Why Uber Refuses to Hire Drivers As Full Time Employees Research Paper

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Problem at Uber

Introduction

Uber has 22,000 employees worldwide and approximately half of its employees work inside the US. The company has nearly 1 million drivers in the US and approximately 4 million worldwide (Sainato, 2019). The problem that Uber has is that it does not consider its drivers as actual employees even though this categorization has been challenged at the federal level. Regulators have argued in the past that the company should count its drivers as employees rather than as freelancers or contractors. Drivers too have argued that they deserve the benefits, protections and compensation that regular employees receive (Rapier, 2019). However, the National Labor Relations Board's general counsel recently revealed that Uber’s drivers will continue to be classified as contractors. Though the company has viewed this as a victory for its business model, there are plenty of problems that remain as a result of this continuation of what many drivers view as an inappropriate classification. This paper will address the issue at the heart of this problem and describe why it is one that needs to be solved. It will discuss the qualitative design used to collect data using the interview method and will present the findings from three interviews with local area Uber drivers. Finally it will conclude with a reflection from a Christian perspective on how Uber should address its driver employment status issue.

The Main Problem

The main problem that Uber has is that its drivers who commit themselves full-time to driving for Uber feel unable to earn a just wage because the company has been allowed to classify them as contractors instead of as employees. It is akin to a company like Nike outsourcing all its production work to wage slaves in Asia. Uber has found a legal loophole that allows it to classify its drivers as contractors, meaning it does not have to provide any of the benefits, support or oversight that comes with having drivers the company employs. Those who drive for the company only part-time have no problem with the arrangement: it is the ones who rely upon the work full-time who feel exploited and rightly so. Uber has displaced the traditional taxi cab business model and undermined the taxi driver’s occupation with its app business that contracts out driving services to independent drivers.

There are indirect issues with Uber’s business, too, including the problem of sexual assaults that have occurred among Uber drivers. Between 2018 and 2019 there 6000 sexual assault claims involving Uber drivers or passengers (Bond, 2019). Because of the lack of oversight that Uber has and the lack of discretion it conducts in outsourcing driving services to anyone with a car, the company puts both drivers and passengers at risk (Bhuiyan, 2018).

Primary Cause of the Problem

The primary cause of the main problem of Uber’s drivers’ employment status is the fact that to be competitive and to differentiate itself from traditional taxi cab companies, Uber had to exploit the share economy and get contractors to provide driving services to riders. People looking for an easy way to earn extra cash on the side were happy with the idea. They did not have to undergo an evaluation or hiring process. They did not have to sit for interviews. All they had to do was download the app, show that they had a driver’s license and a suitable car, and they qualified to drive for Uber. As the business caught on, it put pressure on traditional taxi cab companies and soon many of them were put out of business because there was no more demand for their services. Uber drivers were much faster to respond and the fares were cheaper. Riders loved it because they felt like they had their own personal chauffer. No matter where they were or what time of day it was, they could rely on an Uber driver to show up within minutes and take them where they needed to go.

As people who worked for taxi cab companies now found, they had to sign up to work for Uber if they wanted to continue in the same line of work. The only problem was that they would no longer be employed under Uber’s terms. Uber was not “hiring” them but rather contracting out services to them. Thus, Uber was not responsible to them for health care benefits, dental insurance, sick pay, vacation time, retirement plan, pension, or any of the perks that come along with other places of business that actually hire employees as employees. In short, Uber was taking advantage of the share economy to undercut an established industry and to force employees of that industry to come work for Uber under the conditions and terms that Uber insisted upon. There would be no unions to help drivers organize; there would be no union protection; there would be no way for Uber drivers to fight for better pay. Yet if one wanted to drive, one had no choice but to work for Uber (or its competitor Lyft, which basically acted under the same terms).

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The arrangement not only meant that those who drove full-time for Uber would be making less, they would also have no job security, and no safety in terms of their physical health if they should be attacked while on the job (North, 2019). Or, as the pandemic of recent months has shown, if the economy were to suddenly close down, there would be no riders. Uber drivers would be left without support.

Methods of Addressing the Problem

Malos, Lester and Virick (2018) argued that because Uber drivers are not technically “employees” of Uber the company has no sense of accountability or of any plan for corporate social responsibility. Though the gig economy could be partly to blame for Uber’s driver employment status issue, the company has certainly exploited its contractors and undermined the traditional driver for hire industry with its app. The fact that federal…

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…issue of driver employment status.

Reflection from a Christian Perspective

Christian leadership focuses on servant leadership. It puts the needs of others first—i.e., it puts stakeholder interests ahead of its own. Another way to put it is that the company that has Christian leadership puts people before profits. Putting people before profits has been found to be a successful approach to leadership, as leaders like Herb Kelleher of Southwest Airlines have shown (Reingold, 2013). Kelleher made his company into a success by making sure his employees were satisfied and happy. He believed that by motivating workers to be their best it was imperative that they have all their needs met. This is basically the same idea as Maslow’s hierarchy of needs model, which implies that people should have lower level needs met before they can achieve self-actualization.

From the Christian perspective, it is easy to see where the message of Christ would fall on this issue. Christ said, “Love your neighbor as yourself. There is no commandment greater than these” (Mark 12:30-31). What He meant was that people need to look out for others rather than try to take advantage of them.

The problem at Uber is that the company’s leaders are looking to take advantage of the poor economy and the plight of low-skilled workers with low-income and few options. These leaders recognize that the gig economy has become accepted in mainstream America and they are willing to exploit immigrants and minorities for their ride sharing service. It is not a very Christian approach to business or to leadership. The company should consider offering full-time employment to those drivers who would like to become full-time drivers for the company. This would allow the company to offer stability, benefits and a better service all the way around. The company could alter its app so that drivers can pick between full-time employees and pay a higher rate to support their pay or contract drivers for a lower rate. That is one option, but the company could literally brainstorm a thousand other options that might work even better. The key is that the company’s leaders should approach this issue from a servant leadership position and act as Christ would act towards those in need: attentive, with full heart and head oriented towards satisfying others.

Conclusion

Uber is in a good position as far as the ride share industry is concerned. However, the company’s lack of corporate social responsibility is not very positive and shows a troubling orientation towards the needs of its drivers. By refusing to hire full-time drivers as employees, the company has basically announced that it is willing to exploit low-skilled workers and make them dependent on the contractor for hire business model that Uber uses. Since Uber has undermined the traditional taxi cab business it has no real competition as a threat, so it can get away with this model. Yet from a Christian perspective Uber’s leaders are not demonstrating servant leadership and should….....

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