A Critical Analysis Into Uber’s Employment Practices
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A Critical Analysis Into Uber’s Employment Practices
Uber is a taxi-hailing company that has been expanding in many parts of the world. It was founded in the year 2009 and has since grown to become one of the most valued private start-up companies (Blystone, 2019). However, the company has been dogged by a number of controversies ranging from the low pay that is earned by their driver and working in inhumane conditions. Other scandals range from the sexual assault of driers by the customers as well the unethical business strategies that are practiced by the company. The scandals and controversies contributed to the falling of the company valuation from $70billion to $48 billion in 2018.
The report looks at the Uber drivers working condition concerning their pay to their driver. It also addresses the effects of the drivers pay on the company image. There has been a number of lawsuits that have been facing the Uber Company and they have affected the ability of the company to expand in some countries while it has been banned in some of the countries in Europe and in America. It also looks at the effects of the Uber and the gig economy have on their performance. The future of Uber and the gig economy is also looked at, where it is at the present and the future of the gig economy at large.
Uber is a technology-based taxi that uses smartphone apps that connects the client, the Uber driver, and the Uber Company. Uber usually operates in cities, and the customers use the app to request a ride. By opening the app and keying in your destination, the app displays the estimated cost of the journey and the estimated time. At the same time, the nearby driver is able to see the customer, their location, and their destination and accepts the request for transport. At the end of the trip, the app calculates the actual cost that you are supposed to pay, depending on the distance and the time that you have spent on the road. They have different cashless methods of payment, and the customer chooses a convenient way for them. Besides, the app will request you to rate the driver and the experience of the journey through their feedback system. The feedback system that is applied by Uber is meant to foster a sense of respect and accountability for all the parties that are involved.
In terms of service delivery to the customers, Uber Company and drivers have been excellent in achieving this. The drivers are usually very courteous, respectful, and usually demonstrate expertise and knowledge as far as performing their duties is concerned. The big issue with Uber is mainly to do with the drivers and the company. Despite the driver doing a great job in meeting the expectation of the customers and the employer, the remuneration does not reflect the work they do. The driver is forced to work for long hours at no extra pay. Their pay is deducted if they fail to report to work, and then the company doesn’t want to recognize them as employees but rather as independent contractors. The contractual and the alleged exploitative pay that the drivers get has been the cause of the strikes and protest that has been occasioned in many cities of the world where the Uber operates. In some countries, the labour organizations have interfered in fighting for better terms of drivers in their area. It has even gone to the extreme where the lawsuits have been filed against the international company making the company be fined a large amount of money as well as having their name tarnished. There has been a proposal that the company is banned from operating from certain cities due to the perceived mistreatment of its employees. An example of such a state is Chicago, which was proposing that the company be suspended from operating in their city. However, the company was not suspended, but they decided to fight for the rights of their workers so that they can get justice and fair terms of work. The reason is that Uber is seen as a technological advancement that is timely and thus cannot be fought. The best that can be done is forcing it to streamline its operations so that they are in line with the acceptable labor laws and regulations.
Uber, an American multinational transportation company, has made headlines in the recent past, primarily due to numerous legal contentions concerning the employment status of its workers. The firm’s employees, who are commonly referred to as gig economy workers, have held strikes in various nations demanding better working conditions, while various courts have made judgements concerning the nature of the company’s employment terms. Specifically, the organization has been involved in several legal tussles in an attempt to find a favourable legal classification for its drivers. This situation points to the overarching significance of sustainable employment practices in business organizations, a topic that deserves thorough investigation in scholarly literature.
Workers are part of the most important groups of stakeholders in every organization. The success of any business is basically determined by the employees since they spend much time with the customers and in performing the general business operations. In the case of Uber, it is the drivers who determine the quality of services received by the customer, they are also in a position to understand the needs of their customers as well as receive other comments and complaints which would enable the company to work on themselves and become a better version as time continues (Rogers, 2015). However, if employees are treated in a way that they tend to feel less satisfied or less valuable to the company, it may affect their motivation to work in their level best and as a result; it affects the level of productivity and performance of the business.
Among the motivating factors are salary or wages, the working environment, relationship with the supervisors or the management, communication among many others. As stated by, Leighton, (2016), Uber is far much behind in terms of ensuring a good relationship with their drivers and hence the many strikes reported from various regions. It is important to consider the fact that these drivers come from the same communities in which the company expect to get customers from. Therefore, mistreating such workers can cause members of the community to get discouraged or lose trust towards the company’s offered services. Generally, it paints a bad picture on the organization and as a result adversely affects demand.
