Sarah Holder is a staff writer at CityLab covering local policy, affordable housing, labor, and technology.
A new report from Georgetown University reveals wage and other challenges faced by Uber drivers in Washington, D.C., yet many say they plan to keep driving.
In 2016, a group of 40 Washington, D.C., Uber drivers sat down with Georgetown researchers to offer a window into life on the road. Many of them said that they were spiraling into debt; that their wages were constantly fluctuating, often with little notice; that the job threatened their mental and physical health—and that, if given the option, they would keep right on driving.
A report released today, out of Georgetown’s Kalmanovitz Initiative for Labor and the Working Poor, includes excerpts of those conversations and findings from surveys taken by the drivers, whose names were changed to protect their identities and their jobs. The report offers only an anecdotal snapshot from a small sample size of drivers, taken during Uber’s earlier days. In the years since the interviews were conducted, the company has hired a new CEO, introduced tipping, and rolled out new driver-friendly promotions and incentives, like an Uber Pro rewards program in 10 cities, and free online education benefits.
“Driver-partners are the heart of our service—and Uber would not be what it is today without them,” an Uber spokesperson said in a statement. “Building on what we’ve already introduced ... we’ll continue to improve the experience for and with drivers, every day.”
But a few of the pain points drivers cited in 2016 have held constant, and—by Uber’s own admission in its recent IPO filing—others may only get more painful.
Gigs like Uber driving are advertised as the perfect side hustle, with low barriers to entry and flexible hours. But to start—and keep—working, Uber drivers need a car, gas money, insurance, maintenance, and, if they want top ratings, maybe perks like mints and water bottles. Those things don’t come cheap. The researchers found that, in order to start making money, drivers had to be prepared to spend a lot of it.
Cars themselves were the biggest expense. The research team interviewed Aman, an Ethiopian immigrant who bought a Lincoln Town Car to qualify for Uber’s then-new private car service, Uber Black. To afford it, he took out a $35,000 loan. Then Uber Black “changed a policy about how old cars could be” to qualify, according to the report, and Aman started driving for UberX instead. But the weekly wages weren’t high enough to meet his car payments. Eventually, he filed for bankruptcy.
Four other drivers used Uber’s Xchange rental car program, which at the time connected drivers directly with a bank that offered subprime car leases. After those car payments of $170 a week and Uber’s commission, one driver said she earned only $5 an hour. Another, who paid $138 a week for her car, decided to quit after a year of driving six to seven days a week, finding herself “behind on bills.”
That Xchange program was discontinued in 2017, after the Federal Trade Commission alleged that the company misled drivers about its terms: “[F]rom at least late 2013 through April 2015, drivers who participated in the program paid more than advertised, received worse rates on average than consumers with similar credit scores, and are bound by leases with mileage limits,” according to a blog on the FTC’s website. Now, Uber advertises partnerships with third-party rental services, like Fair, which leases vehicles for not much less: Prices start at $130 a week in most states. In California, Uber offers a Fair promotion, where drivers pay $185 a week, but are able to get that amount back as a credit from Uber if they complete 70 trips that week.
In all, 33 percent of the drivers the research team spoke to in 2016 reported falling into a similar debt trap.
“What struck us during these conversations with drivers, is they didn’t understand the terms of the debt they had taken on,” said Katie J. Wells, the author of the report and a postdoctoral research fellow at Georgetown’s Kalmanovitz Initiative. “It’s one thing to work a crappy job, it’s another thing to work a risky job, and it’s quite another thing to take on debt in order to maybe get a wage.”
Part of the problem, she found, is that drivers didn’t understand how much money they were actually earning. “It’s really hard to talk about that because it changes every time they change the rules,” said one driver, called Suzanna.
While most drivers interviewed (more than 80 percent) knew how much Uber skimmed off their fares in commission, 38 percent were unclear on the calculation process behind each original fare, and didn’t understand the particulars around insurance and tax filing. This wasn’t just a problem for new drivers, the report says: 70 percent of respondents had been driving for the app for at least seven months.
Half of all drivers interviewed described working on the platform “as a game to be won.” As one driver put it, “It’s the driver trying to outsmart Uber and Uber trying to outsmart the driver.”
