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Legal Struggles In The Age Of Uber-Capitalism: Are Uber-Drivers Workers Or Self-Employed?

01/11/2016 14:59

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There is much talk about the sharing- and gig-economy. The basic idea is that mediated by apps and the Internet, humans share information, data, goods, services, their location, property, or animals. Sharing does in most cases not mean that humans give away something gratis or help each other, as in the case of Freecycle, but mostly involves for-profit businesses such as Uber, Airbnb, Upwork, or Amazon Mechanical Turk.

Just like social media and big data, the sharing economy is a new hype spead by business consultants, who want to create the impression that it is easy to make profits by practicing new economic models. So for example, Lisa Gansky's Mesh Manifesto claims that the sharing economy "conveys extraordinary competitive advantages to entrepreneurs and businesses. [...] The Mesh is that next big opportunity - for creating new businesses and renewing old ones, for our communities, and for the planet". The trouble is just that for many everyday people the contemporary economy means precarious work, insecurity, debt, temporary unemployment, and high levels of inequality. The sharing economy is nothing more than the newest buzzword that tries to ideologically veil capitalism's unjust character.

Uber is a case that well illustrates the problems associated with the capitalist sharing economy. In London alone, there are more than 30,000 Uber drivers. The number of taxi businesses in the UK has increased from 6,435 in 2013 to 7,475 in 2015. Whereas the share of self-employed among all those who are employed or self-employed has increased in Britain from around 13% in 1997 to 15.2% in June 2016, in the transport industry the share has gone up from 14.5% to 18.2% during the same time period. Uber collects 25% of the fare for providing its taxi app to drivers and customers.

Uber explains the imaged advantages for drivers the following way: "Make great money: You can drive and make as much as you want. And, the more you drive, the more you could make. Plus, your fares get automatically deposited weekly. Set your own schedule: Only drive when it works for you. There's no office and no boss. That means you'll always start and stop on your time - because with Uber, you're in charge".

James Farrar, one of the two claimants in the Uber employment case, has a very different view: "[M]any of them [private hire drivers] are prepared to accept less money at Uber to get away from the level of discrimination and exploitation they were receiving from corrupt minicab controllers. [...] [At Uber], they don't have to deal with a human controller, it's been replaced by an algorithm. But the model is just as exploitative, if not more so.

GMB, the union representing private hire drivers, argues that some of its members earned just around £5 in 2015, although the national minimum wage was £6.70. GMB filed a case against Uber to the Central London Employment Tribunal, arguing that Uber drivers are bogus self-employees, who are denied the minimum wage, paid holidays and sick pay. On October 28, the Tribunal reached a verdict.

A first important legal question is whether Uber is a technology company providing an app or a transport company. If it is part of the tech industry, then one can say that Uber just provides a service to both taxi drivers and customers. The point is, however, that Uber does not make money from selling its app, but from charging a rent on taxi rides. The Employment Tribunal ruled that Uber "runs a transportation business and employs the drivers to that end" (§88).

A second issue concerns the question whether Uber drivers are self-employed or workers. A key aspect here is that workers are in a subordinate and dependent position to employers and management control can be exercised. The Tribunal's verdict was that drivers, who have the Uber app switched on, are not self-employed, but Uber-workers. "The drivers provide the skilled labour through which the organization delivers its services and earns its profits" (§92).

According to the ruling, Uber exerts control by hiring drivers and through its app controls customers, fares, trips, default routes, ratings, and complaints (§92). Uber drivers do not have the same contractual freedoms that self-employed persons have: Drivers "do not and cannot negotiate with passengers (except to agree a reduction of the fare set by Uber). They are offered and accept trips strictly on Uber's terms" (§90).

A third matter is how to define the Uber-drivers' working time. The Tribunal found that an Uber driver's working time "starts as soon as he is within his territory, has the App switched on and is ready and willing to accept trips and ends as soon as one or more of those conditions ceases to apply" (§122).

Uber's UK-general manager Jo Bertram reacted to the verdict: "Drivers want the freedom to decide where, when and for how long to drive: being classified as workers could deprive them of the personal flexibility they value. Last month, drivers who used our app in the UK made on average over £16 per hour in fares, after our service fee. Even after deducting costs, this is well above the national living wage". She does not mention the average amount an Uber-driver has to pay for deductibles such as gasoline, car maintenance and insurance, bank loans, etc. Bertram creates the impression that the sharing economy is "immaterial". But the reality is that it contains actual physical resources that need to be paid for.

The Uber employment conflict has several implications. First, it debunks the myth that the sharing economy is fair and grassroots. It rather shows that class conflicts also persist in digital capitalism. Second, it will have implications for Uber drivers and make them eligible to receive the national minimum wage, sick pay, and holiday entitlement. Third, the ruling shows that although digital capitalism's companies operate globally, local, national, regional and international legislation is a way of trying to hold them accountable and exert legal pressure on them. Fourth, it is clear that problems with Uber will continue to persist. So for example in 2015, Uber according to reports paid only £22,134 corporation tax on a UK profit of £866,000 by transferring profits to the Netherlands, where the tax rate is lower. Such facts question Uber's claim that it "helps revitalize local economies".

The capitalist sharing economy will remain a sphere of conflicts and struggles. It might be time that we start transcending digital capitalism with the help of commons-based social production, cultural co-ops, and platform co-ops. The future will show whether a different sharing will not just be possible, but also become actual reality.

The 2nd edition of Christian Fuchs book "Social Media: A Critical Introduction" will be published in early 2017 and will contain a chapter on "The Political Economy of Online Sharing Platforms in the Age of Airbnb and Uber".

Image: By Aaron Parecki (P1020407.JPG) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

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