The term employment practice refers to the observable patterns in a company’s recruitment and workplace conditions. Matters such as unfair wages, paid leaves, discrimination, and sexual harassment, among others, may result in grave legal liabilities if not treated with the seriousness they deserve. Other issues related to this topic include compliance with employment acts, overcoming problems at work, communicating employee procedures and policies, wrongful termination, workers’ orientation, performance policies, and rewards (Mostafa, Gould-Williams, and Bottomley, 2015). Different firms have dissimilar employment practices, which yield varying outcomes. Studying Uber’s employment practices could help ascertain how they affect business performance, profitability, sustainability, and competitiveness.
Importance of Sustainable Employment Practices
Typically, the majority of jurisdictions have explicit guidelines pertaining to acceptable employment practices and impose substantial penalties on violators. The consequences of such desecrations may range from monetary fines to legal actions against perpetrators, unnecessary spending, and decreased productivity, all of which may culminate in adverse effects on firms’ bottom lines (Chadwick, Super, and Kwon, 2015). Indeed, employment-related lawsuits have become a central concern for all sizes of employers. Accordingly, business owners are increasingly opting for employment practices liability insurance to protect themselves against any potential risks. Given Uber’s frequent legal proceedings, all which focus on the nature of its employment terms, exploring this topic could generate insurmountable insights into the appropriate employment practices, especially in international firms.
Complains and cry from both the drivers and other stakeholders have been received urging the government to step in and protect the gig economy workers who are at times paid as a low as £2.50 per hour. It is a problem that has led to the numerous numbers of strikes while others are forced to work under the hostile environment just because of the high levels of unemployment in various countries and especially in the developing ones. According to Lobel (2017), Uber workers will mostly work on freelance contracts or short term without having the right for a permanent employment on the company. As part of the company’s laws and regulations, whenever a driver fails to work in their shifts, they are entitled to a fine of up to £400 and hence forcing drivers to go work even when they are not feeling well. This does not only cause oppression on the drivers but it also risks the lives of the clients. At the same time, it is important to note that because the drivers are poorly paid, they tend to try various means of saving costs including driving at a higher speed to save the cost of fuel. In the long run, such behaviors puts the lives of the customers are risk while at the same time, making the cars to get worn out easily (Todolí-Signes, 2017).
A growing number of organizations steadily recognizes the significance of affective employment practices as well as the potential costs of noncompliance. The present study aim was to critically evaluate Uber’s employment practices and the effects of the company’s recent lawsuits on corporate performance and profitability. In working towards aim, a number of objectives were formulated and used as milestones to ensuring that the study was performed towards the right direction. Therefore, the study objectives include:
To understand Uber’s past and present employment practices
To determine of effects of those employment practices on the company’s profitability and corporate performance.
To determine the effects of employment procedures and policies in employee motivation and loyalty.
To determine the impacts of Uber’s recent lawsuits on the entire gig economy.
The primary research question will critically examine how Uber’s past and present employment practices affect the company’s bottom line. Research questions would be used as a strategy to answering the basic research problem. These research questions are usually derived from the research objectives and they are as follows.
What are Uber’s past and present employment practices?
What are the effects of those employment practices on the company’s profitability and corporate performance?
What are the effects of employment procedures and policies in employee motivation and loyalty?
What impacts do the company’s recent lawsuits have on the entire gig economy?
Introduction
Literature review looks at Uber employment practice and the treatment of employment as they perform their duties as drivers. We look at literature that is available about the company from the time it started in 2009 to the present. The company has definitely grown to become a multinational that operate in different countries by 2019. However, image of the company has not been that clean with accusation of flouting of employment practises in their different areas of operation, the underpayment of their driver, sexual harassment and the mistreatment of their driver. The literature review that looks at the other reports and research that have been done about the operations of the company since it was started.
In addition, the literature review will also look at report that have been written on the gig economy. Uber is part of the gig economy, which is experiencing rapid growth of late. There has been accusations of the gig economy at large does not treat its workers as employment but as independent contractors. The already available reports will be looked at to see what they have found out. A high number of people are working under the gig economy and we therefore seek to understand the working of the economy, how they treat their worker and the effects this has on the workers performance.
Theoretical framework
There have been many theories that relate to the employee and worker motivation in ensuring that the goals of an organisation are achieved and that the worker are happy and comfortable. Satisfied employees are happy employee and they will work towards achieve the organisation goals and objective. Performance is very much related to the how happy and satisfied the workers are with the job and how they feel about about the organisisation they are working for.
