Today, I wanted to share an excerpt from a post I wrote for Forbes this week. With the recent California Labor Commission ruling, it’s brought a lot of media attention to the issue of whether or not Uber drivers are in fact employees. It’s hard to say which way the courts will ultimately go but I think there is a better solution.
I’m curious to hear your thoughts on the topic so after you’re done reading the article, please leave a comment below. I’ll also be sharing a full breakdown of the recent CA ruling and what it means for drivers going forward on Monday.
Over the past few years, we’ve seen a dramatic shift in the labor workforce towards an on-demand, flexible style of employment. Companies like Uber, Lyft and Postmates are at the forefront of this revolution yet they don’t technically employ much of their workforce. Instead, they use an army of independent contractors in order to fulfill services, transport goods and move people.
Uber is the most famous of these on-demand start-ups and it’s also a company that currently boasts 1 million drivers around the world. Uber is well-known for offering a flexible work schedule that ‘lets drivers be their own boss and set their own hours’. But what many drivers soon discover is that although the flexibility is unmatched, there aren’t a whole lot of protections and benefits afforded to them. Drivers miss out on everything from the typical HR type services (health insurance, 401k, etc) to more basic rights like minimum wage and unemployment.
With an ever increasing supply of drivers and inability to set their own rates (drivers in certain markets have seen 3 fare cuts over the past year), drivers could very easily be earning below minimum wage and not even realize it. The reason for that is that many of them fail to take into account maintenance, depreciation and even taxes. And for good reason – it’s hard to calculate the cost of operating your vehicle on a per mile basis and when you’re living paycheck to paycheck it’s a lot easier to just worry about it later.
Many drivers that I’ve talked to don’t think about their earnings on an hourly wage basis either – they work until they hit their goal of $100 or $200 for the night, or whatever they need to pay the bills. It’s easy to subtract gas from that figure and come up with your nightly earnings but how do you take into account the new transmission you’ll need in 50,000 miles or a new car completely? Obviously, the situation isn’t perfect for drivers but the opposite end of the spectrum could be even worse.
Read the rest over on Forbes: Could Dependent Contractors Be The Answer For Uber?