Uber And Unbridled Capitalism-A car-on-demand race to the bottom

Uber And Unbridled Capitalism-A car-on-demand race to the bottom
A car-on-demand race to the bottom

Empire of exploitation
Empire of exploitation (DANISH SIDDIQUI/REUTERS)
Monday, March 6, 2017, 5:00 AM
Last week, Uber CEO Travis Kalanick was caught on video berating one of the company’s drivers who said fare cuts had caused him financial devastation. The driver, Fawzi Kamel, told Kalanick he was $97,000 in debt after purchasing a luxury car necessary to drive for Uber — and unable to make ends meet as Uber slashed fares and flooded the streets with vehicles.

We hear stories like this from Uber drivers every day, of chaotic and shifting rules of the road that leave drivers in the dust.

Drivers buy expensive SUVs only to be downgraded to the low-end UberX fares. UberX fares started at $3 per mile but were cut to $1.75 per mile.

In January, after changing its prices multiple times, Uber introduced flat fares that often leave the driver with a lower share of the fare paid. The same month, New York City Uber Black drivers — those who drive on the higher-end, better-paying part of the platform — were forced to meet a 4.75 rating, 90% or higher acceptance rate and 10% or lower cancellation rate requirement or be downgraded to those poverty rates.

So Uber’s problem isn’t just a volatile CEO or start-up growing pains. It’s an entire business model predicated on the exploitation of workers. Every move Uber has made since its inception has been on the backs of workers — here in New York, seeking to wipe out an entire industry of professional taxi drivers and replace them with an underpaid workforce with zero labor protections.

Uber calls its workers independent contractors instead of employees so that it can skirt minimum wage laws and avoid paying into unemployment insurance funds or contributing to payroll taxes.

But three of our members have been determined employees of Uber for the purposes of unemployment insurance. Jeffrey Shepherd was granted unemployment by our state’s Department of Labor after earning poverty pay. One week, after working more than 47 hours and serving 56 trips, and after Uber’s commission, car lease and fuel charges were deducted, Jeffrey, a 4.8-star-rated driver, earned just one penny.

Uber is appealing these employee determinations and refuses to recognize its drivers as anything but expendable sweated labor. This is offensive and absurd.

Uber uses investor money to lure drivers with sign-on bonuses and incentives so they can overwhelm the competition. But once the bonuses end and drivers are dependent on Uber’s falling fares, they often sink into poverty.

As the vehicles multiply, it’s a race to the bottom. Not only Uber drivers but all drivers in New York City have watched their incomes plummet. In 20 years of organizing, I have never seen professional drivers in more dismal times.

Now, Uber is pushing for a special carve-out in state law so it can dispatch to private motorists in personal vehicles in upstate New York, with little regulation and zero labor protections.

In Rochester, Uber has promised only $350 per month for its drivers before expenses. Count on it: When Wall Street investor money is used to flood Rochester streets with vehicles, the city’s 300 current full-time taxi drivers will lose their livelihoods.

This bill won’t just impact upstate drivers. Unregulated vehicles will pour into our city, the country’s biggest taxi market, in search of customers, making things even worse for cabbies and others who are trying to hack it.

What passengers upstate want is the convenience of app-dispatched taxis. Which they deserve — without Uber’s worker exploitation.

The governor should refuse any special carve-out for Uber and instead ensure minimum wage and overtime protections for drivers. He could regulate fares and commission rates, similar to protections taxi drivers in New York City enjoyed before Uber deregulation began to undermine them.

Here in the city, if the mayor refuses to regulate Uber as the taxi service that it is, then he must modernize black car regulations to include a cap on vehicles and set a minimum fare requirement. He must also enforce against wage theft, such as Uber unlawfully taking sales tax and injured workers’ fund contributions out of drivers’ meager pay.

Kalanick’s on-camera response to Kamel when he spoke of economic hardship was, “Some people don’t like to take responsibility for their own s--t.”

Well, Travis, it’s time you take responsibility for the devastation you’ve wreaked on workers and start treating them with respect. Start by recognizing drivers as employees of your company.

Desai is the executive director of the 19,000-member New York Taxi Workers Alliance.