Bakotic (2016) notes that human resource practices are a critical aspect of firms’ competitiveness and employee performance. As such, firms are increasingly acknowledging the significance of equitable reward schemes, training, effective performance appraisals, job security, and employee procurement in business. Moreover, employee perceptions of these practices have a substantial impact on companies. Indeed, this assertion is backed by the resource-based view, which argues that superior organizational performance can only result from an idiosyncratic mix of resources, which ultimately results in improved performance and competitive advantages. Human resource practices have changed considerably over the years due to privatization, globalization, technological advancement, increased competition, as well as social, economic, and political factors (Chadwick, Super, and Kwon, 2015). The emergence of a booming gig economy poses unique challenges for human resource managers, who have to redefine their companies’ internal practices to suit the needs of the new breed of freelance workers.
Uber drivers are said to be underpaid as the statistics indicate that more than a half passenger fee goes to the Uber is taken deduction of Uber expenses and the vehicle expense is a meagre $11.77 per hour. For comparison purposes, $32.06 is the mean amount that is paid to a person working in the private sector while $14.99 is the mean pay per hour paid to the social workers in the lowest profession. Besides, the low pay per hour of the Uber driver is subject to the statutory deductions, such as social security. Thus, assuming the drier has no other deduction, their take-home pay is $9.21on average per hour. The W-2 Uber driver earns a wage that is roughly 10th percentile of all the wages and salaries. This means that they earn less than 90% of all the workers earn (Mishel, n.d.).
There is a dual relationship between Uber and the gig economy. The duality is based on the Uber drivers’ quest to supplement their income by working on a part-time basis and in most cases, for a limited amount of time.
The Uber drivers are covered by insurance, but only when they are at work. It covers rideshare driver in period two, and period 3.period 2 begins when a driver starts the journey and is en route towards the customer location. Period 3 starts when the driver gets to the customer, and the customer has boarded the vehicle. The time when the driver is online and waiting for requests from the customer is known as period one, and at that time, they are no covered by the insurance. The driver at that time has no collision coverage from Uber, and they have much lower liability limits. At this period, the driver is exposed to risks that are not covered by rideshare, and probably the personal insurance will not cover that either. In March 2018, Uber described its insurance as providing liability for period 1but does not include collision or give comprehensive insurance. The insurance costs are estimated to be about $0.15/ mile, which covers the maintenance and repair costs. The AAA Company provides an estimate of the driver’s costs for fuel, repairs and maintenance, insurance, registration fees, and the depreciation, which gives a figure of $0.36 driving 40,000 miles (Mishel, n.d.).
The discussion has been rive on the employment share of Uber as well as the contribution of Uber to the gig economy. The gig economy is experiencing rapid growth in the recent past, and the people working for the economy are said to fall in the grey area that is between employees and independent contractors. The gig economy uses the internet-based app to reach its customers and to meet the needs of its customers by performing different tasks. The work may involve transporting the customer form one region to another or delivering a meal from the vector to the customer’s houses.
In assessing the estimated size of the gig economy, experts started by assessing the cumulative google searches for Uber and other prominent gig companies operating in the world. The assessment found that the 25 other prominent gig companies contributed about half of all the searches that were made, and the rest were all Uber searches. Thus based on this search, one can say that Uber accounts for about 50 percent of the gig economy. As of 2015 Uber was said to have about 400,000 active partners.
Non-Uber gig economy companies rely on people who work to supplement income from traditional employment, and they usually work for a limited number of hours per week. Thus the majority are said to work part-time. The On-Demand Economy in which the majority of the work has an average working of 12 hours per week, contributing about 22% on average of their total income.
Uber’s past and present employment practices
According to Leighton (2016), Uber’s employment practises have been not been morally acceptable over the previous years. The company has thousands of drivers as well as millions of customers across the world but has been involved in lots of controversies in most of the regions in which it operates. Uber has been avoiding complying with the local laws, avoiding taxes and eroding the rights of workers in most of the places in which it operates (Rosenblat, Levy, Barocas & Hwang,, 2017).. However, because of its expensive marketing campaigns, the company managed to hide its unethical behaviour for many years and thus enabling them to make huge profits in such a poor environment. Though Uber is convenient, a huge toxic culture has taken over the company which cannot be traded with any kind of convenience enjoyed by the customers (Mitchell Williams, 2014).There have been several reports of sexual harassment, bullying, and sexism in Uber something that has raised lot of concerns in various communities. As such is happening, the company tends to put minimal effort towards dealing with such cases something that places the welfare of their employees at a higher risk as well as discouraging customers from using the services. As a result, the drivers have been fighting for their employment rights since it is a responsibility of the company to ensure safety and security among its workers as long as they are in their line of duty.
