When I fly to Los Angles next week, I was going to take an Uber taxi. Now I’m not so sure after reading Andrew Callaway’s article in the CCPA Monitor.
“Oh, Canada! I’m writing you from Berkeley, California to warn you about this thing called ‘the sharing economy.’ Since no one is really sharing anything, many of us prefer the term “the exploitation economy,” . . . Whatever you want to call it, the basic idea is that customers can outsource all the work or chores they don’t want to do to somebody else in their area.”
Since phone apps can be used to order just about anything you want from groceries and restaurant food to laundry pickup and house cleaning, the exploitation economy might be better labelled as the “apploitation economy.”
On the surface, the sharing economy seems ideal. Independent workers can pick up jobs whenever and wherever they want. But dig deeper and you find that drivers are not so independent. They certainly are not employees. If they were employees, they would receive fixed wages and benefits, deductions for employment insurance, Canada Pension Plan, and taxes.
If Uber drivers were truly independent, they could control their rates and conditions of work. Callaway soon found out some of the drawbacks when he worked for a company similar to Uber called Lyft. He found out that, without warning, ride-sharing companies will lower drive wages. By the time drivers notice the cut, they have invested in cars and are stuck in the job.
Ride-sharing companies are careful not to send drivers to pick up specific passengers because that would make them employees. Instead, drivers are given red zones which supposedly indicate where passengers will likely be. But by the time that other drivers move to the zones, the likelihood is reduced. It’s inefficient for the drivers but avoids the company’s responsibility.
If drivers don’t like the arrangement, why do it? “Realistically, people aren’t driving around strangers because they love it. The most common defence of the sharing economy I hear is, ‘if it’s so bad, why are so many people doing it?’ Many do it out of desperation. I’ve talked to a number of drivers who will work over 30 hours every weekend in addition to a full-time job just to have enough money to pay rent and take care of their kids.”
And if drivers like conditions so much, why do they want to organize unions to protect themselves? Seattle City Council recently approved a bill that would allow drivers for ride-sharing apps to form unions. The vote is a victory for the App-Based Drivers Association (ABDA) of Seattle, an organization of on-demand contract workers that lobbied for the legislation. Union organizers in California have said that the Seattle vote could influence actions taken in their own cities.
Ottawa recently joined Edmonton as the second Canadian city to legalize Uber. The move will put pressure on others. Canadian cities need to pay attention to the American experience and get ride-sharing right by easing restrictions on taxis and reducing apploitation. If Uber really wants to provide a useful service, it needs to treat drivers fairly by allowing greater rate control and working conditions.