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[[This is a video about why Uber and the whole gig economy sucks, and also, about how more
and more jobs are getting “gig-ified.” Since that topic’s been floating in the
background for ten years now, let’s start with something recent.]]
“if anything, 72% of drivers in the u.s. are saying one of the considerations they're
signing up to drive on uber was inflation. life is getting more expensive so on the supply
side, we may be actually benefiting.”
The clip I just played is a delicious little treat. In this clip, Uber CEO Dara Khosrowshahi
is on CNBC doing a big oopsie and openly admitting that his company benefits from people having
less money, in this case, because of inflation. He’s a happy little guy because people are
flocking to drive for Uber out of desperation and that means he gets to tell investors the
line is going up this quarter. Just look at that smile!
[[I could honestly end the video here because nothing I can say will ever top a tech CEO
transparently describing how he plans to make money off an economic crisis pushing thousands
of Americans closer to food insecurity *and then smiling.* But… I am a glutton for watchtime
so onward with the rest of the video. That clip is only the tip of the iceberg. Uber,
and the economic model it’s come to represent, is about a lot more than profiting off of
inflation and sudden explosions of poverty.]]
You might’ve heard the term “Uberization'' before. Or “platform capitalism.” Or simply,
“the gig economy.”
Apps like Uber, Lyft, Grubhub, Taskrabbit, Fiverr, and all the other “Uber but for
blank” apps have unleashed onto society a supposedly new and disruptive economic model.
Its advocates, and these apps themselves, describe the gig economy as a whole new way
to work. A whole new society, reimagined from the ground up with futuristic technology at
its core, and in which an unprecedented number of people will get the “freedom” to set
their own hours, work from anywhere, be their own boss, and, if they work hard, rake in
big bucks.
[[But of course, rather unsurprisingly, this is all BS. Every part of it. Including the
idea that any of this is new. Let’s first start with the money thing, specifically drivers
wages, because that’s a good entry-way into understanding not only what this economic
model really is but also why it’s become such a staple.]]
Figuring out how much Uber drivers, or any other gig workers, make is a headache for
everyone, including gig workers themselves. Inconsistent hours, demand, supply, tips,
surge pricing, app policies, location, driver-data-based algorithms, and so on mean that there is no
normal situation from which to extrapolate a universal estimate, despite there being
years of data at this point. There’s no one number that really tells the whole story
and the question “how much does an Uber driver make?” unfortunately doesn’t have
a single answer. Nonetheless, two things are certain: 1) It’s a lot less than they should
and 2) Uber lies and inflates its numbers. By a lot.
Back in 2014, for example, Uber used to say that the median salary of its New York drivers
was 90k a year. A pretty good sum, more than the city’s average salary and way above
minimum wage. With this number that the company was very proud of, Uber was telling potential
drivers that it could offer a salary on par with a job that requires a college degree,
*but* with the only barrier to entry being owning a car.
[[If this sounds too good to be true, it’s because it is. It didn’t take long for reporters
to look into it and driving for Uber full time absolutely does not end with 90k in workers’
pockets. In reality, reporters estimated that New York’s Uber drivers made around $12
bucks an hour, or about 25k a year full-time. In other words, under the poverty line for
a family of four. And, astute observers will have recognized that 25k is, believe it or
not, actually a lot less than 90k. Admittedly, though, this is just one calculation made
pretty anecdotally.]]
More recently, it’s been estimated that Uber drivers’ earnings are even lower, around
350 bucks a month on average and 155 at the median. These numbers are, again, hard to
truly understand because they lump together full-time, part-time, and occasional drivers.
And while these numbers can give us a general idea of what’s going on they’re still
nothing specific. Luckily, you don’t need the specific numbers to understand the problem
with Uber and other gig economy employers.
Uber drivers, like almost all gig economy workers, are technically considered by the
company as independent contractors. As such, Uber drivers do not get basic things like
a minimum wage, health insurance, paid time off, sick days, overtime pay, or any other
benefits associated with salaried employment. Every moment that you are not working is money
out of your pocket, meaning that those for whom the app is the sole means of revenue
have incentives to spend as much of the 100 maximum hours the app allows you to work per
week doing just that.