Effects of Uber’s employment practices on the company’s profitability and corporate performance.
One of the associated effects of such practices is causing employees and especially the drivers to get discouraged with the job. Many drivers have quit from Uber while the existing ones are only working towards meeting the minimum requirements and not in their level best. For Uber, drivers are their major determinants of the business success. Discouraging and demotivating them affects their level of productivity and hence negatively affecting the company’s profitability and corporate performance (Means & Seiner, 2015). Since the business primary purpose is to maximize profits, it is important to take into consideration the welfare of employees for there to be a good success.
According to Paauwe and Boselie (2015), the unethical practices could lead to loss of demand for their offered services. As pointed out earlier, the mistreated drivers are coming from the same community in which the company expects to get customers from. Therefore, if the drivers are mistreated, most of the people in the society will tend to lose trust and confidence over the company. At the same time, Uber’s image gets tarnished as many lawsuits are being filed against them. As a result, the company loses its potential customers which results to law levels of sales and hence low profitability and performance (Jiang, Lepak, Han, Hong, Kim & Winkler, 2012).
Effects of employment procedures and policies in employee motivation and loyalty.
As explained by Guest (2017), employment procedures and policies have a great impact on employee motivation and loyalty. Apart from the salaries or wages, employees would also want to work in a conducive environment that makes them feel a greater level of satisfaction far beyond the money given to them at the end of the day. The employment policies and procedures make a greater contribution on such level of satisfaction. For instance, favourable employment practices may motivate the employees to stay working with the company since their welfare is being improved from time to time and hence enable them to become better persons their career profiles (De Stefano, 2015). At the same time, favourable employment policies can also make the employee to remain working with the company at a longer time while at the same time get motivated to work in their level best and thus improving the level of productivity and performance on the job.
Impacts of Uber’s recent lawsuits on the entire gig economy.
As a result of the unethical behaviours associated with Uber’s employment practices, there are cases of drivers filling a lawsuit regarding their misclassification as independent contractors and thus asking for reimbursement for all the expenses that are to be paid by the company. For instance, expenses such as vehicle maintenance and gas should be incurred by the company but this burden has been placed on the driver which tends to exploit them. As a result, Uber has agreed to pay a total of $20 million or settling the lawsuit (De Stefano, 2015). This action has a great impact on the entire gig economy. Most of the people in the gig economy are increasingly joining Uber since they expect to receive more benefits from the business. The gig economy is finding Uber as a profitable business opportunity. Most of them are encouraged to buy cars which are then registered with Uber for business purposes. The most interesting part is that the individual can use the vehicle for different purposes while still enjoying Uber’s benefits such as the maintenance expenses (Cramer & Krueger, 2016). As a result, the gig economy is most likely to take advantage of Uber’s strategy which will negatively affect the company’s performance and profitability.
Research design, research approach and research type
Introduction
In this research, the method used is qualitative. Primary sources of information such as the internet and websites were used. It was mainly used to get the statistics about the Uber Company and gig economy at large. Data such as the current value of the company, profits made in the current and previous years, the number of driver in the company, their pay and the number of people employed by the gig economy currently and in the previous years. The information about the lawsuits that have been settled and those that are currently ongoing in courts was also got from the internet. The sources were selected based on their ability to present factual information on about the Uber Company and the gig economy.
Some of the information is listed down under results and finding while some appear later in the chapter. In addition. Secondary sources of information such as journals were used for information gathering. The information they provided was checked for credibility by cross examination with some other information from another website or another journal.
Research design
A qualitative research design was employed in performing the study. Through the qualitative research techniques, it was possible to gather sufficient information from the primary sources of information such as websites and secondary sources of information such as journals and hence make strong conclusions concerning the existing relationship between the employment practices and Uber’s profitability and corporate performance. The primary purpose of the research was to determine impacts of Uber’s employment practices and policies on the company’s profitability and performance. In this way, sufficient data was acquired from the past and the present practices as well as concerning the lawsuits filed against the company’s conduct. All these information was obtained through using the qualitative research techniques.
Research approach
A deductive research approach was used in conducting the study. From the beginning of the study, it was expected that the unethical employment practices and policies have negative effects on Uber’s performance and profitability. The conclusions was true as per the premises and this helped the researcher in performing the study towards the right direction (Calo & Rosenblat, 2017). The deductive research approach, was generalization of the general information to the specific problem. For instance, a review of the previous literature concerning similar problems was conducted and the findings obtained were generalized to the present problem. This technique is helpful in determining the various ways in which the company can deal with the problem for an improvement in performance.
