Plan B Forum

Uber is now worth more money than General Motors. Will the hundreds of thousands of Americans who drive for Uber ever be able to earn a living wage?








Boycott Uber If You Don't Like It


Uber is a luxury car service that sells increased convenience for a high price. It may be seen as a …PARASITE!



In The American Prospect, Steven Greenhouse takes a long look at Uber’s labor issues. Or, more accurately, its labor issue: the fact that its drivers are treated as independent contractors, rather than as employees. This is the key to Uber’s entire business model, and to its profits. It is also why many of its drivers say they cannot earn a decent living no matter how hard they work. Greenhouse sums it up:

Indeed, with its clout, cachet, and big-name backers, Uber has sought to redefine what an employee is. No way, it says, should its drivers be considered employees, asserting that its relationship with them is attenuated—even though the company hires and fires the drivers, sets their fares, takes a 20 percent commission from fares, gives drivers weekly ratings, and orders them not to ask for tips.
Uber is the pinnacle of “gig economy” profitability in large part because it has no responsibility for the people that work for it. Uber’s workers in various states are, shall we say, actively challenging this arrangement, with notable success in California, where an Uber driver was declared an employee. For its part, the company is conducting an active lobbying campaign to try to preserve the status of its workers, publicizing the fact that an increasing share of its drivers “have another full- or part-time job on top of their work with Uber.”


Of course, they have to—they can’t earn a living with Uber.

Ideally, America would have high taxes that supported a strong social safety net for everyone, so that the “gig economy” could be a realistic lifestyle, rather than a pipe dream most commonly used for the sake of corporate PR. Until then, we live in a nation in which employers are responsible for a great deal of the benefits necessary for employees to live—health care, social security, and a livable wage. That is where we are. Uber is a company with hundreds of thousands of workers. Unless Uber is prepared to use its lobbying muscle to push through an unprecedented expansion of the social safety net, it will have to sooner or later take responsibility for the unavoidable fact that its workers are humans who have certain needs in order to live. Any multibillion-dollar company that does not provide its workers with what they need to live is at its core a leech on society, because it is society at large that has to pay for the balance of those needs. Meanwhile, Uber executives and investors grow rich on a labor model that asks nothing from them except capital in exchange for great wealth, and asks everything from drivers in exchange for less than a middle class income.

Uber is successful because it is based on a powerfully good idea: unlocking the value of unused assets. You can use your car to make you money. But for many it is a full time job, and to pretend otherwise is to cling tightly to a weird utopian capitalist facade that bears little resemblance to reality.

A business model based on paying workers too little to live—a business model in which a company must fight viciously against workers’ attempts to unionize, because unions are considered an existential threat—is not a real business model at all. It is arbitrage of poor regulation. It is a con job. And it can’t last forever.

Grow up, Uber.

Uber is successful because it is based on a powerfully good idea: unlocking the value of unused assets. You can use your car to make you money. But for many it is a full time job, and to pretend otherwise is to cling tightly to a weird utopian capitalist facade that bears little resemblance to reality.

wesw wrote:she must have been flying that plane really badly for then to take her driver s license too....

wesw wrote:"she must have been flying that plane really badly for them to take her driver's license too...."

In a major setback for Uber, a federal judge on Wednesday dramatically expanded the scope — both in potential financial damages and in the number of people affected — of a class-action lawsuit by California drivers seeking to be reclassified as employees.

U.S. District Judge Edward Chen ruled that even drivers who accepted mandatory arbitration in their Uber contract should be included in the case, saying that clause was unenforceable. That means the majority of the 160,000 people who have ever driven for Uber in California are now part of the class.



Chen also said drivers can seek reimbursement for their car expenses, using the Internal Revenue Service rate of 57.5 cents per mile, as well as for a portion of their smartphone bills. He had previously ruled that drivers could seek tip compensation from Uber, which told riders that tips were included in fares. The drivers might seek between 15 and 20 percent of each fare as tips.

All those amounts could be calculated back to 2009, when Uber was founded.

‘Millions’ at stake

Uber, which is now worth a jaw-dropping $62.5 billion, vowed to appeal the decision and said the ruling shouldn’t affect the case’s ultimate outcome.

“This is very significant,” said Shannon Liss-Riordan, the Boston lawyer representing drivers in the case. “The damages at stake here are quite large, potentially in many millions of dollars.”

Previously, Chen had excluded most drivers who started after June 2014, when Uber added arbitration to its contract language. Still excluded are drivers who work for limo companies or who registered with Uber as corporations.



“Nearly 90 percent of drivers say the main reason they use Uber is because they love being their own boss,” the company said. “Drivers use Uber on their own terms; they control their use of the app along with where and when they drive.”

If drivers prevail in court, they potentially could end up bringing home significantly more for their time behind the wheel. Uber says UberX drivers in San Francisco now earn $1.30 a mile, for instance, a figure that doesn’t account for Uber’s commission of 20 or 25 percent, nor for expenses like gas, insurance and car maintenance.

“Just adding in the IRS mileage reimbursement could, in effect, increase per-mile rates by 50 percent or more,” said Ryder Pearce, co-founder of SherpaShare, which helps drivers track earnings on Uber and other platforms.

Uber drivers average roughly 30 miles of driving per hour, considering that many drive long distances in suburbs like the East Bay, Pearce said. That would mean they’d potentially get another $17.25 an hour for expenses, plus some amount for tips.

To win any damages, Liss-Riordan first has to convince the court that drivers are really employees, not independent contractors as they are currently classified, a decision that would upend Uber’s business model.

Company’s stance

Uber argues that drivers are so unique and diverse, and have so much control over their hours, that they cannot be lumped together as employees. Uber has hammered home that point both inside and outside of court. This week it released a survey showing that more than half of its drivers average fewer than 10 hours a week for hire, for instance.

Uber also insists that drivers would suffer from enforced schedules if they became employees, although many outside experts say that’s not necessarily the case. “As employees, drivers would lose the personal flexibility they value most — they would have set shifts, earn a fixed hourly wage, and be unable to use other ridesharing apps,” Uber said Wednesday.

Tad Devlin, a San Francisco attorney, said it’s too soon to count Uber out, and that its marketplace strengths would overcome a court loss.

“The brand strength and rapidly increasing use and recognition of the Uber cannot be discounted,” he said. Even if ride costs increase slightly if Uber loses the case, it’s unlikely to lose its entrenched position, he said.

The case is set for trial in the summer. If the drivers win, Liss-Riordan has said she’ll next seek a nationwide class-action. Uber says it now has more than 400,000 U.S. drivers but because churn is high, a potential class would include thousands more who no longer work through the company.

The Uber class-action is the furthest along of a bevy of lawsuits against companies such as Lyft, Postmates, Instacart, Caviar and Handy in which gig workers are seeking the protections and rights of employees.

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com Twitter: @csaid