It’s hard to imagine how an Uber ride could ever lead to a roadblock. Prompted by the tap of a few buttons, the Uber app connects users with nearby drivers to send them on their way to virtually any destination within minutes. It’s no accident that the word “uber” itself suggests a road to endless possibilities. Borrowed from the German term übermensch, meaning “superman,” the company’s trademark invokes the American dream for human progress and upward mobility. In one commercial, riders and drivers alike zip along the road to schools, new homes, and jobs in time to the slogan, “We’re all going somewhere.” Indeed, this message is geared towards drivers, as well as customers—a quick glance at the website makes the job’s flexible hours and lack of oversight sound like the perfect source of extra cash and stability in today’s unpredictable economy.
But the reality is that Uber drivers are destined to hit a dead end before even touching the gas pedal. That’s because in every state but California, Uber has used loopholes in the legal system to avoid paying minimum wage and to skimp on fundamental workplace protections. Through a clever spin on the language in its contracts, Uber has convinced several courts that drivers are independent contractors who work for themselves, not Uber, and thus lack the rights of regular employees.
Employee status forms the backbone of fair labor standards and the safety net that we know today. The most important laws guaranteeing wages, overtime, benefits, injury compensation, lunch breaks, paid sick leave, and more, only kick in when a worker is an employee on a company’s payroll. In today’s competitive marketplace, these protections require companies to spend money on employees that many would rather save. Hiring workers as independent contractors allows companies like Uber to cut labor costs by 30%.
But this maneuver funnels those costs right back to the worker. Although Uber told the Wall Street Journal in 2013 that it pays $100,000 per year, drivers would have to work over nine hours every single day to actually make that amount, because as independent contractors, they’re paid by the hour and don’t get overtime. Earnings dropped by 40% in January 2015, when the company reduced its fares.
Not only does Uber forbid drivers from accepting tips to soften this blow, it further cuts into their returns by refusing to compensate them for duties essential to their workloads. Because Uber makes the ultimate decision whether to charge ride cancellation fees, billable hours don’t always cover time spent waiting for customers who never show up. Even though drivers must keep their cars in ship-shape and offer water and mints, they’re on their own for all vehicle-related costs, including gas, insurance, repairs, car washes, and tolls. In addition to these expenses of $7,000-10,000 per year, drivers must dip into their own savings to cover insurance, injuries on the job, and missed work for vacation or illness, all because they lack safety-net employee benefits. Though this loophole isn’t a problem for workers who get benefits through family insurance plans or other part-time work, it forces others in serious financial need who drive full time to live paycheck to paycheck. After accounting for these burdens, net income can be as low as $2.64 per hour, less than a third of minimum wage. This paltry showing of thanks seems especially greedy given Uber’s $51 billion valuation. One driver reported working for 14 to 17 hour days just to pay rent. It’s no wonder that most drivers quit after less than a year.
These drivers deserve proper compensation in New York for fueling Uber’s wealth and providing transportation in our crowded cities. Uber isn’t the only company using the independent contractor loophole to relegate low-wage work and maximize profits, especially in urban environments full of vulnerable groups living at subsistence levels. Our courts should stop Uber from contributing to this trend, and recognize drivers for what they are: regular employees. A California court took that road this past summer, finding that Uber drivers play a crucial role in Uber’s business, under Uber’s supervision, and therefore are employees. It didn’t matter to the court that Uber drivers are free to choose their schedules and use their own cars. They qualified as employees because Uber ultimately depends on them for income, provides them with access to the platform, and controls fares, tipping, the iPhone app, rider approval ratings, and more. As a result, the court held Uber responsible for over $4,000 worth of toll charges and gas incurred in just a few months by one driver.
There’s no question that Uber’s convenience has enormous potential to revolutionize American metropolises, including New York City. In the past year alone, Uber trips increased fourfold in the Big Apple, a clear indication of customer preference for ride services over taxis. But it’s only fair that the men and women who drive this success are rewarded for their efforts, just like anyone in any ordinary job. Even if that means increasing fares, consumers, like Uber, must take some responsibility for the workers who provide them with the services they use. Let’s keep Uber’s drivers on the road.
Sources used
Simplicity in Motion, Uber, https://www.uber.com/features (last visited Nov. 6, 2015).
Übermensch, Webster’s New Twentieth Century Dictionary (2d ed. 1975)
Michael Barrero & Ashley Parker, Candidates Will Hail a Ride, but Not Necessarily the Uber Labor Model, N.Y. Times (July 16, 2015), http://www.nytimes.com/2015/07/17/us/politics/presidential-candidates-hail-uber-rides-doubts-on-model.html.
Uber, What’s Your Destination?, YouTube (June 1, 2015), https://www.youtube.com/watch?v=8MJpiqCl4dE.
Sign Up to Drive with Uber, Uber, https://get.uber.com/drive/ (last visited Nov. 6, 2015); see also David Plouffe, Remarks on Uber and the American Worker (Nov. 3, 2015) (transcript and video available at https://newsroom.uber.com/2015/11/1776/).
Steven Hill, Raw Deal: How the “Uber Economy” and Runaway Capitalism Are Screwing American Workers 88-90 (St. Martin’s Press ed., 2015).
Maya Kosoff, Uber Drivers Speak Out: We’re Making A Lot Less Money Than Uber Is Telling People, Business Insider (Oct. 29, 2014, 8:54AM), http://www.businessinsider.com/uber-drivers-say-theyre-making-less-than-minimum-wage-2014-10.
Douglas MacMillan, Uber Cuts Deals to Lower Car Costs, Wall Street Journal (Nov. 25, 2013), http://blogs.wsj.com/digits/2013/11/25/uber-cuts-deals-to-lower-car-costs/.
Berwick v. Uber Techs., No. 11-46739, slip op. at 3 (Cal. Super. Ct. June 4, 2015); id. at 86, 88.
Seth Sandrosky, Uber Drivers Are Running On Empty, Huffington Post (Sept. 23, 2015), http://www.huffingtonpost.com/entry/uber-drivers-are-running-on-empty_56031619e4b00310edf9e8a7; Kosoff, supra note 11.
Douglas MacMillan & Telis Demos, Uber Valued at More Than $50 Billion, The Wall Street Journal (July 31, 2015), http://www.wsj.com/articles/uber-valued-at-more-than-50-billion-1438367457.
Andrew Tangel & Austen Hufford, Uber use quadruples in New York City, MarketWatch (Oct. 26, 2015, 2:50PM), http://www.marketwatch.com/story/uber-use-quadruples-in-new-york-city-2015-10-26.
Photo: Chicago taxi drivers protest Uber. By ScottMLiebenson (Own work) [CC BY-SA 3.0], via Wikimedia Commons
