By Edward Escobar
Uber has a lucrative business model, but it has one problem: It relies on pushing its drivers into poverty.
The courts are still skeptical — however politicians are experiencing an awakening to the reality of the impact of the gig economy on the workforce, as corporations, specifically the Silicon Valley Tech Titans, such as Uber and Lyft, are finding ways to skirt the laws and put their corporate profits before people – stating they ‘are not in the transportation industry, do not have drivers and are confident that the current employment classifications do not apply to their business model.’
For, you, the public, it’s important to understand how it all works: Uber and Lyft pretend that its employee drivers are actually independent contractors. That allows them to stick us with every cost, make sure we have no protections or benefits, and continually reduce our earnings. They control and set the ride fares — and its in their interests to constantly cut them. A “REAL” independent contractor sets their own rates, terms and conditions unlike what’s imposed on the drivers under the extreme control mechanisms of these corporations.
How does this play out for drivers? Here’s one example: A driver from San Francisco drives to the airport, and waits nearly an hour to pick up a ride from an arriving flight. He drives the passenger across the peninsula and through the city of San Francisco – drops him off and unloads his luggage near the last entrance of the Bay Bridge. The driver’s earnings for all that time and work? $12.08 and no tip. Six years ago, that driver would have made $55. That driver has to pay a car payment, gas, insurance, and constant car maintenance and upkeep, depreciation of vehicles value, meaning this ride actually cost him money. It’s what we call a “negative ride,” and it is increasingly common.
That figure continues to drop, because Uber constantly offers steep discounts to riders — these discounts are on the backs of drivers – while Uber increases their profitable commissions deducted from the fare. We drivers are loss leaders for these corporations, which are worth billions-with-a-B of dollars. And its all because they’ve figured out how to get drivers to routinely work for them for free!
This is how the crisis of economic inequality happened.
When drivers experience racism, harassment, or discrimination on the job from Uber, we have no recourse or due process. If we were not subjected to misclassification of employment, we would have protections. As fares go down, our wages go down, and so does the ride quality and safety for everyone. Drivers constantly give up and quit in frustration, so Uber constantly churn through many new drivers – lowering the quality and safety of the service with fewer qualified drivers working for diminishing returns as wages drop further. The result is that bad apples will find their way into the system.
Finally, this is a disaster not just for drivers and passengers, but the community. Why does our transportation system have to make our economy worse and our society less fair or safe? It doesn’t! We deserve justice. We deserve to be properly classified in our work, along with the protections that it conveys.
We need politicians to hold Uber and Lyft accountable – forcing them to treat their workers and passengers in a fair, just and equitable manner. At the state level, the legislative leadership is turning the tide in favor of workers rights, slowly but surely, in several states. California, for example, recently passed AB5, codifying the Dynamex ruling, which applies the “ABC Test” to clarify what a “real independent contractor” is.
In New Jersey, state Senate President Stephen Sweeney, authored The Worker Misclassification Bill (S4204), a pro-worker bill that codifies into law existing regulations, that are already in place, to help protect workers against misclassification.
Nationally, Congresswoman Deb Haaland (D-NM) announced the Gig Is Up Act bill at the nation’s Capitol, in December. It’s endorsed by the Social Security Works and our Alliance for Independent Workers’ #DriversUnite Movement and requires these corporations to cover Social Security and Medicare contributions for its workers – saving taxpayers a great financial burden.
We can be a part of the problem or a part of the solution – none of us should sit idly by while a companies like Uber, Lyft, Doordash & other corporations make billions from manufacturing poverty.
Edward Escobar is the founder ofThe ALLIANCE for Independent Workers.