This also means that any major injury or sickness or any sudden life event puts drivers and
other gig workers in a very very precarious position. Uber’s entire model leads to overworking
and exhaustion, measures that Uber hardly combats with driving caps that still allow
most waking hours to be working hours. Reports of drivers sleeping in cars and doing incredibly
long stints are not only common, but can be exacerbated by the ability to switch between
apps to avoid automatic cut offs, the kind of move that makes sense when a 40-hour workweek
isn’t enough to avoid literal poverty.
And, unsurprisingly, Uber benefits tremendously from this arrangement. The “freedom to set
your own hours” discourse has pretty successfully shielded the company from all sorts of criticisms
about these kinds of consequences that are very much intentional. Any worker dissatisfied
with their earnings, or the amount of work that they are doing to earn a meager wage
can be told to simply work harder or smarter. Supposedly, you have the freedom to work as
much or as little as you like, so if you aren’t happy, you can just adjust those variables.
Nevermind that what the law is meant to guarantee for someone punching in 40 hours isn’t applicable.
[[But there’s more to it. Thanks to, let’s call it the “legal optimization” strategy
of considering drivers independent contractors, all the costs associated with providing Uber’s
service, getting people from A to B in a car, are completely shouldered by drivers themselves.
Whether that’s buying the car, or renting it, paying for the maintenance and the cleaning,
paying for insurance, self-employment taxes, income taxes, healthcare, and most importantly,
gas. These are all on the driver’s dime.]]
Drivers are responsible for all these payments that can take a pretty good gross income,
like the one Uber likes to show off, and turn it into a poverty-line net salary very quickly.
Normally a company would handle most of these costs *and* need to provide at least a minimum
wage, but thanks to this legal loophole, Uber doesn’t. This is what makes the company
stand out, and so attractive to investors.
For years, in order to make this horrible deal legally viable, Uber has made every effort
to portray itself as a simple middleman. Just an app and nothing more. A sort of service
that drivers pay for with a cut of their sales, but by no means an employer, something Uber
loves to remind its drivers with the use of the phrase “be your own boss.” Uber justifies
this by saying that it doesn’t set its drivers hours, for example, like a normal business
would. Nor does it force its drivers to take rides, the way a salaried employee might be
given tasks to accomplish as part of their work. But of course these are superficial
details considering the enormous amount of control Uber still has on its drivers. Using
data collected from every ride, every driver, and every rider, Uber toggles variables like
price, number of rides, and other important things that drivers are not privy to and cannot
negotiate, within a range of variability much greater than would ever be normal for an independent
contractor.
[[This means that although Uber might not formally work like a traditional employer,
the algorithms and policies it has in place effectively give it as much control over its
drivers as if it did. Uber can quite suddenly turn the tap off, cut its drivers earnings,
and blame the whole thing on fluctuating demand or “the algorithm.” But in most places,
the law doesn’t consider this amount of power over work to be traditional employment,
so Uber can continue circumventing labor laws, including some very important ones.]]
In many countries around the world independent contractors have practically no guarantees,
as we’ve already covered with minimum wage and healthcare being off the table. But more
sinister, and less well known, is that in plenty of countries independent contractors
cannot form unions.
In America, under the National Labor Relations Act, for example, only employees are guaranteed
this right, meaning that any form of collective bargaining that could raise workers wages,
set more reasonable limits on driving hours, or in any way improve the experience that
drivers have with the company is off limits. And now that the public and the state has
caught on, gig economy companies are making sure that this extremely lucrative loophole
won’t disappear.
Back in 2020, for example, Uber and Lyft spent 200 million dollars to stop California from
classifying Uber drivers as employees. And, in 2016, Uber and Lyft lobbyists outnumbered
Amazon, Microsoft, and Walmart combined. This lobbying powerhouse means that Uber can’t
fail, even when it does. Recently, for example, the UK formally re-classified Uber drivers
as employees, but Uber still held on to its strategy, and therefore its profits, by ensuring
that things like minimum wage guarantees would only apply when drivers had a passenger in
the car, something which the app is only able to do 40-50% of the time, meaning the minimum
wage guarantee is effectively slashed in half.
[[Drivers spend almost half of their time on the clock waiting through no fault of their
own, but get punished for it, all thanks to Uber’s powerful lobbies in yet another perfect
example of how pushing the independent contractor story doesn’t line up with the traditional
employment reality. Clearly, spending all that time waiting conflicts with the whole
“setting your own hours” guarantee an independent contractor should normally be
guaranteed.]]
