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Jul 29

Uber’s Mounting Labor Issues and What it Means for Business

By: Samuel Wiles

Recently, Uber has suffered an array of public relations setbacks due, in part, to poor treatment of its own workforce.  Consumers today are highly conscious of the internal operations of businesses and sometimes react to negative press affecting those businesses. Issues facing Uber include breaking strikes, classifying drivers as independent contractors, and fostering a hostile work environment. If these issues are not quelled sooner than later, they could cause lasting damage to Uber’s reputation.

Uber’s labor relation issues have spilled beyond its offices, drawing the ire of social activists and unionized labor for either intentionally or inadvertently attempting to break a taxi strike. After President Trump enacted his “travel ban,” the New York Taxi Workers Alliance stopped service to JFK airport because its workforce, which has a sizeable Muslim representation, opposed the ban.[1] Simultaneously, Uber deactivated its surge pricing for rides to and from JFK, thus undermining the taxi workers’ strike.[2] This move spurred some users to delete the Uber app in protest, however, the protest was mostly directed at Uber’s apparent approval of President Trump’s act and less at the negative effect Uber’s actions had on taxi workers and similarly situated workers.[3] Ian Bogost notes in the Atlantic, “political action and political anger still appear far more easily motivated by hostility against identity than against material,” like labor relations in in this case.[4] Here, many Uber users knew to be mad at Uber; they just did not know why to be mad at Uber. But, Uber’s choice to disrupt its competitor’s strike displays hostility towards organized labor that goes beyond its own offices.

Uber also seeks to exert more power over its drivers by having them classified as independent contractors, instead of employees. By classifying its drivers as independent contractors, Uber is effectively able to prevent those drivers from unionizing and and engaging in collective  bargaining.[5] However, some drivers have fought back, making modest gains against Uber. In New York, for example, an administrative law judge ruled the drivers were Uber employees because “Uber exercised sufficient supervision and control over substantial aspects of” drivers’ work.[6]  That said, Uber has also had multiple victories across the country and some states have passed legislation declaring that ride-sharing drivers are contractors, thus leaving the status of the drivers open for debate.[7]

Top officers and other staff, who are categorically considered to be employees, have recently alleged that   Uber, as a corporation, fosters a hostile work environment and that there is pervasive sexual harassment in the workplace. Examples of this include employees groping female co-workers, homophobic slurs, and violent physical threats.[8]  These incidents do not paint Uber in the best light, but to its credit, Uber recently completed a full assessment of its workplace practices and promised to implement those recommendations in an attempt to improve its workplace culture

Uber’s users, and the general public for that matter, react to the way Uber treats its workforce. After the incident at JFK in January, at least 200,000 Uber users deleted the app (although it is plausible many of those re-downloaded it soon after). Additionally, Uber’s main competitor, Lyft, has eaten away at Uber’s commanding share of the market.[9]  If Uber is serious about improving not only its image and profitability, but also the quality of life for all its employees (and contractors) it will move to improve its workplace culture and labor relation practices in the future. If it does not, it is possible that Uber’s short-term losses to its competitors could become endemic and could severely weaken the economic success of the company.

 

References

[1] Ian Bogost, Is #DeleteUber Good for Workers’ Rights?, The Atlantic Monthly, Jan. 31, 2017, https://www.theatlantic.com/technology/archive/2017/01/delete-uber-campaign/515112/.

[2] Id.

[3] Id.

[4] Id.

[5] Dan Rivoli, N.Y. judge grants Uber drivers employee status, New York Daily News, June 13, 2017, http://www.nydailynews.com/new-york/n-y-judge-grants-uber-drivers-employee-status-article-1.3245310.

[6] Id.

[7] Id.

[8] Mike Isaac, Inside Uber’s Aggressive, Unrestrained Workplace Culture, New York Times, Feb. 22, 2017, https://www.nytimes.com/2017/02/22/technology/uber-workplace-culture.html.

[9] Adam Vaccaro, With Uber in Chaos, is this Lyft’s Time to Shine?, The Boston Globe, June 15, 2017, https://www.bostonglobe.com/business/2017/06/15/with-uber-chaos-this-lyft-time-shine/fU1OyTHnwkEfjlWDnWSJyM/story.html.

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