Tribunal Rules Uber Drivers Are Employees Not Slaves

uber

According to the Australian Business Insider, Friday a London employment tribunal rule  that drivers for “car sharing” service Uber are workers and not self-employed contractors — and entitled to benefits like sick pay and the minimum wage.

Because Uber has always maintained that its drivers are independent contractors, and it is just a tech platform connecting riders and drivers, the ruling could have huge implications for Uber’s 40,000 British drivers.

Consequences may also be felt far more broadly throughout the “gig” economy — a growing sector of on-demand services including transportation, food, and cleaning, powered by smartphone apps. Owners claim these extremely profitable companies provide convenience for users and flexibility for workers. Labor advocates are mainly concerned about their ruthless exploitation of their workers. See Uber Car Leasing Program Turns Drivers into Modern Day Sharecroppers and The Ugly Truth about Airbnb, Uber and Task Rabbit

Uber is the most high-profile of these on-demand companies. However 2015 research from Citizens Advice found that as many as 460,000 Brits may be “bogusly self-employed.” This is nearly 10% of the UK’s 4.8 million self-employed workers today.

Read more at The Bombshell Uber Driver Ruling

Is Private Car Ownership Doomed?

auto graveyardphoto credit: Doha News

According to the business press, auto manufacturers are investing big time in car sharing companies. The reason? Declining new car ownership among young people. Americans under forty (most of whom work for minimum wage) simply can’t afford the luxury of a new car at $32,000 a pop. According to Zero Hedge, half of 25-year-olds still live with their parents, and  one third of US households struggle to pay food, rent and transportation every month (ie they have to choose between the three).

Despite all the hype put out by the Obama administration, the economy isn’t recovering. The global economy is shrinking, and more importantly the total number of jobs is shrinking (as Wall Street continues to transfer our jobs to third world countries or replace us with computers or robots). A significant decline in wage and salary levels has accompanied the loss of jobs – with most workers extremely grateful to have any work at all.

Thanks to this dire economic scenario, an entire generation is opting not to buy cars but to rely on public transportation, active transport (ie cycling, walking etc) or car sharing. Auto manufacturers, seeing the writing on the wall, are all joining forces with car sharing companies. Last month, the New York Times reported on the partnership Toyota is forming with Uber, with Volkswagen is investing $300 million in the European car sharing company Gett and General Motors $500 million in an Uber competitor called Lyft. Meanwhile BMW, Mercedes Benz, Daimler and Audi are starting their own car sharing companies.

According to TechCrunch, BMW, which already operates a European car sharing program in ten cities, has just started a program in Seattle called ReachNow. It enables enable Seattle residents to access 400 cars that they can pick up and drop off wherever they like. Daimler has a similar service called Car2Go that’s available in New York, Austin, Minneapolis, Vancouver and Portland, Oregon. Earlier this year, Audi has launched a car-sharing service in San Francisco and Miami called Audi at Home.

The fact that financial analysts (and auto makers) are anticipating the end of private car ownership is one of the more ominous reminders that the middle class is vanishing. As wages and employment levels continue to decline, private cars are going the way of airplanes – only the 1% can afford them. The other 99% of us are expected to share.

 

The Ugly Truth about Airbnb, Uber and Task Rabbit

raw deal

Raw Deal: How the “Uber Economy” and Runaway Capitalism are Screwing American Workers

by Steven Hill

St Martin’s Press (2015)

Book Review

Raw Deal is about all the creative ways Wall Street and Silicon Valley have invented to exploit American workers since the 2008 meltdown escalated the wholesale destruction of US jobs.  As of 2015 the US economy had shed a total of 12 million jobs, a figure that is increasing rather than decreasing.

The book mainly focuses on so-called sharing platforms, such as Airbnb, Uber, Task Rabbit and their imitators. However author Steven Hill also includes chapters on the phenomenal growth of permatemp “contract” labor, the burgeoning System D or gray labor market (where employers pay cash under the table) and the steady replacement of workers by robots, computers and apps.

The Myth of Worker Independence

For me, the most valuable chapters expose the total fraud being perpetrated on the US public about Airbnb, Uber and Task Rabbit, namely the immense benefit they offer the economy, the environment and worker independence by eliminating the middleman. The myth about freeing up US workers by making them micro-entrepreneurs is exactly that: a carefully constructed lie.

Centering these enterprises around web-based apps only thinly disguises what they really are: a labor force made up entirely of contract employees. It’s an immediate win-win for the employer, who reduces his labor costs by 1/3 by eliminating his obligation to pay Social Security, Medicare, unemployment tax or health or pension benefits. And an immediate lose-lose for the “microentrepreur,” who as a member of the precariat,** never knows where his next dollar is coming from.

Hyperexploitation: the Fastest Way to Become a Billionaire

The CEOs who run Airbnb and Uber are both thirty-something billionaires (Task Rabbit founder and CEO Leah Busque is only a millionaire), who got their by hyperexploiting their employees.

Brian Chesky is the 34 year old billionaire who founded Airbnb, a company using a web-based app to enable ordinary moms and pops to rent out their spare rooms to tourists. Guests pay a 6-12% service fee and hosts 3%. Airbnb, which operates in 34,000 cities and 192 countries, is bigger than the Hyatt Hotel chin. It’s valued at $25 billion.

The company has been banned in numerous cities and countries owing to its violation of short term rental laws (most cities place a maximum of 30 days on rentals) and their refusal to pay hotel tax.

There’s the additional problem of Airbnb being taken over by real estate agents and slum lords seeking to cash in on a lucrative unregulated market. Of the 5,000 accommodations listed on the website, 2/3 are entire homes or buildings with no owner present, and 1/3 are controlled by people with two or more listings. In San Francisco, New York and other cities with rent control, unscrupulous slum lords are evicting whole blocks of elderly and disabled tenants to turn their buildings into Airbnb accommodation.

Uber Modeled After Ayn Rand’s Philosophy

Uber is a web based taxi services that recruits drivers to use their private vehicles to carry fares. Uber founder and billionaire Tavis Kalanick, who fancies himself an Ayn Rand revolutionary, prides himself on breaking laws he finds inconvenient

Uber, which is worth $51 billion, has gone from scandal to sandal owing to its refusal to perform criminal background checks on their drivers (after a number stole from passengers or physically/sexually assaulted them) or pay livery taxes or carry commercial liability insurance; their brutal exploitation of drivers; and their failure to protect passenger privacy.

Kalanick faces criminal charges in South Korea and Uber has been banned in France, Spain, Germany, Denmark, Netherlands and Denmark. It has also been banned (or severely curtailed) in Virginia, Maryland, South Carolina, Nevada, Miami, Philadelphia and New York City.

Rent-a-Slave

Task Rabbit was founded in 2009 by Leah Busque to connect “domestic freelancers” with customers needing tasks and errands done. It expanded to include all forms of temporary work (Walmart uses Task Rabbit, where it pays a 26% commission, as opposed to the 40% charged by conventional temp agencies).

The most controversial aspect of the Task Rabbit platform was the “bidding auction,” where “rabbits” competed with one another to provide the lowest bid for the service desired. After a storm of controversy Task Rabbit ditched the bidding auction in 2014.


*According to Forbes, the total value of the global System D economy is $10 trillion

**In sociology and economics, the precariat is a social class of people whose life is dominated by a total absence of financial predictability or security.