After court cases and footage of its angry boss, the minicab app is losing its shine
Over recent months Ive developed a conflicted relationship with my Uber app. On the one hand, Ive watched with growing unease as the company has been plagued by revelation after revelation, raising questions about how it does business. Theres the fundamental question about Ubers relationship with its drivers: are they self-employed, as it claims, or is Uber taking advantage of people who should be employees?
And in the last month, it has faced serious allegations about sexual harassment, as early-stage investors have lambasted its destructive culture. Then theres the footage of the CEO shouting at a driver who questioned him about cuts to what Uber pays its drivers. When I request an Uber, what exactly am I complicit in?
My finger has hovered over the delete button on more than one occasion. So far, I havent pressed it. Yes, theres the price it usually costs much less than taking a black cab. I dont think it makes sense to pay more for a cab driver who has spent hours swotting up on the knowledge in a world where a satnav can plan a route more effectively using real-time traffic data. But its more than that: when we increasingly manage our lives using on-demand apps, Ubers seamless interface is seductively convenient.
Uber would have me believe that when I request a ride, Im not buying a service from the worlds largest minicab firm. Instead, Im buying access to a piece of sophisticated tech that matches me with an individual offering a service. But Uber is surely more than an app: its a company that provides real people with a livelihood. Most people would probably think that makes Uber an employer. But that is something which Uber aggressively contests.
By classifying its drivers as self-employed, Uber not only saves on its tax bill, it shifts a huge amount of risk on to them. They have to buy their own cars and petrol, cope with periods of low demand, and finance their pensions and time off for sickness and holidays. But, according to Uber, everyone is a winner. Consumers get the convenience and low prices; drivers have the flexibility to work when they want. It points out that 87% of drivers surveyed say theyd recommend driving with Uber to others.
There are Uber drivers who would beg to differ, including the 80 who submitted testimonies to Frank Field MP. Many argued that the fee they take home amounts to less than the minimum wage after deducting costs, and that once theyve shelled out for a new car using a loan purchase agreement, theyre effectively trapped into driving for Uber, even if it unilaterally drops the prices it pays them.
The extent to which drivers are satisfied in the here and now is irrelevant to whether they are employees or self-employed in the eyes of the law, and the rights to which that entitles them. In a scathing ruling last year, an employment tribunal ruled that Uber drivers are, in fact, employees, because Uber exerts a degree of control over them including dictating the price they can charge consumers that should not exist between a company and its self-employed contractors.
Uber is appealing but, if it loses, it will probably have to change its contracts to reflect that drivers are employees. I hope that happens. Prices would undoubtedly go up, but it would settle some of my qualms about using the app.
But they wouldnt go away altogether. My love-hate relationship with Uber is an inherent feature of its disruptor status. Its cutting-edge innovation brings benefits: a more convenient, customer-focused service than any minicab firm Ive ever used. But it also has downsides. It emerged last week that Uber had been using geolocation data, credit card details and social media accounts to identify law enforcement officials in US cities running sting operations against it, and ensuring they dont get picked up by its cars. Using software to avoid regulation and law enforcement is both incredibly smart and incredibly dodgy.
As a consumer, its hard to know what Ubers endgame is. Despite a rapid growth in its users, its reported losses have been eye-watering. Some speculate that Uber is effectively subsidising its customers rides to drive all other cab operators out of the market. According to this logic, the fares will eventually go up. If thats the bet investors are making, it seems risky to me: theres only so much consumers will be willing to pay, and it doesnt seem inconceivable that a rival platform could enter the market.
But there are hints of a more ambitious gameplan. Uber has been investing heavily in driverless technology in the hope that, one day, it might not need to use human drivers at all. While its suffered setbacks, Uber has a huge competitive advantage in the market: it owns reams of smart data on traffic flows that will be critical to developing the technology. It is also making the data freely available to urban planners, presumably influence planning, which could give it an even bigger advantage.
For me, Uber illustrates just how more complicated it is becoming to exercise informed consumer choice. I could just banish the app from my phone forever, but deleting a piece of smart tech that makes my life easier doesnt feel very satisfying. Sure, Id feel better about using it if its drivers were employees. But Id still be wondering about the long-term consequences of requesting an Uber.
Am I committing myself to a world where an Uber driverless car might be the only option for getting a cab? I suspect my uneasy relationship with Uber is set to continue for a while yet.