Uber Drivers Betray The TNC Image

Posted on October 7, 2014 by - Also by this author

Some recent media interviews with Uber drivers reveal some serious behind-the-scenes flaws.

Being An Uber Driver

A PBS Newshour "Making $ense" segment titled, "What It's Really Like To Be An Uber Driver," contains some statements that should make any legit limo operator's eyes pop out. I've excerpted a few and bolded certain sentences for added emphasis. The reporter interviews two Uber drivers at length about their jobs:

[Driver] Catherine Purcell: "I would say that I could make just about the same on both playing fields, but with Uber, I can wear what I want; I can work when I want; I can go online and offline whenever I want; I have no meetings; I have no regulatory fees. As far as the mortgage industry, I had to spend about $1,500 dollars per year for licenses in four states. So that became costly. But with Uber, my car’s a write-off, my gas is a write-off, my food is a write-off, my cell phone is a write-off and my insurance is a write-off. So, overall, I’m coming out ahead with Uber, for sure."

[Driver] Bob: "They never really made a distinction for the buying public between [Uber Black and UberX]. So people expect black service at the Uber X prices, which includes having a nice car, a new model car, things like providing water and snacks, for instance, even. But at what we’re getting paid right now, it’s not feasible to do all those things. But as far as passengers go, some of them have expectations."

Bob: "It’s very standoffish. They’re not very easy to get a hold of. Everything that we do is via email. A lot of the questions that we’ll ask may be dealing with specific things, and you’ll get back a canned response, multiple times."

Bob: "Before the rate cuts, [I was doing] about 20 hours a week. Now I’d say it’s more like 10 to 12. It was lucrative in the beginning, when I first started, [but] now with the rate cuts, you basically break even. With some rides, you might actually be losing money. So, the money’s just, you know, not there — and you’re putting wear and tear on your car. For me, it’s not worth it to do so many hours. . . I do the more peak times, when it’s prime time, when there’s a surge, that basically is worth it."

Uber Drivers Tell-All

The PBS interviews seem to echo a similar article on the website of Bill Moyers: "Is Uber's Business Model Screwing Its Workers?" Now, I'm definitely not a fan of Moyers, the ultra-liberal, LBJ-era encrusted pontificator on PBS, but the writer of the article posted to his site brings out some more ah-ha moments:

Uber drivers have no say in the pricing, yet they must carry their own insurance and foot the bill for gas and repairs — a cost of 56 cents per mile, according to IRS estimates. With Uber’s new pricing model, drivers are forced to work under razor-thin margins. Arman, for instance, made about $20 an hour just a year ago. And now? Some days he doesn’t even break minimum wage. Arman often works up to 17 hours a day to bring home what he used to make in an eight-hour shift. When he emailed Uber to complain about his plummeting pay, he said the company blew him off.

So while drivers make less per fare, Uber suggests they recoup losses by just driving more miles. That may make sense for an Uber analyst crunching the numbers in Silicon Valley, but for drivers, more miles means hustling to cram as many runs into a shift as possible to make the small margins worthwhile.

Kazi drives a Toyota Prius for Uber in Los Angeles. He hates it. He barely makes minimum wage, and his back hurts after long shifts. But every time a passenger asks what it’s like working for Uber, he lies: “It’s like owning my own business; I love it.” Kazi lies because his job depends on it. After passengers finish a ride, Uber asks them to rate their driver on a scale from one to five stars. Drivers with an average below 4.7 can be deactivated — tech-speak for fired.

Solutions

So let's add it up: Poor investment in human capital, incentives to cut safety corners, bad internal communication, and unrealistic consumer expectations. That's not the formula for an enduring, entrepreneurial business model.

Of course, this government-inflicted problem will go away if one of two things happens:

1) TNC drivers have to abide by the exact same rules that govern independent-operator chauffeurs in the limousine industry -- i.e. every driver has a TCP number and license or equivalent in a particular state, TNCs and their drivers abide by federal labor distinctions on employees vs. contractors, vehicles must be insured like chauffeured cars, all TNC vehicles must get registered transponders and permits at airports, each TNC vehicle must meet state inspections, drivers are background checked, etc.

2) All the aforementioned rules that apply to limousine operations and that TNCs neglect, get thrown out.

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