Published on February 9th, 2016 | by Joe Kelly0
Uber: The arrival of ‘The Sharing Economy’
The arrival of Uber to Australasia has created chaos in the taxi industry. Started in 2009, and now operating in almost 60 countries, Uber allows customers to book transport using an app on their smartphone. The driver: absolutely anyone with a car prepared to sign over approximately 20% of the fare to Uber.
Uber’s success since launching in New Zealand in 2014 is undeniable; use of traditional taxi services has already declined to the point where taxi drivers are moonlighting after-hours as Uber drivers to make a living. Users of Uber point to the ease of ordering a ride using your smartphone, the prompt arrival times (an average of 3.5 minutes in Auckland according to Uber) and the lower prices compared to taxis (20-40% cheaper). Uber users are able to choose their driver based on ratings given by previous customers. Uber’s success has also been made possible by the lack of investment in the taxi industry; with no significant competition from public transport and in some cases a near monopoly (Wellington’s Combined Taxis) taxi companies have had little incentive to invest in technology or improve customer service. Taxi fares have risen while wages or salaries for many workers have remained static or even declined.
Uber presents itself as an answer both to the backwardness and high fares of the taxi industry and also to unemployment; it is very easy to work as a contractor with Uber compared to the tests, permits and costs associated with becoming a taxi driver. However, as Uber drivers are not employees they bear all costs associated with providing, running and maintaining their vehicles and receive no holiday or sick pay. Uber has no responsibility for a driver’s safety or their conduct. It is unclear if an Uber driver could earn the minimum wage if they drove full time. What is clear is that Uber takes 20% of every fare, in return for allowing the drivers to be connected to the app. Uber drivers are also not guaranteed the minimum wage, or any income at all. The nature of this arrangement is therefore the opposite of what might be called ‘secure’ work.
Taxi drivers and taxi companies oppose Uber because it affects their livelihoods on one hand and their profits on the other. Internationally taxi drivers have attacked, harassed and blockaded Uber drivers and taxi companies have sought to challenge the legality of Uber’s operations. In some cases unions have sought to improve the rights of Uber drivers by staging legal challenges to their status as contractors: the California Labor Commission has ruled that Uber drivers are in fact employees, rather than contractors, which completely undermines Uber’s business model. In New Zealand, with taxi drivers already contractors the challenge to Uber has been waged by the New Zealand Taxi Federation, who has convinced the Government to recommend introducing compliance and safety regulations to Uber drivers, similar to those required of taxis.
Increasing regulation of Uber drivers or supporting a local taxi company is not the answer; competition between workers for insecure income hurts working people more than it will ever hurt bosses. In reality Taxi drivers and Uber drivers are in the same boat. As Socialists, we should always argue for maximum unity between working class people. The issue raised by this conflict is the nature of transportation under the capitalist system. Business owners see it simply as a way to make a profit, rather than as a vital social need. Because transport forms such a large proportion of working people’s expenses it is entirely understandable that many are attracted to the low cost of ease of using Uber. But capitalism is forcing upon us a false choice; in reality we have the means to provide transport for everyone that is also low cost. We argue for a huge immediate programme to develop green public transport that will provide sustainable well-paid jobs for the workers in that industry. This should extend to suburban and rural areas, which would allow workers greater movement and flexibility regarding employment opportunities. Only a socialist system will make this possible.