Fair Pay for Uber Driver
In most countries, Uber drivers are currently classified as self-employed contractors without permanent employment contracts, which means they are not entitled to many legal protections like minimum wage or holiday pay. In what follows, I argue that governments should reform legal systems which classify Uber drivers as self-employed contractors so that they are instead classified as employees of Uber with permanent employment contracts.
My argument can be formulated as follows:
(P1) Workers should have employment rights that prevent them from being coerced into doing things which go against their interests.
(P2) Uber drivers are coerced into doing things which go against their interests because they are classified as self-employed contractors and do not have permanent employment contracts.
(C1) Therefore, governments should intervene to reform legal systems which classify Uber drivers as self-employed contractors, so that they are instead classified as employees of Uber with permanent employment contracts.
P1 is a normative claim which is generally accepted across liberal and libertarian theories of economic justice. A common way of compensating for the asymmetric power relationships which exist between employers and employees is through the concept of informed consent: when an act has been voluntarily chosen, the personal autonomy of the agent has been respected and they can be held responsible for their action. However, there is disagreement over the boundaries of consent. The concept of contextualized consent helps to delineate what counts as morally acceptable consent in contractual arrangement: contractual procedure must be fair, and the content should not involve one party consenting to conditions that harm their reasonable interest. In other words, employment contracts ought to safeguard workers against being coerced into doing things which go against their interests.
P2 is an empirical claim. To prove this claim, I need to show that (1) the employment status of Uber drivers is causing them to be coerced and that (2) the degree of coercion Uber drivers are subjected to is beyond an acceptable threshold – this is what doing things which go against their interests signifies – given that most capitalist economic relations involve some degree of coercion.
On the first point, the gig economy represents a break from the ‘standard employment relationship’ – where workers expect a stable, socially protected, and dependent job with working time and pay regulated to a minimum level by employment law. Uber brands itself as a technology company, rather than a taxi operator, and describes drivers as ‘partners’ not ‘workers’ or ‘employees’ – this is why Uber drivers do not have permanent employment contracts and are not entitled to a minimum wage, guaranteed hours, or holiday and sick pay. This allows Uber to minimize labor costs, shift the risk of not having passengers onto drivers, and circumvent many employment laws. This also means the interests of Uber are often in direct conflict with drivers’ interests: it is in drivers’ interest to keep fares high so they can earn more from each trip, while it is in the interest of Uber to keep fares low so they can keep fare rates competitive. This means Uber has an incentive to coerce drivers into doing things which go against their interests.
On the second point, Uber drivers are coerced beyond an acceptable threshold because they are subjected to various forms of algorithmic domination which exacerbate informational asymmetries between drivers and management, allowing Uber to exert excessive control over drivers. Algorithmic domination occurs iff (if and only if) an individual is subjected to dominating power directly by an algorithm, without an intermediate human playing a role in interpretation or decision making. Consider the following two examples of algorithmic domination which exacerbate informational asymmetries: dynamic pricing and forward dispatch.
Dynamic pricing involves pricing different jobs dynamically so that the remuneration of workers is altered by algorithms in real time without an opportunity for workers to control or contest these changes. Uber uses dynamic pricing to induce drivers into working at particular periods and on particular tasks, by changing their incentives structure on a job-by-job basis. This allows Uber to exercise excessive power over how long drivers work and the compensation they earn, while allowing them to maintain a flexible workforce which is only paid for specific trips rather than time logged onto the app. Uber also uses an algorithm called ‘forward dispatch’ which dispatches new rides to drivers before the current one ends. This restricts drivers’ autonomy because they do not know a passenger’s destination beforehand, meaning their ability to decide whether a booking is convenient is severely limited. Forward dispatch shortens waiting times for passengers, but it also overrides drivers’ self-control by encouraging them to work for longer: this can work against drivers’ interests by increasing the number of drivers on the road which decreases fare rates.
These forms of algorithmic domination exacerbate informational asymmetries in two ways. First, they make the lines of communication between drivers and management one-way, in that the app allows Uber to capture data on every aspect of the work process but offers limited opportunities for drivers to communicate with Uber to discuss performance or negotiate aspects of their employment contract. Second, they mean drivers lack a direct line of communication with management and are hindered from knowing whether it is a human or algorithm commanding them to do things, meaning there is no opportunity for management to make concessions and compromises which would be expected from a human manager. These informational asymmetries indicate that Uber drivers are in fact coerced into doing things which go against their interests.
These premises point to C1: governments should intervene by reforming legal systems so that Uber drivers are classified as employees of Uber with permanent employment contracts. These reforms counteract these informational asymmetries in the following ways. Reforming legal systems so that Uber drivers are classified as employees of Uber with permanent employment contracts will increase the bargaining power of Uber drivers by giving them more power to negotiate the terms of their employment contract. For example, they could demand two-way lines of communication with management, so that drivers have a human manager as a point of contact for inquiries and complaints. Moreover, they could demand that certain forms of algorithmic domination are removed (or limited) so that they do not subconsciously influence drivers’ working patterns. In these ways, C1 would limit Uber’s ability to coerce drivers into doing things which go against their interests.
An objection to my argument could be made on the grounds that the employment status of Uber drivers increases their autonomy because it allows for flexible working arrangements which they would not be entitled to on a permanent employment contract.
The desire for flexible working arrangements has been a two-way street. Shifts in culture and social practices since the 2008 recession have made flexible working arrangements more desirable for many workers and claiming that Uber has in some way imposed flexible working arrangements on drivers wrongly implies that they lack any sense of agency. Many Uber drivers are aware of the flexible working arrangements and actively choose to work as drivers because of the freedom this gives them to pursue other things. For example, a reasonably well-off university student might occasionally drive for Uber to earn some pocket money; in this case, they contribute to Uber voluntarily and have perfect freedom of exit. This university student would not be coerced into doing things which go against their interests because of their employment status. Quite the opposite, their employment status would increase their autonomy by allowing them to only work at convenient times, without being obliged to work a certain number of hours.
In response to this objection, I argue that even if this is the case for some Uber drivers, it is not the case for most Uber drivers who are at the lower end of the income distribution scale.
The example of a well-off university student infrequently accepting gigs does not reflect the experience of most Uber drivers. The average wage of an Uber driver is $9.21 per hour, which means they earn less than what 90% of other workers earn. Furthermore, the income earned by Uber drivers is often a substitute (not an addition) for other forms of income. In fact, many people become Uber drivers because they have recently lost a full-time job – sometimes due to the sharing economy making their old jobs less profitable – and are trying to replace the income they have lost. This suggests that many Uber drivers do not contribute to Uber voluntarily and do not have perfect freedom of exit. This responds to the above objection by highlighting that even if some Uber drivers (like reasonably well-off university students) have more autonomy, most Uber drivers (who are generally at the lower end of the income distribution scale) have less autonomy, by being self-employed contractors without permanent employment contracts.
For most Uber drivers, having a permanent employment contract will increase their bargaining power and give them greater powers of exit, by entitling them to an enforceable minimum wage and workplace pension – such reforms have recently been enacted in the United Kingdom, where the Supreme Court also ruled that Uber drivers must be considered working whenever they are logged onto the Uber app. This would mitigate the impact of dynamic pricing and forward dispatch, which would no longer have an impact on the amount Uber drivers earn because their wages would be paid according to how long they have been logged on to the app, and not according to how many trips they take. These reforms would therefore have the effect of transferring risk away from drivers and onto Uber: low fare rates would no longer reduce the amount drivers earn; they would only reduce Uber’s profits. Such reforms are therefore justified because they protect the majority of Uber drivers from being coerced into doing things which go against their interests.