In June, during the middle of the nationwide rail strike, the demand for cabs skyrocketed in the UK. But instead of taking advantage of it, a group of Uber drivers choose that they would also strike for 24 hours. Hundreds of Uber cab drivers marched towards the company’s London office in Aldgate Tower in protest, whining about the poor pay and the arbitrary management by the algorithm.
It was just another regular day for Uber driver Abdurzak Hadi. The 44-year-old father of three landed in England in 1992 as a refugee, having fled Somalia’s vicious civil war. When he grew up, he became a minicab driver. And after a few years in 2014, he signed up with Uber.
Hadi dropped off his youngest son at school on the day of the strike before leaving his home in north London on his bicycle to assist in directing the demonstration. Hadi is a part of a David and Goliath battle against tech giants as the chair of the radical new union – London branch, the App Drivers & Couriers Union (ADCU).
He was one of the 19 Uber drivers who sued the company in 2015, initially with assistance from the GMB union, asserting that they were employees deserving the minimum wages. Uber argued that all of its drivers were self-employed contractors, as it has claimed across the globe. The Supreme Court ultimately ruled in favour of the UK drivers in 2021, giving them triumph in their legal battle. To secure their rights, they had to fight against Uber’s constant appeals for those six long years.
Hadi was awe-struck during the entire course of the process. He thought, “Wow, how am I one of the guys sitting here in this court – an average person from Somalia, from a deprived background, coming to London, talking to other immigrant drivers, being able to take a huge corporation to court. It was unbelievable. I felt I was part of history.”
Hadi felt good being an Uber driver. He distinctly recalls the excitement he felt at the promised revolution in the cab industry when Uber launched in London. The US startup boasted about empowering entrepreneurs and gave the impression that their algorithm would miraculously match supply and demand, resulting in the creation of well-paying jobs.
Uber was giving drivers huge financial bonuses and giving customers who brought friends on board £50 in credit. In order to undercut fellow competitors, get drivers onto the platform, and control the cab market, it was using billions of dollars in investor money to pay for these subsidies.
Hadi said, “It was honey at that point, yeah honey.”
But prices were quickly slashed. Uber’s invasion of the cab market raised the waiting time as well. The commission charged to drivers was increased from 20% to 25%.
Currently, Hadi claims that it takes him 14 hours to make what he used to make in only five hours during his initial days. He also asserts that, despite Uber’s opaque and changeable price, he believes its commission can occasionally reach even 35 percent or higher.
By 2015, Hadi realized that his family was eligible for tax credits, which are welfare payments for those who are working for low pay because prices had fallen. “So Uber is in effect heavily subsidised by you, the taxpayer.”
Hadi recalls the dawning of truth at the time when he experienced his first faceoff with violence. He saw five inebriated males waiting to get into his car despite having accepted a booking on the app for just four passengers. Since he did not have a licence or insurance for more than four, he declined them. One of them lost his cool and slammed his car door. No friendly controller was available to call. The only way to report was through a message on the app, and he claims he got what seemed to be a cut-and-paste response.
Despite the bad experience, he stayed with Uber because he believed it would provide him the freedom to choose his place of employment. Hadi worked for Uber near Great Ormond Street Hospital while his son Mohamed underwent leukemia treatment. He would accept rides for a few hours at a time before taking over from his wife at Mohamed’s bedside and then returning to work to make more money. However, the flexibility was not as perfect as he had planned; he frequently found himself sent to far-off locations from where he needed to travel in order to return.
In spite of all the efforts Hadi took to save him, his son passed away in 2019. The treatment was often a very painful one and Hadi to this day is haunted by a sense of guilt.
“Was it worth it to put him through it all? You don’t expect to bury your son, you expect the son to bury you. It’s the worst thing that could happen to any parent,” an emotional Hadi said.
He still bypasses Uber trips that take him near the hospital.
According to Uber, it now provides insurance for drivers in emergency situations. Hadi, however, did not think it was necessary to inform Uber about the family’s situation back then.
“There was no human interaction, no one to understand what misery you are going through. It’s a system, and so only the system will get back to you. It’s a system designed to manipulate drivers and squeeze them as much as possible,” he said.
What Are The Earth-Shattering Uber Files?
Mark MacGann, the 52-year-old career lobbyist, who worked for Uber from 2014 to 2016, has admitted that he was the whistleblower of the 124,000 corporate data known as The Uber Files that were given to The Guardian.
The stock of internal emails, texts, and documents of 182 gigabytes was obtained by The Guardian and shared with the International Consortium of Investigative Journalists (ICIJ) and its media partners around the world.
It demonstrates how the ride-hailing start-up transformed into a global giant by utilizing technology, skirting legal requirements, and engaging in aggressive lobbying with governments during the period of its drastic expansion.
The files contain 124,000 records from the period 2013-2017 — which contains around 83,000 internal company emails, memos, presentations, and WhatsApp messages.
Many of those millions of drivers are likely already aware of Uber’s erratic pay structure. When entering new markets, it significantly subsidised drivers to draw in a pool of vehicles big enough to provide customers with immediate service and undercut taxis. The leak shows that Uber sought to reduce what it paid drivers as quickly as it could because these subsidies required spending billions of dollars from investors.
Uber aggressively subsidised rides in each city as it launched, and it planned the price cuts that drivers like Hadi experienced as a devastating loss of income. This was revealed in one presentation to dozens of Uber managers gathered for a summit in the company’s Amsterdam headquarters in January 2015.
Uber spent a lot of money trying to “buy revenue,” as the presentation put it. A senior management spoke about “burning the burn,” or reducing subsidies, at the same meeting.
One of the slides read, “Young city: you are still subsidising your market. Get a real feel for the net fare/hour at which supply scales. Make sure drivers don’t end up making more than they need to stick around.”
