Why my below minimum wage Uber London income hurts everyone
I read Tim O’Reilly’s pro Uber piece, Getting Over Taxis and was surprised that he cites an investor and a financial journalist as sources for how much an Uber driver makes. How about asking an actual driver? The following is my first post on Medium and is a re-post from my blog, Uber London Driver.
A few weeks ago my income accounts were the subject of a GMB press release. It was a weird mix of empowerment and humiliation to have such personal data released into the public domain. Earning just £5.03 per hour over a month on an average 53 hour week is, frankly, embarrassing. But it’s heartening to feel the support of GMB and political leaders like Sadiq Khan, David Lammy, Diane Abbott and even Zac Goldsmith now rallying to the cause of bringing Uber to Employment Tribunal to assert worker rights currently denied. This is a legal action reluctantly brought myself and a growing number of Uber drivers who feel we have simply run out of options.
But is this just the problem of a minority? I get the impression that we private hire drivers like to keep a brave face on things and make out that things are better than they really are. I know I’m not the only one financially hurting from the Uber experience. We have to face the fact that Transport for London (aka TfL, the London transport authority & regulator) are saturating the market with a 1,000 new private hire licensed on the road each month, month after month. These drivers are lured in on the promise from Uber that you can make £4,000 per month.
The cold forces of economics suggest things can’t end well for private hire drivers. Uber and it’s customers enjoy all the positive benefits of network effects created by drivers. The drivers, however, must bear the cost of economic inefficiency and the negative network effects. Put simply, Uber needs a car on every corner to drive down response times and that is achieved through an excess of drivers hanging around waiting for a job. With 15,000 already on the road, the company has an objective of boosting that number to 45,000 in London by next spring. And as quick as TfL take our money for license fees they unleash Operation Neon exclusively against private hire drivers struggling to operate in ever crowded streets. It’s quite simply Kafkaesque regulatory behaviour.
At the macro level there are other costs which most be borne externally. Londoner’s are beginning to notice additional congestion caused by increasing numbers of private hire cars which in turn contributes to reduced air quality and poor traffic flow.
TfL’s public transport network is starved of incremental traffic as passengers are lured off busses and trains by below cost Uber fares. TfL still has to support the cost of it’s network so lost custom can only mean higher fares for Londoners still. This leads to death spiral of under investment driving even more passengers into the Uber embrace. Make no mistake, Uber does indeed see itself not only in competition with taxis but also with the entire public transportation system. Says Travis Kalanick:
Uber’s mission is to go to every major city in the world and roll out an efficient, convenient, elegant transportation system. I like to think Uber is creating a new way of getting around cities.
Travis Kalanick on public transportation. Credit: Melody McCloskey, FLICKR
The irony of such lofty claims of reinventing the wheel is rather brilliantly satirized by Anil Dash in his piece Uber for Uber. I commend it to every public transport policy maker in London and especially to Mayor Boris Johnson who thinks anyone not drinking the Uber Kool Aid by now is a luddite.
And there are other losers. With many drivers earning so little, they must rely on working tax credits — a UK welfare to work programme — to supplement their income and keep the family above water. This serves as an effective public subsidy to a company that genuflects at the altar of the free market. VAT (sales tax) receipts are enjoyed by citizens of the Netherlands for every trip made in London since all transactions are recorded and processed there.
There is also a wider point of principle at play here. No doubt other large employers are watching the Uber revolution with interest. If Uber is allowed to erode worker rights to the extent they have done in London and get away with it, you can be sure many, many old school employers will be lining up to attempt to do the same. Nurses, teachers, cleaners, white collar office workers, hotel workers and doctors will overnight become self employed micro entrepreneurs. They too will enjoy the flexibility of an endless work day and the excitement of sharing all the business risk but little in the way of reward. This casualization of employment cannot be just waved through without our consensus and consent.
And then we come to the iconic black cab taxi trade. They’ve never welcomed private hire competition no matter what form it takes. I’m not going to comment here on the ply for hire definition debate. But suffice to say, when Uber is enabled to offer below cost fares — supported by below minimum wage payments, working tax credits and beneficial overseas VAT regimes — we must recognise London’s cabbies are fighting market forces on a far from level playing field.
Finally a note about safety. With ever declining incomes, drivers have little choice but to put in excess hours to cover their costs. Uber bears no responsibility for the inevitable risk of fatigue and TfL does not enforce any standards on working hours. I genuinely fear for the safety of Londoners getting into an Uber car, or being in vicinity of one, when the driver has worked 20 hours straight.
For these reasons the GMB legal challenge for workers rights is crucial. When successful, Uber will be forced to acknowledge a floor in the market at minimum wage below which no driver can fall. Uber will also be obliged to observe its responsibility for operational safety. Despite what you may hear to the contrary, neither of these will destroy the Uber model or represent an attack on innovation and new ways of working. Indeed, private hire drivers, myself included, love the flexibility of the Uber business model. Rather, this claim is just an old fashioned matter of decency and Uber doing the right thing for the sake of all Londoners.
Originally published at www.uberlondondriver.com on September 17, 2015.