Category: drivers

Practices that distinctively affected drivers.

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Indian driver threatened suicide

Mike Isaac’s Super Pumped (p. 187) reports an Indian driver who threatened suicide due to reduction in Uber’s payments to drivers:

One incident involved an Indian man who arrived at an Uber outpost in hysterics, upset that Uber had yet again slashed prices. The man took out a canister, doused his body in gasoline and then brandished a lighter, threatening to set himself ablaze unless Uber raised its rates again. Security guards tackled the man, wrestled him to the ground, and stripped the lighter from his hands.

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Hyderabad driver suicide

Mike Isaac’s Super Pumped (p. 187) reports the suicide of a driver in Hyderabad, India after he wasn’t able to make his car loan payment on time:

An angry mob of drivers—some who drove for Uber, others employed by taxi organizations all too happy to stoke anger—showed up outside of Uber’s offices in early 2017 with the dead body of the thirty-four-year-old driver, M Kondaiah, dumping the corpse on the company’s front doorstep. If Uber’s wages for drivers in India weren’t so low, the group claimed, Kondaiah would still be alive today.

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Paid costs associated with fines and impoundments

When in a dispute with Philadelphia transit regulators, Uber promised to pay any fines and other costs if drivers’ vehicles were impounded:

Uberx: Reminder: If you are ticketed by the PPA, CALL US at [number removed]. You have 100% of our support anytime you are on the road using Uber–we are here for you, and we will get you home safe. All costs associated will be covered by us.

Source: Mike Isaac’s Super Pumped (p. 148)

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Pushed taxi and livery drivers to financial ruin

Mike Isaac’s Super Pumped (p. 146) summarizes the “financial ruin” that car services and taxis faced when Uber entered their market and destroyed the value of their permits and medallions.  Quoting from driver Doug Schifter’s suicide note:

When the industry started in 1981, I averaged 40-50 hours. I cannot survive any longer with working 120 hours! I am not a Slave and I refuse to be one.”

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Multiple competition regulators questioned Uber-Grab deal

Reviewing Uber’s proposed sale of its Southeast Asia business to Grab, the Competition Commisison of Singapore (CCS) announced that it is looking into the transaction.

Broadly, CCS said the proposed transaction would bring “substantial lessening of competition in relation to the chauffeured personal point-to-point transport passenger and booking services market in Singapore.” CCS therefore required Uber and Grab to maintain their pre-transaction pricing, policies, and products, and not to exchange any confidential information.

After CCS’s statement of concern, Malaysia’s Land Public Transport Commission also announced that it would examine the proposed transaction. The Philippines’ anti-trust agency, the Philippine Competition Commission, then stated similar concerns: “There are reasonable grounds that the said acquisition may likely substantially lessen, prevent, or restrict competition.”

Coverage from TechCrunch and prior critique from the author of this site.

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Poised to sell Southeast Asia assets to Grab

Uber announced plans to sell its Southeast Asia assets to Grab, the dominant ride-hailing firm in that region. This transaction raised competition concerns because Grab and Uber jointly controlled the overwhelming majority of ride-hailing service in the region. The transaction thus created an effective monopoly for Grab — allowing the company to charge higher prices and fees, to the detriment of both drivers and passengers.

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Sold Chinese assets to Didi

Rather than continuing to compete with Didi Chuxing, the dominant ride-hailing service in China, Uber sold its Chinese assets to that firm — essentially ending competition in ride-hailing in that country.

This transaction raised several concerns. One, Didi and Uber jointly controlled the overwhelming majority of ride-hailing service in China. The nearest competitor had just 3.3% market share as of the time of the transaction. The transaction thus created an effective monopoly for Didi — allowing Didi to charge higher prices and fees, to the detriment of both drivers and passengers.

Two, as part of the transaction, Uber received 17.5% ownership of Didi, and Didi in turn held an investment in Lyft. So the Didi-Uber deal made Uber a part owner of its biggest US competitor.

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Regulators sued Uber for failing to disclose data breaches

After a data breach in which hackers stole data from about 600,000 drivers globally, for which Uber paid a ransom to hackers but did not notify affected drivers, regulators pursued Uber’s violation of applicable law, including state laws about notifying those subject to data breaches.

  • The FTC filed a revised complaint adding additional concerns to a prior action against Uber. Uber responded by agreeing to expand its prior settlement with the FTC over charges that it deceived consumers about its privacy and data security practices. The FTC specifically criticized Uber for failing to disclose the breach to the FTC until November 2017, fully a year after the breach occurred, even though the FTC was already investigating other Uber data security practices.
  • Pennsylvania sued, threatening a penalty of up to $13.5 million ($1000 for each of the 13,500 Pennsylvania drivers affected).
  • The city of Chicago also sued (complaint), seeking $10,000 per day for each day that Uber violated the state’s disclosure ordinance, as well as $50,000 for violating the Illinois Consumer Fraud Act.
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Australian study finds drivers paid below applicable minimum wage, concludes “exploitation”

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 less 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 that Uber’s prices are well below taxis, and asks how Uber gets the cost advantage that allows it to offer notably lower prices. 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

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Uber CEO Dara Khosrowshahi’s Tweet criticized as “insulting” and “destroy[ing] months of hard work”

Responding to a study by MIT researchers that found low earnings by Uber drivers, Uber CEO Dara Khosrowshahi replied:

MIT = Mathematically Incompetent Theories (at least as it pertains to ride-sharing).

Inc.com criticized Khosrowshahi’s response, calling that Tweet inconsistent with a company “eager to learn from its mistakes and play nice with others” and questioning Khosrowshahi’s “mocking tone.”

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