Through the deductive research approach, there is gathering of information which is used to evaluate the study hypothesis related to the existing theory. The study began with the hypothesis that the unethical employment practices and policies are affecting Uber’s performance and business profitability. Therefore, the gathering of information from various sources serves as a helpful tool for defending the hypothesis by proving its truth and validity (Cramer & Krueger, 2016). There was also the use of theory verification where various theories were reviewed and analysed in relation to the problem. Theory was another better way of relating the obtained literature with the research problem and hence making strong conclusions concerning the present problem.
Data collection
Secondary research was used in performing the study. This means that the study relied on primary and secondary data from various sources. Data was collected from previous studies in relation to the problem. Various studies have been conducted by different researchers concerning the relationship between employment practices and policies with the company’s performance and profitability. Through analyzing such studies, I was able to understand the situation in Uber and hence making appropriate conclusions concerning the problem. At the same time, a review of various websites and articles that have been published concerning the problems experienced in Uber was done for more detailed information concerning the issue. It was a better way to understand the problem and hence make strong conclusions over the existing relationship between the practices and profitability.
Data analysis
After the data collected, it was analysed to make them more meaningful and useful. The raw data that was mainly collected from online sources was laid down under result and finding and then analysed in the following chapter. This enabled the researcher to obtain a better understanding of the findings and hence use them more appropriately. The data was then analysed and interpreted to give a good impression of the operation of Uber and the impacts that the driver have as well as the position of the gig economy in the world.
Data presentation
A bar graph has been used to summarise the information and give a vivid picture of the happening at Uber to summarize the findings and making them easily understandable by the reader. Instead of one going through the entire research paper, it will be easier and convenient to go through the data provided and the bar graph and understand the findings. At the same time, such figures are helpful tool for the audience to get to understand the research findings more easily without the need for elaborate explanations
Rationale
The rationale of the study is to help in improving the welfare of Uber employees as a technique to improving the company’s performance. Secondary research is performed in conducting the study where secondary methods are used to collect data. Though the random sampling technique, different individuals from various locations in the United Kingdom are selected and used as the main study population. The results obtained from the study selected sample are then generalized on the whole population and hence drawing conclusions from them concerning the research problem. The study target population are the Uber workers and especially the drivers. It is intended to improve the welfare of drivers expecting that it would in return improve the company’s performance and profitability.
Access to data and research ethics
Ethical concerns were not very prominent in the study as the main source of information for the study were the secondary data. All the information that was required from the study was was obtained from the library and the online platforms. The institutional library was used as it was easily accessible and every convenient source of information. All the data was collected, studied, analysed and interpreted without any problem as the library management gave all the necessary cooperation.
Large study population was one of key limitations. Uber is a worldwide corporation and hence having different stakeholders coming from all over the world. Therefore, performing the study on the entire population involved lots of finances, time, among other resources. Furthermore, it was difficult to ensure quality of the study findings because of the huge workload that was involved. Therefore, sampling techniques was among the best strategies used to ensure that the study was completed in good quality and in time and thus success of the research process.
Introduction
The study aimed to evaluate Uber employment practices and the effects of the recent company lawsuit on corporate performance and profitability. The past and the present operation practices of Uber were studied. The analysis was done on the effects of their employment practices on profitability and corporate performance. The other review that was done was the employment procedures and policies for employee motivation and loyalty. Analysis of the recent lawsuits and their impacts that they have on the entire gig economy.
Uber and the gig economy in statistics
According to Arevalo (2019), the recent Uber and the entire gigs Economy statistics were as follows:
Available in more than 800 cities in173 countries.
All the driver complete around 15 million rides day
Fifty thousand new Uber drivers are being hired every month.
Eight million users in 2016: more than 10times that number today.
Forty million rides completed each month in the United States.
Losses amounted to $1.8 billion in 2018
Lyft lost over $911 million in 2018
Three million active drivers in 2019. 1 million active drivers 300 cities in 2015
1.4 million active drivers for Lyft
Banned in European and two Asian countries, some parts of the United States, Canada, and Australia.
Source: Arevalo, (2019)
Analysis/Evaluation of Results/Findings
Uber has continued to grow steadily over time. The market share of Uber continues to expand where the company had just one million active drivers in the year 2015, and now it has 3million active drivers. This represents a growth percentage of 200 percent! According to Arevalo (2019), the company completed 5 billion rides in the year 2017.
