Sarah Holder is a staff writer at CityLab covering local policy, affordable housing, labor, and technology.
Starting Thursday, high-performing Uber drivers can earn tuition-free online education from Arizona State University.
Over the years, Uber has made one thing abundantly clear: The ride-hailing company’s relationship with its drivers is not boss-to-employee. Traditional employers—in the U.S. at least—generally offer healthcare, regular salaries, and benefits to full-time workers. Uber’s only real stated obligation is to program an app.
But recently, the company has been working to tighten its bond with the workers that use it. The latest example came today, when Uber announced it will begin providing a new perk to eligible drivers (or their loved ones): free online education through Arizona State University. That’s the biggest benefit of many that will be doled out through the company’s new driver performance rating system, Uber Pro. The company begins beta-testing the system in eight regions this week.
“This is a new way for us to recognize drivers on Uber who have really shown their commitment, and the quality service that they’ve delivered,” said Ali Wiezbowski, Uber’s product lead.
For the duration of the pilot—which Uber hasn’t yet defined—drivers who maintain a rating of at least 4.85 stars and keep their cancellation rates low can start earning points on each trip they make, in pursuit of ascending Pro statuses: Partner, Gold, Platinum, or Diamond. Drivers in the eight beta regions will be able to use the points they would have accrued over the last three months to start anywhere from Partner to Platinum on day one.
In Seattle, Chicago, New Orleans, Phoenix, Orlando, Tampa, Denver, and all of New Jersey, driver statuses will be assessed every three months, and the perks will unfold like a frequent flyer program. Some address driving expenses, which take a big chunk out of drivers’ earnings. Research from the Economic Policy Center found that compensation for the average Uber driver comes to $11.77 an hour; after paying things like maintenance fees and Uber’s commission, that’s closer to $9.21. Company perks like coupons on car maintenance in certain shops, cash back at gas stations, and free dent repair could help offset those costs. Others will help drivers earn more on each ride: Platinum and Diamond drivers can command rates that are up to six percent higher than their peers. Pro driver earning averages might soon look better.
But some rewards are intended to help drivers pursue opportunities out of the car. In conversations with hundreds of drivers, Wiezbowski and her team found that more than a third spoke English as a second language, and that more than half said they planned to start their own business in the next five years. “Many of them told us it can be hard to get started,” she said.
Higher education could make it easier. Through Uber Pro, any Platinum- or Diamond-status Uber driver who has completed at least 3,000 lifetime rides qualifies for a full ride to one of three online offerings at ASU: any traditional online undergraduate degree, classes in an English language program, or a certification in entrepreneurship. (Drivers still have to qualify for the degree: If their incoming GPA isn’t high enough, for example, they can go through ASU’s “earned admission” program first, paying $400 per course; then get the free ride after passing four classes with a 2.75 average GPA.)
Drivers can also choose to pass on the free tuition to a spouse, domestic partner, child, sibling, parent, legal guardian or dependent. “Drivers told us that supporting their families was one of the main reasons they get on the road every day,” said Daniel Danker, who leads driver product development. “We heard that, and heard that consistently.”
Many traditional companies reimburse their employees for continuing ed opportunities, but Uber is the first ride-hailing company to offer an education package this robust. Last year, the firm’s main U.S. rival, Lyft, started offering discounts and some federal financial aid towards certain online education programs, shaving off thousands but not eliminating costs entirely. The closest parallel to Uber’s initiative may be the one offered by Starbucks, which has partnered with ASU since 2014 to offer free online tuition to about 7,200 employees working an average of 20 hours a week through its College Achievement Plan. After a session wraps up later this fall, that program will have graduated more than 2,000 Starbucks students, estimates Phil Regier, dean for educational initiatives at ASU. Through the Starbucks plan, however, only employees who are also veterans or active military can transfer their credit to family members.
Once Uber Pro’s pilot period is over, Regier says, Uber’s model could reach Starbucks’ scale or surpass it. He called the program “groundbreaking.”
The scholarships program could be a win-win for the scandal-plagued brand and its cash-strapped drivers. Since the ouster of controversial founder Travis Kalanick in 2017 and the arrival of current CEO Dara Khosrowshahi, Uber has been engaged in a safety- and sustainability-focused charm offensive. Free driver tuition fits in with that makeover. “The honest answer is that consumers don’t want to use their service if they don’t feel good about the drivers,” Regier said. “And one way to feel good about the drivers is to know that Uber as a company is treating its drivers well.”
The ASU partnership has improved Starbucks’ reputation among customers already, he said. The university has helped with other sorts of corporate damage control: After a Starbucks employee called the police on two black men waiting for a friend in a Philadelphia shop, the pair were given free ASU tuition as part of their settlement.
Uber could be making a bet that, to get the full ride, drivers will stay on the road—not only in order to unlock the scholarship, but also to get the most out of the education. Companies invest in tuition benefits to increase the value of each employee‚ according to a 2002 working paper by Peter Cappelli, a professor at the University of Pennsylvania’s Wharton School of Business. In Uber’s case, drivers might perform better if their English skills improve. Starbucks employees who go to ASU have advanced within the company at three times the rate of other partners, said Regier. Those “quality” employees might also choose to “stay on the job longer, at least in part to keep making use of that benefit,” Cappelli writes.
That could help give Uber an edge, because there’s currently a lot of driver turnover. One study found that 68 percent of Uber drivers leave after six months on the job; another revealed that 60 percent of people participate in the transportation gig economy for only three or fewer months per year.
Uber drivers have no obligation to stay with Uber once their degree is complete, said Wiezbowski. To remain eligible for their scholarships, though, drivers do have to maintain their Platinum or Diamond status while taking classes. (If “life happens,” she says, they can take a three-month break from the app.)
Uber has long insisted that it’s merely a technological middleman connecting self-employed drivers with their passengers, but that relationship appears to be shifting. Drivers in the U.K. went on strike this month over better pay and conditions, arguing that they deserve the same treatment as workers, not independent contractors—and that some of them had been booted unfairly from the app.
Since Khosrowshahi took over last year, Uber has begun to acknowledge its outsize role in drivers’ lives, working to improve its reputation among workers and expand supports for them. With more clearly defined incentives and paths to success, the new Uber Pro platform could provide greater transparency to drivers who distrust the algorithmic overlord that rules them. The scholarship program could certainly help sell Uber’s benevolent rebrand. But it could also be a sign that, to make their businesses more humane, even brash gig-economy companies are looking to more traditional employers for direction.