The Algorithm Game
In Paris, where Uber had been functioning for a while, the subsidy had been eliminated, and the business was now only offering incentives of $0.10 per hour while generating $23.40 in income every hour. Already, there was a push on the drivers. In Cape Town, original Uber subsidies of $4 per hour were reduced to almost nothing.
66-year-old Derick Ongansie can still clearly recall how those cuts affected him. After taking a vacation from work due to cancer in 2014, he invested in three vehicles to start a business as an Uber driver in Cape Town. Uber’s sales pitches about how much money might be made lured him in. He claimed that the first year was extremely successful and that he could earn up to $290 per day.
But after a year, Uber began to reduce some of the perks it was giving before launching a new service that had a much lower fare.
He said, “That’s when we all started crashing. Uber was taking us for a ride.”
According to him, he made around one-third as much money driving for Uber in his third year as opposed to his first. He calculated his salary typically amounts to less than $1 an hour after expenses including fuel, insurance, phone, and car upkeep. In fact, this was the same as what the other drivers were facing across the world.
Responding to the charges, Uber stated that the amount spent on initial subsidies and the unavoidable cuts were all part of its business model for expansion.
Uber’s head of public affairs Jill Hazelbaker said, “Our interests are aligned with drivers, ensuring they have a positive experience of earning on the platform. Otherwise, drivers would go elsewhere.”
The Uber files revealed that whenever the drivers fought back, Uber made changes to the algorithm to suit its purpose.
In October 2014 in Italy, when Uber had cut prices and driver payments, a manager reported an “attempted strike/mutiny, with extremely low supply, around 50 drivers teaming up to be offline. This led us to apply extraordinarily high incentives this past week, which worked better than expected: 300-400 supply hours more than forecast.”
He claimed that the cost had “a burn rate of 38%”.
The foundation of Uber’s business model is the use of dynamic pricing to influence employees’ decisions on when, where, and how long they work, as well as how many drivers are in any given area. When it first began, it insisted that all of its drivers be independent contractors, offloading the expenses and risk of running a transportation business onto them. Instead of calling itself a service provider, it referred to itself as a tech business. However, the UK Supreme Court determined that in reality, it had extensive control over the drivers, who were also its employees.
Some drivers today feel trapped rather than just in control as a result of rising fuel costs and pricing that does not reflect those increases. Many people borrowed money to buy cars that were customized to Uber’s needs on the promise of large gains, only to discover when prices fell, they had to work extremely long hours to pay off their debts before they could start earning a living.
The victory in the supreme court by Hadi and other taxi drivers was a landmark win for workers in the gig economy. After that, some GMB driver members reached agreements, and Uber claims that it now has a more collaborative strategy involving collaboration with unions. In May 2021, Uber and the GMB union agreed to a collective agreement, and as a result, Uber now pays holiday pay, pension contributions, and the hourly minimum wage. It claims that last quarter’s commission in London was in line with the 23 percent global average.
“With demand up following the pandemic, UK Uber drivers are earning more than ever – in the first quarter of 2022, they earned on average £29.72 per hour, including holiday pay, when actively engaged on the app. The combination of higher earnings, new protections such as holiday pay and trade union recognition in the UK has led to more than 10,000 new drivers signing up with Uber in recent months.”
The amount of £29.72 is the total after Uber’s commission fee is subtracted, but before drivers’ expenses for car rental, insurance, and fuel. When determining whether a driver has earned less than the minimum wage per hour, Uber enables drivers to charge 45p per mile, the amount established by HMRC more than a decade ago.
Speaking about the concessions, GMB’s national officer for transportation, Mick Rix, said he now intended to negotiate higher charges for drivers to reflect actual fuel costs and more support from Uber for drivers who experience unjust ratings or harassment from customers.
He said, “It’s going well; we’ve had lots of dialogue with senior management.”
But for the ADCU, the fight is far from over because Uber won’t consider the time that drivers must wait when determining how much they must be paid.
The ADCU contends that for Uber to live up to its promise of being “everyone’s private driver,” it needs to have plenty of cars available as soon as a user opens the app. For drivers, waiting times frequently make up 35-45% of their time logged on. The two key demands of the June strikes were payment for waiting for time and access to their data.
Hadi only uses the Uber app, but according to the firm, many drivers in the UK can use other apps while they are linked up with Uber as well, so there is no reason to pay to wait time when they might be multi-apping.
The uprising has gone global. In a number of recent court decisions, drivers in Spain, Switzerland, the Netherlands, and France have gained rights as Uber employees. In South Africa, Ongansie was one of seven drivers who sued Uber for violating their rights as employees and assisted in organising demonstrations. They prevailed, but Uber overturned the decision on appeal due to a technicality: because they were employed by Uber HQ in the Netherlands, the company correctly argued that bringing their claim there would require them to travel more than 8,000 kilometers.
Where employees have acquired rights, Uber has pushed back. The firm contributed to a group of gig economy companies that paid $220 million to have a California court’s ruling that drivers were employees overturned.
Hadi currently spends six days a week working somewhere between 40 to 50 hours on the Uber app in London. Given the cost of fuel, he estimates that, after operational expenses are deducted, his hourly salary on Uber is around £8, which is considerably less than the £9.50 legal minimum wage in the UK. He claims that after fees and waiting time, he only receives roughly around $5–$6 per hour. When presented with these numbers, Uber remained silent.
“The honey is gone, now it’s vinegar,” Hadi said.
Despite all these drawbacks, when questioned why he still continues to work with Uber, Hadi said, “I love driving and meeting and talking to lots of people. And I can’t go elsewhere because they control so much of the London market, there’s not enough work left elsewhere.”