Uber Driver Employment Status: Gig Economy and Worker Rights

Introduction

Uber has 22,000 employees worldwide and approximately half of its employees work inside the US. The company has nearly 1 million drivers in the US and approximately 4 million worldwide (Sainato, 2019). The central problem Uber faces is that it does not consider its drivers as actual employees, even though this classification has been challenged at the federal level. Regulators have argued in the past that the company should count its drivers as employees rather than as freelancers or contractors. Drivers, too, have argued that they deserve the benefits, protections, and compensation that regular employees receive (Rapier, 2019). However, the National Labor Relations Board's general counsel recently revealed that Uber's drivers will continue to be classified as contractors. Though the company has viewed this as a victory for its business model, many problems remain as a result of this continuation of what many drivers regard as an inappropriate classification.

This paper addresses the issue at the heart of this problem and explains why it needs to be solved. It discusses the qualitative design used to collect data through the interview method and presents findings from three interviews with local Uber drivers. Finally, it concludes with a reflection from a Christian perspective on how Uber should address its driver employment status issue.

The Main Problem and Its Primary Cause

The main problem Uber faces is that drivers who commit themselves full-time to the platform feel unable to earn a just wage because the company has been permitted to classify them as contractors rather than as employees. It is analogous to a company outsourcing all its production work to wage laborers with minimal protections. Uber has found a legal loophole that allows it to classify its drivers as contractors, meaning it does not have to provide any of the benefits, support, or oversight associated with direct employment. Those who drive for the company only part-time generally have no problem with the arrangement; it is the drivers who rely on the work full-time who feel exploited—and with good reason. Uber has displaced the traditional taxi cab business model and undermined the taxi driver's occupation with its app-based service that contracts out driving to independent drivers.

There are indirect issues with Uber's business as well, including the problem of sexual assaults involving Uber drivers or passengers. Between 2018 and 2019, there were approximately 6,000 sexual assault claims involving Uber drivers or passengers (Bond, 2019). Because of the limited oversight Uber exercises and the limited scrutiny applied when contracting driving services to anyone with a car, the company puts both drivers and passengers at risk (Bhuiyan, 2018).

The primary cause of the driver employment status problem is that, in order to be competitive and differentiate itself from traditional taxi cab companies, Uber had to exploit the sharing economy and engage contractors to provide driving services. People looking for an easy way to earn supplemental income were receptive to the idea. They did not have to undergo a formal evaluation or hiring process, did not have to sit for interviews, and simply needed to download the app, provide proof of a driver's license and a suitable car, and they were qualified to drive for Uber. As the business gained traction, it put enormous pressure on traditional taxi cab companies, many of which went out of business because demand for their services dried up. Uber drivers were faster to respond and fares were cheaper. Riders embraced the service, appreciating the convenience of a reliable driver available at almost any hour and location.

As workers who had been employed by taxi cab companies found themselves out of work, many had to sign up with Uber to remain in the same line of work. The critical difference was that they would no longer be employed under traditional terms. Uber was not "hiring" them but rather contracting services from them. Consequently, Uber bore no responsibility for health care benefits, dental insurance, sick pay, vacation time, retirement plans, pensions, or any of the other perks that come with direct employment. In short, Uber leveraged the sharing economy to undercut an established industry and compelled workers from that industry to operate under the conditions Uber dictated. There would be no unions to help drivers organize, no union protections, and no meaningful way for drivers to fight for better pay. Yet if one wanted to work in the driving service industry, there was little choice but to work for Uber or its competitor Lyft, which operates under essentially the same terms. The arrangement meant that full-time drivers would earn less, have no job security, and have no safety net in the event of a physical attack on the job (North, 2019). As the recent pandemic demonstrated, when the economy suddenly contracted and riders disappeared, Uber drivers were left entirely without support.

Malos, Lester, and Virick (2018) argued that because Uber drivers are not technically "employees," the company has little sense of accountability and no meaningful plan for corporate social responsibility. Though the gig economy bears some responsibility for Uber's driver employment status issue, the company has certainly exploited its contractors and undermined the traditional for-hire driving industry. The fact that federal regulators have permitted Uber to continue counting its drivers as contractors rather than employees has compounded the problem. Addressing it will require a change of leadership at the top of Uber and a shift in regulatory positioning at the federal level. The former has already occurred; the latter could follow with lobbying efforts by Uber drivers, who could potentially organize regardless of their contractor status.

Methods and Literature for Addressing the Problem

Kaltner (2018) points out that the question of employment status for Uber drivers has been formally settled but remains a live problem because drivers have no job security, no benefits, and no safety net. Many are also effectively forced to work for below minimum wage if they want to remain in the driving service industry. For many low-skilled workers, there is no viable alternative, and they must accept work in the gig economy on whatever terms are offered.

Rogers (2016) similarly demonstrates that the predicament of Uber drivers needs to be addressed, but that in the current gig economy environment, corporations like Uber will do everything in their power to prevent their business model from being disrupted. Uber came into existence as an industry disruptor, and its shareholders expect the company to maintain that role. If Uber were to hire drivers the way taxi cab companies do, its business model would deteriorate rapidly.

Furthermore, Uber exercises such control over the ride share business that it is difficult to justify classifying its drivers as independent contractors, as Steinberger (2017) demonstrates: "Uber determines the fare without any input from the drivers, and while drivers are free to set their own hours or refuse rides, this freedom is limited by the fact that if a driver declines three rides in a row, the software will mark the driver as unavailable. Additionally, Uber exerts control by maintaining a strict non-solicitation policy, which prohibits drivers from arranging for rides with Uber customers outside of the Uber software" (p. 585). In short, the so-called contractors that Uber uses as drivers are not nearly as free as other freelancers who can more legitimately be called contract workers. Uber is pushing the boundaries of its contractor classification, and thus far the company has been able to continue doing so without regulatory intervention. Full-time drivers remain deeply dissatisfied with that outcome.

To gather additional information on this issue, interviews were conducted with three local Uber drivers. The first interviewee was a middle-aged man of Italian descent who had immigrated to the US ten years prior; the second was a 25-year-old white college student; the third was a Middle Eastern man in his 50s who had been in America since shortly after 9/11 and had previously driven a cab in New York City. These individuals were identified simply by taking Uber rides and asking the driver to participate in this study, which focused on what the employee status problem meant to them personally and what they believed the solution might be. An unstructured interview method was used so that information could emerge organically through conversation. Typically, the conversation began with a question about whether the driver worked full-time or part-time and what his thoughts were on Uber's driver employment status.

Conclusion

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Rogers, B. (2016). Employment rights in the platform economy: Getting back to basics. Harv. L. & Pol'y Rev., 10, 479.

Sainato, M. (2019). 'I made $3.75 an hour': Lyft and Uber drivers push to unionize for better pay. Retrieved from https://www.theguardian.com/us-news/2019/mar/22/uber-lyft-ipo-drivers-unionize-low-pay-expenses

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