Thou the sales that are made the gig economy continue to go up. It is clear from the statistics that the companies are making losses. For example, Uber lost $1.8 billion in 2018, while Lyft lost $911 million in the same period. The gig economy is seen to be growing in the United States and the rest of the world. The rapid growth is due to their convenience and efficiency in their service delivery to the city population. The increase is predicted would have been much higher were it not for the controversies that have dogged the economy from the time it started.
Source: Uber Statistics (2019).
The bar graph above shows the two dominant mobile-based taxi-hailing companies in the world. As can be seen from the data, the innovative and technological aspects of transportation continue to grow over time in the world. As of last year, the number of Uber users was growing steadily per month with February the previous year, recording 41.8 million users in the month of the month. Lyft is also making a stride in the industry with its number of the user standing at 32 million in the same month last year. This represents a 100% increase in the number of customers for a period of 3 months! (Uber Statistics, 2019):
There has been a sustained fight over the classification of drivers as employees as opposes to being referred and treated as independent contractors at Uber and the gig economy at large. Consequently, Uber had to face a number of lawsuits, some filed by the drivers while some have been file by non-governmental organizations in different countries. The company has in the process incurred millions of dollars in settling the lawsuits while, in other cases, they have had to terminate their working in those countries or they are banned from operations.
The initial case on the issue was back in 2013, a case between O’Conner vs. Uber where the drivers argue that they should not be recognized as a freelancer but rather as employees. The argument was that by classifying drivers as contractors, the company was avoiding paying those benefits that are paid to traditional employees. These benefits are health cover andsick leave The case pushed on through the court for more than six years. In 2016, the case was almost settled when Uber agreed to pay as much as $100 million to about 385,000 drivers who were part of this case and another case. The payment was in the condition that the company would continue to classify them as freelancers. The federal judge rejected the payment with the assertion that the amount was insufficient. From that time, things have changed in Uber’s favor in that the workers are supposed to use individual arbitration instead of class-action lawsuits.
In 2018, the 9th US circuit Court of appeal reversed the O’Connor VS Ube class certification status by nullifying the decision because the Uber arbitration clause prohibits class action. In the request, the size of the class was reduced to almost 13, 600 drivers who would participate in the settlement.
Effects of employment practices
Though Uber is very efficient in its service, the impact of its practices when it comes to dealing with their driver, their working conditions, and the amount of pay that the drivers get continue to haunt the company.
According to Rhodes (2017), Uber was been banned in Bulgaria due to “Unfair trade practices.” The condition to resume operations in Bulgaria is that to fulfil the national registrations required of a taxi operator. In Denmark, it was forced to pull out of Denmark in 2017 after operating in the country since 2014 and not following the laid down regulations of operating a taxi. The other country it has been banned in Italy after it was seen to constitute unfair competition. Hungary, they were banned after working for two years and not following regulations that the other taxis were following. Access to the Uber app was also blocked in the country.
In addition, the company faces suspension in Finland, Spain, France, and the Netherlands over the use of one of their applications. They already have a pending court case in Spain where they are accused of operating a taxi business illegally.
Uber had to pull out of Texas in the United States after they were ordered to vet all their drivers by doing background checks. They explained that checks had nothing to improve on security and that it aimed to penalize the minority. In Alaska, their stay was short-lived and then pulled out due to disagreement on the working terms of drivers. Being a designated taxi driver means that they were entitled to workers’ compensation insurance. The company had to pay $77,925 fine after which they closed business in the area.
They are also not in very healthy operating terms in the US after the president banned muslims after the driver refused to join in the demonstrations, which had the target of showing solidarity with the people affected. #DeleteUber became the trending topic worldwide where a large number of people deleted the Application. Consequently, Lyft, its competitor, capitalized on the ban by contributing $1million to the to help the affected. In Canada, the Rideshare app is illegal in Vancouver. The company left China due to competition and lost a lot of money. In Australia, the taxi-hailing company is not allowed to operate as the law does not permit the usage of the Application. The matter is still pending in court yet to be decided (Rhodes, 2017).
Uber past and present employment practices
Lownsbrough (2017), states that company business practices are morally unacceptable, and thus she claims that she does not use the company. However, boycotting the taxi-hailing company is not the best option. Uber has millions of customers around the world, and controversies have been following the company since its inception in 2009. The company has been able to conceal a bad image for a long time now by the use of expensive marketing campaigns and asserting that there is to use technology. However, the company has been exposed for what it is by the whistle-blowers, protester, and organizing of demonstrations.
