In between lockdowns last year, I spoke to a number of people about what it was like trying to earn a living as an Uber driver.
These were not 20-somethings with few commitments putting off finding a nine-to-five job. Most of them had children to feed and mortgages to pay.
For a host of reasons – a lack of qualifications or English-language proficiency, health problems or complex family arrangements – they turned to Uber to scratch together an increasingly precarious living.
The job sucked. Not only because the drivers had to cover all their expenses yet had no control over the price passengers paid – it was also the sense of powerlessness where false complaints from passengers could lead to a driver being booted off Uber’s platform with little recourse.
It was the bewilderment of racing around town trying to earn rewards or surge fares at the whim of an algorithm they had no understanding of or influence over.
So, I’m glad that the employment court this week found, in a case mounted on behalf of four Uber drivers’ by FIRST Union and E tū, that they had “an employment relationship when carrying out driving work for Uber and [are] entitled to a declaration of status accordingly”.
This went against an earlier employment court ruling from December 2020, which determined that an Uber driver was an independent contractor rather than an employee. So, Uber will appeal the latest case, hoping to overturn the decision.
But the writing is on the wall for Uber here and virtually everywhere it operates. As Chief Judge Christina Inglis put it this week: “As I have said, Uber’s structural complexity is a matter for it. But the applicable employment laws in New Zealand do not allow it to have its cake and eat it too.”
Union deals aplenty
Uber has already done deals with unions in the United Kingdom, Australia and Belgium to negotiate drivers’ rights. The real breakthrough came in the UK last March, when the supreme court ruled that drivers were ‘workers’ rather than contractors and entitled to better pay and conditions.
It effectively changed the employment status of around 70,000 ride-hailing drivers overnight and no doubt proved influential in the employment court decision here.
In February, Uber signed a memorandum of understanding with the international transport workers’ federation, which represents 700 transport unions globally, to negotiate on drivers’ working conditions and benefits.
The situation is more complicated in the US, where the department of labor has proposed new gig economy rules that won’t necessarily reclassify Uber and Lyft drivers as employees, but give a wider set of guidelines to determine their employment status.
Where Uber will likely end up in most countries, browbeaten by court cases or the threat of legislation, is offering a sort of “independent contractor-plus” set of conditions covering minimum wage, holiday pay, sick pay, and health and wellbeing conditions.
The real bone of contention will continue to be unions’ assertions that drivers should be paid for the entire time they spend in their car logged into the Uber app, rather than just the time they spend driving passengers.
The likes of Uber, Lyft, Doordash, Deliveroo, Grab and other gig economy platforms will likely have to raise their retail prices as labour costs increase. So be it. For me, breaking the stranglehold of the taxis wasn’t primarily about getting a cheaper fare. It was the innovation that allowed me to easily book and pay for a ride and see how far away a driver was from picking me up.
But better conditions for Uber drivers will also give more people the confidence to become drivers, which means a larger and more capable pool of drivers for Uber.
Long live the side hustle
But for the tech companies in the platform economy, paying a fair price for labour ruins the cost equation that underpins their business model. That’s partly why Lyft’s share price is down 64% this year and Uber’s has dropped 35%. Looming regulation and union deals have seen investors cashing out.
The Uber judgment here and similar wins for gig economy drivers around the world send a warning to the next wave of platform entrepreneurs. You can no longer create a business based on exploiting and disempowering workers. Disrupt all you like, but don’t expect to get away with Uber-like flouting of laws and regulations.
In the post-pandemic world, gig economy work is more popular than ever. People want more flexibility, independence and variety in their work. That’s why I am a gig worker, or a freelancer as we used to be called. The difference between me and an Uber driver is that I can negotiate the price and conditions of my work with numerous clients.
There are already platforms such as Fiverr, Upwork and TaskRabbit that let you set your rates and schedule of work in the digital marketplace. But the Uber model is the most influential and aggressive of them all.
This employment court decision and others overseas spell its death. Uber will still exist but be forced to deliver what it should have offered from the start – a fair deal to the drivers on which its ride-hailing empire rests.
Originally published on BusinessDesk.co.nz
Photo credit: Freestocks.org, Pexel
PETER GRIFFIN 