Uber Down, Taxis Up?

Citizen Wealth Financial Justice

uber-web-infographicweb_imgLittle Rock     Uber is supposedly worth $51 billion dollars according to Silicon Valley and some eyes-in-the-sky deep-pocketed investors. The company claims its business is providing an app on your phone or computer so you can summon a ride. Sometimes the ride is cheaper than a normal cab, since Uber is claiming not to be a cab, and sometimes it is more expensive than city fare regulations, once again because Uber is claiming not to be a cab but to use an algorithm for “peak pricing” or some such. Millennial and corporate users who are big fans of the service like it because the cars are bigger, newer, and cleaner, and they can summon them from nearby more quickly and without standing on the street with their hands in the air. Uber likes to present itself as a “disrupter,” allowing it to flaunt safety, insurance, and public carrier laws in cities around the world. It just rakes in a percentage of each fare. Central to its business model is the fact that it claims almost no employees and owns no cars.

Part of the reason some people like Uber is that they hate taxis. Taxis are hard to love. They aren’t cheap. They often aren’t available when you need them. They often are neither friendly nor clean. They are heavily regulated, but not well. Central to their business model is that they also claim almost no employees and usually own no cars.

Uber has some problems though. A judge in California ordered them to make whole a driver for shorting her on pay, insurance, repairs, and other items as an employee. In recent days another California federal judge has certified a class action lawsuit for all drivers of Uber, finding they were likely to prevail on the issues that they are drivers. The judge found their arguments ridiculous when the company argued that “legions” of their drivers preferred to be independent subcontractors rather than employees with wages and benefits. Uber’s hopes for worldwide domination are also in trouble in places like China where a similar company is eating their lunch and they are not able to recruit enough drivers to their scheme.

Betting odds would hold that Uber is going to lose on its fantasy arguments that its drivers are not employees, as rightly they should. Fair is fair though, they poached that same independent subcontractor scam from the taxi cab companies they were trying to disrupt, who for years have been claiming that cabdrivers were independent subcontractors and that they were just a dispatch company just like Uber is an app company and that the car owners or medallion owners of the cabs were perhaps the employers.

Fair is fair. It’s time to level the playing field and end this exploitative fiction and properly classify all of these drivers as direct employees of their companies, whether Uber or Whatever.

The Department of Labor and the National Labor Relations Board have both taken steps over recent years to clarify these issues. Uber is probably hoping it has some years in court so that it can catch a break and maybe convince policy makers and city officials that it’s play-pretend “new economy” is something real, rather than just a new twist on the oldest scam of pure exploitation of workers.

Cab companies in some cases are trying to copy Uber and create an app to go with the dispatch, but does that make their workers any less employees or does it make them more so? Do they pick their hours? Of course not, the cab is supposedly only “rented” to them during certain periods. Do they determine their wages? No, the owner gets the rent and the city establishes the fare. Do they keep their tips? Sometimes yes, and sometimes no, and it is especially worth looking at how credit cards are handled. Do they set the standards for their dress, training, and use of GPS, cleanliness, or licensing? No, once again it’s a city-owner deal.

About the only independent discretion either of these drivers has is whether or not to be lost, because everyone will make them take the blame there, and whether or not to talk about the weather or the game last Sunday. It is time to bring all of these drivers up to the status of workers everywhere who know their pay, get social security, workman’s compensation, and unemployment benefits, and don’t have to be the fall guy for their companies on insurance, inspections, and a host of other issues.

There’s an app for that. It’s call the law.