Uber can be said to be a very convenient means of transport with the cashless mode of payment and the use of technology, which helps them in delivering excellent services. However, no amount of convenience can cover up for the toxic culture that is continuing to manifest itself at Uber. The case of bullying, sexual harassment with the company has been raised several times. There is a case where one of their former employees, Susan Fowler, described in a blog the inadequate response to the sexual harassment she had been subjected to as an engineer with the company. In the blog, she detailed the situation in which the female Uber engineers staff are denied the “perk” of a free leather jacket and is usually given to all the other male engineers. Besides, it is claimed that the month of employees and customer pressure had forced the chief executive of the company to resign, which is a proof that the company will only take action when the brand and reputation are at stake.
When a company is experiencing an expansion, the worker is the one supposed to reap the benefits. However, in the case of Uber, that is not the case. In contrast, the company has been accused of passing the of growing the taxi business to the drivers. In the majority of the case, the driver is given low pay, no sick pay, no holiday, and no off day. Instead, they are promised flexibility with the premise that they have the authority of working hours that suit them. Long working hours, long shifts, and poor pay is all the drivers get for all their trouble of working that is growing exponentially.
The drivers are compensated in what is known as paid piece work, which was being used during the industrial revolution. Then, the period of the industrial revolution is not known for progressive workers’ practices.
Websites and blogs have been created to address the vices that are practiced at Uber. For example, there is a website named “Why Everyone hates Uber,” which documents the global company pattern of drivers’ mistreatment, bullying, and the legal transgressions. There is a campaign with the GMB union seeking to compel the Transport for London against renewing the license of Uber to operate unless it can guarantee that it will provide safe working practices and basic employment rights.
Drivers not considered as employees but contractors
There has been a long legal battle pitting driver and Uber, where it states that the driver is not their employees but are independent contractors. In California, the law requires that that individual gig workers are recognized as employees as opposed to independent contractors. The majority of the people think that code in California requiring gig workers to be recognized as employees is aimed at Uber. If the gig worker becomes employees, then there would be several changes such as the designation of the minimum wage, the employments rights, and the associated benefits.
Consequently, the driver would not the power to select rides or even have the freedom to determine their working sessions. Besides, their salaries would have to be subjected to statutory deductions. All in all, being recognized as employees as opposed to contractors would benefit the employees.
The act of considering Uber drivers as employees would raise the costs of the company by 20%. If this were to happen, the cost would be passed back to the customers leading to an increase in the price of rides. If they are to make the driver as their employees, then they would have to change the nature of the Uber app by making the pricing visible to have a part that displays the wage of driver, cost of renting the driver’s ride car. The extra of the loss would apply as the hourly wage.
The prospect of Uber drivers does not look very bright. With the technological advancement where self-driven vehicles are almost getting into our road. The coming of the robotaxi will threaten the jobs that are currently held by the current Uber driver. With the number of the lawsuit, the protest, and the demonstration, the company would be more than willing to do away with the human drivers and engage the more efficient, less costly robotics who will have unlimited working hours without demanding any payment. By so doing, the company would render a huge population that depends on the gigs economy jobless. A huge number of employees are employed by the taxi company both directly and indirectly.
There is also the pain that the said robots are going to displace a part-time task-based job compared to replacing a full-time occupation. The reality is that there is nobody who grew up wishing to become a taxi or an Uber driver when they grow up. It is a situation that a person finds themselves in because of one thing or another. Nobody grew up with being a driver of their chosen career.
The cost that a person charged for Uber ride is determined based on several factors such as the primary free ride, there is the cost per mile, and there is the cost per minute. The initial charge that is given is usually an estimate, and it tends to change as the journey begins. This is from the fact that the initial charge that is stated is based on the assumption that the journey will be streamlined with no interruption, which is not the case for most of the time. The fares thus tend to surge as the trip starts. There is a rumor that the company does adjust prices based on who is paying and other demand factors. They are known for cheating drivers in that charging the rider a given amount, and then they end up paying the driver far less than the agreed percentages.
Growth of Uber and gig economy
Uber continues to grow steadily, according to Forbes (2019), South America is the most promising market. The company noted that as South America is a promising continent where a large number of trips are being made per month. The company has been successful although its operations being unregulated in most of the South American countries.
The gig economy is revolutionizing the economy of the world with their unique, innovative, and efficient ways of doing things and performing tasks. The majority of the people today are taking control of their working lives by either earning some income from part-time side jobs, using the gig market place or building a career from freelance and temporary work. The majority of the people are moving from the traditional idea of work for life as they increase work mobility, technological changes, and a shift from the way people have always seen employment. People are taking to working in the gig market as a form of self-employment. Businesses have not been left behind as they, too, are adopting the freelancing way of doing business by using gig workers and an on-demand workforce that is coming in handy in dealing with the challenges of the modern workplace.
