Jim Stanford of the Centre for Future Work (Australia) analyzed payments to UberX drivers in six Australian cities. He found that drivers earn less than would be required under the applicable Australian wage requirements. After deducting Uber’s fees, applicable taxes, and the cost of vehicle and maintenance, the study found driver pay of A$14.62 per hour, well below the national statutory minimum wage (A$18.29) and les than half the weighted-average minimum wage including casual loading and penalty rates for evening and weekend work that would apply to similar waged employees in Australia (Modern Award #MA00063 for Passenger Vehicle Transportation). The study finds that this underpayment adds up to hundreds of millions of dollars per year in Australia alone.
The study notes Uber’s prices well below taxis, and asks how Uber gets the cost advantage that allows it to price notably lower. Finding similar technology — drivers driving cars — the study concludes that underpayment of UberX drivers has been essential to Uber’s growth.
The study also criticized Uber’s right to change its contract with drivers at any time (which it suggested might violate Australia’s Competition and Consumer Act regarding fair contracts), Uber’s monitoring of driver performance through online ratings (which may not be reliable and are vulnerable to bias), that driver vehicles lack certain safety equipment regularly installed on taxis, that drivers work excessive hours, and that Uber seeks to provide excess capacity which can harm both drivers and congestion.
The study was particularly pointed in its assessment of who gains and who loses in Uber’s model: “The effective transfer of wealth from Uber drivers to the company’s owners (some of whom are billionaires)… is an especially galling distributional outcome.” The study’s conclusion is that Uber’s labor practices are “negative and exploitive.”
Study: Subsidising Billionaires: Simulating the Net Incomes of UberX Drivers in Australia and introduction
The European Court of Justice (the highest court in Europe) held that Uber is a transportation service, which may therefore be regulated by each country in Europe. The ECJ explained:
The service provided by Uber connecting individuals with non-professional drivers is covered by services in the field of transport. Member states can, therefore, regulate the conditions for providing that service.
In contrast, Uber had argued that the company was an information technology service, subject only to Europe-wide regulation and exempt from national law.
Uber was temporarily banned in Delhi, India in December 2014 after a driver allegedly took a passenger to a secluded area and raped her. The decision followed mounting accusations that the company had failed to conduct proper background checks on drivers.
The city of Sheffield, UK suspended Uber’s license. Uber said this was an “administrative error” resulting from the company’s failure to change the name on its license based on the departure of the company’s UK head. Sheffield said such a change is not permitted, while Uber said it successfully made this change in other jurisdictions.
In Lagos, Nigeria, Uber drivers used apps to override phone GPS, causing Uber’s app to record a longer route than was actually taken and inflating the fares charged to passengers. Quartz reports many drivers inflating fares by 1000 to 2000 naira ($3 to $6), though some inflated far more than that.
Drivers reported using this tactic in response to Uber reducing the amount they were paid. They describe protesting unsuccessfully, and resorting to GPS trickery for lack of other ways to get the payment they thought they deserved.
Some drivers said Uber knew about their methods and allowed them to continue. One driver described the Uber app reporting “fake location detected” yet allowing the driver to proceed and charge an inflated fare.
Uber says it refunds all riders who report fraudulent activity.
Drivers in Lagos, Nigeria filed a class action lawsuit arguing that Uber must provide them with employee benefits.
El Salvador’s Transportation Vice Minister Nelson Garcia warned Uber that it was operating illegally and must cease doing so. He said Uber drivers could have their cars seized, have their licenses and plates revoked, or be fined.
Details from Associated Press.
The London Employment Appeal Tribunal upheld a London Employment Tribunal finding that its drivers are workers with minimum wage rights.
Further coverage from TechCrunch
After a passenger stole cash from a driver’s tip jar, caught in dashcam video, the driver contacted Uber to report the problem. Uber replied to note that the passenger denied the allegation. Uber continued:
If you believe the rider has your cash as captured from your dash cam and is refusing to return it, you may want to initiate a formal investigation via the police.
Facing subsequent media scrutiny, Uber indicated having banned the passenger from further use of Uber.
A Boston couple reported that Uber denied them a ride because they were traveling with a service dog.
The Boston Globe reports that after being denied service, one of the passengers got his hand caught in the window and was dragged about 15 feet, causing road rash and requiring five stitches.
Uber said the driver was removed, and noted that drivers are rqeuired to accommodate service animals.