 17, 2017, 5:36 amCapitalistRoader:
The UK is just delaying the inevitable:And, sure, there will be pushback on autonomous vehicles especially in heavily unionized places like the UK. But if AVs turn out to be an order of magnitude safer than cars piloted by meat servos–as they should–groups like Mothers Against Self-Driving© will spring up in every city and country, demanding politicians to limit the vehicles and times humans are able to drive vehicles.
November 17, 2017, 8:50 amcc:
Progressives have an obsession with working conditions. They imagine a sort of ideal, low-stress job where you can sip a latte and chat while you work. A job that you fit in between your other activities to make a few bucks...never occurs to them. They want to force every company to pay $50,000/yr with lots of benefits to meet their idealistic view of what the world "should" be and fail to grasp that many jobs simply won't exist at a higher wage. They fail to grasp that a small retail store has big issues with scheduling because staff get sick or don't show up and they want to enforce penalties for changing staff schedules. If you don't want shifting schedules don't do retail. The world that will generate higher wages and better jobs is the one that arises when taxes and regulations are less. You cannot force companies to make everyone rich--that leads to Venezuela.
November 17, 2017, 1:31 pmA deplorable NNYer:
If you got to Eastern Europe, and you need a taxi, the locals pull,out their smart phone, put in where they want to go, and the price they want to pay, to arrange a taxi. If demand is high then they need to bid higher! Only problem is you need a local number for the app to work!
November 18, 2017, 2:20 pmBruce Zeuli:
Uber will be invunerable the day they start withholding taxes from every ride. Some will stay local to grease the wheels of municipal gov, some will feed state coffers and the rest will ensure support at the Federal level.
If regulations or the Constitution gets in the way they will be reinterpreted to support this kind of withholding.
November 20, 2017, 2:50 pmJeffrey Deutsch:
fixed costs like insurance.
Hmmmm...don't your car insurance premiums go way up if you're driving for hire (Uber, Lyft, food delivery, etc)?
November 27, 2017, 1:24 pm