Traditional freelancing is part of the gig economy where individuals are creating a career by providing defined contracted services for individuals and businesses. Traditionally, freelancing was focusing on creative professions like design, writers, developers, and programmers. The gig market place is another area that is gaining popularity at a very high rate in the present world. This is where the like’s officer, Fiverr, TaskRabbit, and Wonolo are. Others include self-employment in small businesses as owners and tradespeople.
The majority of the people have been enticed into the gig economy by the low income that is earned in the traditional employment and the rising living standards as well as the cost of housing. They join the gig economy to supplement the low income that is offered in the traditional working environment.
However, there are worries of people being replaced by machines in the workplace as automation continues to take effects. For example, in the United States, there is a possibility that nearly half of the American jobs will be threatened by automation by the year 2040. The information is starting to sink among the Americans with more than 50% saying that they are not confident that their jobs will exist in 20 years.
The gig economy is being preferred even by the employers as they consider that a portfolio of clients is considered to be more reliable than a single employer. Besides, the number of people who want to supplement their income continues to increase as they also want to take control of their own work and the schedules. Enhancing work and life balance is the other reason for driving the population towards the gig economy,
According to a survey done by Wonolo (2019), a significant number of freelancers and gig workers are enjoying the work with a 50% saying that they are very comfortable and happy and only 10% saying that they are dissatisfied with working as a freelancer or in the gig economy.
There is a lot of positivity that the gig economy is proliferating as a survey that was conducted showed that among the gig workers, 71% of the received more work in 2017 as compared to 2016. The number of freelancers who are working full time has continued to grow steadily and now stands at 29%. The gig economy is said to be doubling each year up from 1.3% in 2015 to 4.2% in 2017.(Arevalo, 2019)
Uber was brought about as a result of critical and progressive thinking in offering convenient, efficient, and efficient transport to people in an urban center. The Application of technology is the taxi business that had never been thought before, and Uber made that a reality. Today, it is possible to call a cab from the comfort of your bed so that it will come for you at the doorsteps with a short time. This is in contrast to the traditional taxi where a customer had to go to the roadside and hail at any taxi that is passing to get transport service. There is one doubt that Uber came and revolutionized the transport system in the world. The services they offer are high quality with little or no complaints from the customer. The acceptability of the services is evident from the continuous growth that the company has been experiencing up to now and continues to increase.
However, this history has not been that great when it comes to the treatment of their drivers. The complaints have been from the workers of the company and not the target customers. Claims of a sexist environment, flouting of regulations in different states that they operate in, drivers being denied fair pay and their benefits as well as their rights as workers being denied. The company has not refuted to most of the allegations that are leveled against them, and in 2017, the management of the company agreed that they would change for the better in their operating procedures. Two years down the line and the changes that were promised remain just that: promises. It is more like the promises were just a public relation stunt, and the company is not about to change going by the present state of affairs.
Nevertheless, there is hope with new regulations set to be effective from 1st January 2020. The new rules will, among others, force the reclassification of many independent contractors and those in the gig economy as employees. This has not been taken positively by the tech company as they refuse to accept the decision and look for ways of fighting back. For example, Uber and Lyft have stated that the new rules do not apply to their drivers as they are not part of the usual course of business. They argue that theirs is the provision of a digital marketplace and that the company is not the employer of drivers. It is hard to see how Uber would operate without the driver whom they have been fighting to disown. The company is trying to go around the situation by the use of robotaxi, which has today has failed to materialize.
Uber and the gig economy at large continue to disown their employees by regarding them as independent contractors who are paid on piece work, partially insured, and are penalized when they miss reporting to work even on genuine grounds. The company should be put out of business, and an alternative is sought. This is because, since 2009, when the company started its operations, it has shown once and again that they have nothing to offer other than the flawed corporate structure that a system that is democratically controlled should avoid. Having started in Chicago, the death of the company should be ignited at the same place and the birth of an alternative that has the underlying moral structure to be born. The new structure should be started in collaboration with the local communities to ensure a democratic oversight of its processes (Marx et al., 2019).
The new system would be far much better as it would be democratically controlled as well as giving the communities opportunities to make decisions over how the company should work within their jurisdiction. With effective regulation on payments, the number of drivers, and the measure to deal with private alternatives, the alternative would be able to slide in the space that Uber has been operating on and progress.
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