Lower rates for riders result in lower pay for drivers
Drivers for Uber met at the Yarborough Library in North Austin Sunday afternoon, Aug. 9, to talk about the ways they're getting hosed. Their sentiments were simple: The pay's too low, their employment's unprotected, and they worry about whether they're covered by insurance.
Sunday's conversation sounded much like those currently being held among taxicab drivers throughout the city (see "Crash Course," Aug. 7). However, while cabbies blame their newly lowered income on a dwindling market, Uber drivers are assigning fault to their governing body: the San Franciscan transportation network company (TNC) that's spent the past year and two months recruiting drivers and riders around Austin. The company is slashing rates, drivers say – and not proportionally reducing its commission in the process – in an effort to increase ridership. That's working. According to Uber, the company provided more than 2.5 million rides to Austin residents in its first year of operation. But the service's increasing value comes at the expense of driver income.
Drivers say Uber has slashed their income by introducing two different rate reductions for its riders. The first one came Dec. 2014, in an effort to increase ridership during what Uber called "a historically slow part of the year." At the time, the company told drivers it was "so confident in the earnings gains drivers will see that [it's] making earnings guarantees." An Uber rep told the Chronicle the company offered to pay qualifying drivers the difference for any income lost. But drivers say those guarantees came with so many conditions that they proved difficult to access. Drivers also refute Uber's assertion that "partner earnings" rose 25% between Jan. and Feb. 2015. Rates dropped 23% during the winter and never bounced back up after the "slow part of the year" concluded.
Then the company announced another cut in late July – a 7% decrease. The resulting rate means that the value of a four-mile trip – after the $1.10 Safe Rider fee and Uber commission have been extracted from the final tally – has been reduced from $8.32 to $4.67, according to data compiled by one driver. That's a tough pill to swallow for independent contractors, a class of workers that in most industries gets to negotiate its working rate.
Making matters increasingly difficult is the belief among those assembled that the company cares little for their drivers' well-being or job security. The company's insurance woes are well-documented, and have yet to reach a clear solution. Drivers are protected by Uber's insurance policy if they're actively engaged in commercial activity (i.e., they've either accepted a trip, are in the process of providing the trip, or have yet to close out the transaction from the trip), but the company has passed coverage responsibilities to personal providers when drivers are in their cars and the app is on, but they're not actively doing business. Drivers say that personal providers won't cover their damages should they get into an accident during that gray area, defined civically as Stage 1. And while some providers offer hybrid packages for individuals who drive for a TNC, those assembled Sunday said that premiums are often too high to justify based on their income. As a result, they say, they're often driving uninsured.
Drivers also say they constantly worry about losing their jobs due to arbitrary grades given to them by riders. Riders are encouraged to assign a score to drivers after each trip – 1 through 5 – as a way of keeping drivers accountable. However, drivers believe that an important distinction is getting lost in translation on this detail. While many riders may believe that a 4 out of 5 – essentially 80% – is a good score, it will actually cause drivers to lose their jobs. An average rating below 4.7 can result in termination, and bad scores can come from anywhere. It doesn't have to be bad service, say drivers. It can come as a result of a rider being upset about surge pricing – which means drivers can be penalized for a rate hike they didn't create and can't control.
The drivers' concerns are coming at a time in which City Council is beginning to reconsider the way the city works with TNCs moving forward. Council passed a temporary ordinance last September allowing TNCs to open operations, but the agreement was for one year, and new guidelines must be set this year. The Mobility Committee met for the first time since June on Wednesday, Aug. 5, and heard recommendations from the city Transportation Department on how it foresees TNCs working with the city. Staff recommended more stringent standards for Stage 1 insurance coverage, increased efforts to cater to Austin's disabled community, and displayed markings that will allow others to know which cars are driving for Lyft and Uber. The city said that it will also expect to see TNCs provide more reporting data moving forward, as is expected of the city's taxicab franchises.
The drivers assembled Sunday conceded that they don't care as much about the city's recommendations or expectations; they just want to get paid a sustainable wage. As the company tries to reach new riders and grow its market share, that's becoming increasingly difficult to achieve.