In 2018, Uber embarked on “180 Days of Change,” to listen to and address driver concerns. They came out of the project with a new driver app interface, designed with an eye towards transparency. But Uber’s algorithmic calculations are still opaque by design, and they’re constantly changing, says Alex Rosenblat, a tech ethnographer and the author of Uberland. ”[T]his is a workplace characterized by ever-shifting, experimental working conditions,” she told CityLab in an email last month.
Besides the mental toll, drivers shared other difficult experiences—one man said he was assaulted for refusing drugs; another said he was robbed at gunpoint; one woman described “hostile” passengers “talk[ing] trash.” Thirty percent of drivers reported feeling unsafe, and none of the drivers interviewed said they felt they could rely on Uber in an emergency.
Instead, drivers have turned to each other. Ad hoc ride-hail support groups have cropped up in places like New York City, where two Uber and Lyft drivers took their lives within months of each other this year and last year. The drivers Wells interviewed didn’t have that same support system in D.C.: 75 percent of them had never “had a drink or meal with anyone else who had ever driven for Uber.”
Drivers have also turned to other modes of labor organizing. Last month, a coalition called Rideshare Drivers United led ride-hail drivers for both Uber and Lyft in Los Angeles in a 25-hour blackout in protest of Uber’s per-mile pay cuts. (Uber says it lowered rates by 25 percent after raising them by the same amount in September 2018, to align its pay with other ride-hail companies.) But since Uber drivers are considered independent contractors—a classification that the company says is crucial to its financial viability, and that offers drivers more flexibility—they can’t form unions, or strike in the traditional sense.
“The thing is, we don’t have union,” said Aman. “And nobody going to listen to us, so we don’t have anybody, so what can you do? Nothing.”
Despite these rumblings, 45 percent of the drivers interviewed told the researchers that they wanted to continue driving for at least six more months, and half would recommend the platform to a friend. Wells attributes this partly to the rise of on-call scheduling, which makes other non-gig, low-wage jobs even more precarious. At service jobs, shifts are often set by someone else, and determined at the last minute. With Uber, drivers can choose their own hours—unless they’re chasing rush-hour prices or special incentives, which Rosenblat argues can replicate the feeling of on-call scheduling.
“It seems logical why people think it’s an okay risk,” said Wells. “The other thing contributing is that … a lot of these people’s incomes have stagnated—they haven’t seen increases over the past five to ten years, and so they’re looking for extra income.”
Even if drivers haven’t yet left the platform en masse, these findings may matter to Uber as much as they matter to policymakers, because disgruntled drivers are bad for business. As it prepares to IPO, Uber is seeking a $100 billion valuation. In its S-1 filing, which it released publicly last week, the company highlighted driver dissatisfaction as a key “Risk Factor” for investors, while suggesting it may rise as Uber pushes to “reduce Driver incentives to improve our financial performance,” and invest in autonomous cars, pushing human drivers off the road. Uber also expressed concern over future driver protests:
Driver dissatisfaction has in the past resulted in protests by Drivers, most recently in India, the United Kingdom, and the United States. Such protests have resulted, and any future protests may result, in interruptions to our business. Continued Driver dissatisfaction may also result in a decline in our number of platform users, which would reduce our network liquidity, and which in turn may cause a further decline in platform usage. Any decline in the number of Drivers, consumers, restaurants, shippers, or carriers using our platform would reduce the value of our network and would harm our future operating results.
Cities can help mitigate some of the issues D.C. drivers raised, says Wells, as they are uniquely positioned to regulate Transportation Network Companies. Yet D.C. is lagging. New York City instituted a ride-hail minimum wage this year of $17.22 an hour after expenses, which Wells challenges D.C. to match.
Change may start with getting ridership data from these companies. In 2018, the D.C. Council passed a data-sharing requirement for ride-hailing services operating in the city—but those quarterly statistics can only be requested if they have implications for transportation planning or public safety, not labor; and they’re exempt from Freedom of Information Act Requests, meaning few outside the D.C. government can access them. Instead, Wells proposes creating a new, publicly funded commission convened specifically to study companies like Uber.
“We as a city want to take seriously our role to govern, and doing so means evaluating the impact of these companies on the city,” she said. “Be it the workforce, be it pollution, be it congestion, be it transportation equity.”