Then there is the fact that even if Uber says it’s an app for free, independent contractors,
and people working a couple extra hours as a “side-hustle” Uber is completely dependent
on the people who treat driving for the app as a full time job to survive and proves as
much with all its efforts to actively seek them out. Uber would simply not work without
functional employees and as proof, in 2021, the company set aside $250 million for a so-called
driver “stimulus,” desperately trying to attract full-time drivers from its pool
of part-time workers. This is because, according to data from the city of Seattle, ⅓ of Uber’s
drivers, those that work full-time, provide up to half of all rides. Uber simply couldn’t
survive without people treating it like a full-time, normal job, but the company can’t
ever admit this fact without risking labor laws killing their whole business model.
In practice, this means all that Uber has done is turned back the clock and called it
innovation. It has popularized a model that produces full-time employment without the
legal protections earned through decades of militant labor struggles, like the 8-hour
work day, the weekend, social security, and so on. It has taken us back to a time where
companies hold all the cards, with no exceptions and no governmental regulations to prevent
them from pursuing ever more destructive labor policies. And while Uber may not be profitable,
despite its now 13 year-long existence, investors continue putting money in and holding their
shares because they recognize that this model, with its ability to slash employment costs,
is the best chance they have at profitability in the long run.
[[And what’s terrible is how little this actually has to do with Uber. The rest of
our economy has completely bought in. Today, 70% of Ryanair's pilots are independent contractors.
Airplane pilots. And if that doesn’t seem crazy enough,]]
several companies are now trying to do the same in the healthcare industry, pushing nurses
into that same independent contractor status and saving hospitals money. That is, saving
hospitals money not by nationalizing healthcare, or preventing insurance companies and pharmaceutical
companies from profiting off of people’s basic need to continue living and being healthy,
or any other sensible measure, but by gutting workers' paychecks.
And it’s not just a matter of a few examples here and there. Today, 53% of people aged
18-24 who work in the gig economy do so as their primary income source. And, according
to a Princeton study, 94% of the net employment growth in the U.S. between 2005 and 2015 has
been in quote unquote “alternative work arrangements,” meaning independent contractors,
temp work, and freelancing are basically the only new jobs our economy is producing. While
we tend to think of companies like Uber and Lyft as the main perpetrators of this shift
in work, they actually represent a very small piece of the pie, as little as 0.5% of all
workers according to that same study.
[[The sad truth is that regulating a few apps won’t be enough, our entire economy now
depends on a blatant exploitation of a legal loophole that allows conventional companies
to hire conventional employees, call them something else, and get away with a bigger
cut of the profit.]]
And although companies like Uber have made their name by blatantly breaking the law and
entering markets where protections for workers would have kept them out, in some cases, the
transition to precarious gig work has been welcomed by our governments.
The Uber files, a leak from earlier this year, revealed that then-minister of the economy,
now-president Macron negotiated with Uber representatives to get the company in France,
screwing over established taxi drivers and bringing in a new service that would outcompete
them by being more affordable thanks to Uber’s own subsidies, and of course the company’s
reliance on a more exploitative and damaging contract with its employees. Confronted with
this leak, Macron has even doubled down stating he would quote “do it again tomorrow, and
the day after tomorrow.”
[[The picture that’s emerged from the past few years presents a very grim vision for
the future. The trend of precarious work, that is poorly paid, unprotected, and maximally
exploitative will obviously continue. Governments, beholden to the profit motive and the private
interests that lobby them, will continue accommodating this exploitation, happily rolling back the
gains of organized labor when they get in the way. Without intense organizing efforts,
the future, and frankly the present, is not bright.]]
For decades people have been told that if they are poor, if they are miserable, that
they should just work harder, make money by selling their time and energy to someone who
will profit from their exhaustion more than they themselves ever will. It was always a
raw deal, but now that even a full-week’s worth of work isn’t enough, that companies
gloat when inflation pushes people into more dire poverty, and that our governments welcome
these changes with open arms, what could there possibly be left to support? Our labor landscape
needs a complete overhaul, and we’re not going to get it with politics as usual.
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