Uber attracted drivers with incentives using investment funds after its establishment in 2009, but after the network was formed, it switched to a strategy of reducing incentives to cut costs. As a result, the drivers suffered greatly from the sudden decrease in allowances and long working hours. In fact, in 2019, Uber announced that it would "reduce driver incentives to improve financial performance," which began to cause dissatisfaction among drivers from the planning stage.
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[1] Uber's Initial Growth and Changes in Incentive Policies
Initially, it was able to attract a large number of drivers thanks to abundant investment funds, but after reducing incentives, drivers' earnings plummeted. The costs that drivers have to pay directly before driving, such as the time and fuel costs incurred when picking up customers, and vehicle maintenance costs, further eroded profits. Many drivers are experiencing the reality that "the profit per hour is low," with about 81% of dispatch requests being rejected.
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[2] App Dispatch System and 'Competitive Bidding' Structure
Uber's dispatch system makes drivers offer different prices for the same order. As a result, only the driver who makes the lowest bid gets the opportunity, which ultimately creates a structure in which drivers compete with each other, leading to a decline in revenue per trip. In addition, due to the limitations of the in-app navigation, the actual arrival time differs from the time displayed on the app, making it difficult to secure profits even in unexpected additional waiting times or traffic congestion situations.
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[3] Supreme Court Ruling in 2021 and Subsequent Changes
In 2021, the Supreme Court ruled that Uber drivers are workers, not self-employed, and decided that they should be guaranteed basic labor rights such as minimum wage, vacation pay, and pensions. However, Uber applied this ruling in a way that further lowered the drivers' income, resulting in unfavorable results for the drivers, contrary to the intent of the ruling. There is a reaction that "I expected our lives to change when the law changed, but it has become even worse."
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[4] Safety Issues and Poor Working Environment
The working environment of drivers is not just a matter of income, but also serious problems with safety issues and psychological isolation. In some cases, assault by passengers, and even fatal incidents, have occurred, and the dangers faced by drivers are increasing day by day. In one case, a driver who accepted a dispatch related to a hospital was attacked after waiting for more than 30 minutes, and cases of life being threatened have been reported. In addition, physical and mental fatigue and isolation due to long hours of driving are also major concerns for drivers.
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[5] Collective Action and the Need for Labor Solidarity
In the midst of these difficulties, drivers are taking collective action. On Valentine's Day, cases of drivers from Uber, Addison Lee, Bolt, etc. logging off from the app and striking spread nationwide, showing that drivers are "no longer able to endure." Driver groups are saying, "We are a pivotal presence in London," and are uniting to demand better wages, a safe working environment, and fair treatment.
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[6] Future Challenges and Solutions
The poor conditions, dispatch system, and safety issues of Uber drivers are not just a problem for Uber, but a common problem faced by all gig economy workers. In fact, drivers are demanding a transparent dispatch system, reasonable cost compensation, and active intervention by the government and regulatory authorities. Through this, improvement of the working conditions and safety guarantee of the drivers must be achieved, and the sustainable development of the platform economy will be possible in the long term.
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Uber's rapid incentive reduction and opaque dispatch system are causing real income reduction, safety issues, and mental isolation for drivers. Accordingly, drivers are uniting and making efforts to regain their rights through collective action and strikes. This wave of change is not a problem that can be changed overnight, and it once again shows that it is an important issue that platform companies, governments, and society as a whole must consider and improve together.
*Source: [Novara Media]
– The REAL Reason You Can’t Get an Uber | Novara Reports
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