A depressing new report from Bloomberg this morning highlights all of the ways that Uber, the company most emblematic of the app-powered “gig economy,” is making earning a living wage more difficult for its drivers. Drivers who work full-time for the company, though not salaried employees, have taken to sleeping in their cars after finishing shifts in order to stay near urban centers that offer higher fares. The company has over the years continually cut the percentage of the fare that it provides to drivers, instead using their vast reserves of investment cash to subsidize unsustainably low fares for customers.
From the report:
Uber drivers across the country swap tips for finding sleeping spots, like: which stores have the most forgiving security guards and where to find free Wi-Fi. In Chicago, drivers call the 7-11 at the intersection of Wrightwood & North Lincoln Avenues the “Uber Terminal.” In Columbus, Ohio, drivers prefer the Walmart off the Jack Nicklaus Freeway. In Queens, New York, drivers are known to frequent the 7-Eleven off JFK Expressway. Drivers on the online forum Uberpeople.net joke that there is money to be made in a motel chain serving the large number of Uber drivers sleeping in their cars in New Jersey.
A few years ago, Uber’s pitch to drivers was that they could earn high hourly wages on their own schedule, but that isn’t turning out to be the case. One full-time driver told Bloomberg that he used to make $40 an hour, and now makes $12.50. Uber Pool, the program that allows two separate customers on the same route to share a ride, hasn’t helped matters. Last week, Uber settled a lawsuit, paying $20 million to the Federal Trade Commission for misleading drivers about how much they could earn. “According to the complaint,” CNN reports, “Uber claimed its drivers could earn a median income of more than $90,000 per year in New York and more than $74,000 in San Francisco. In reality, the FTC said, less than 10 percent of drivers earned that.”
The majority of registered Uber drivers are part-time, a stat that Uber likes to trot out when talking up how it offers flexibility. Another statistic discovered by Bloomberg sheds a different light on the matter: “Half of the driving gets done by people who work more than 35 hours a week. Those workers generate about half of Uber’s revenue and are responsible for about half of Uber’s trips.” That means that Uber isn’t powered by a legion of part-time side-gig seekers, but by a small contingent of people treating it as a full-time job. (And, apparently, sleeping in parking lots to make it work.) Despite this, Uber remains resistant to classifying these drivers as employees and providing the requisite benefits, but it is willing to slash their pay at the same time.