Scotland's Economy

Uber, get your act together or get off our streets

A few days ago rushing between meetings one of my colleagues ordered a cab.  When we got to Queen Street Station I offered to pay and was told there was no need, it was on his uber account.  I had inadvertently broken my two year personal boycott of Uber.  At first I was surprised that other people didn’t dislike the organisation as much as I did, and then I was angry at myself for not telling more people why I don’t use Uber.

 

I have talked a few times about the Uber economy and the dangers of growing dominance in self-employed, low-wage transportation services, but my dislike of Uber goes deeper than that.  On the train back from Edinburgh that day I opened my news app to read that Uber had lost it’s licence to operate in London (pending appeal) as Transport for London had decided they were not a “fit and proper company”. If I was surprised, it was that Transport for London were willing to act.

 

First of all let me say that every Uber driver I have met has been nice and professional and most of their cars clean and comfortable.  I am not having a go at the drivers – they are just trying to make a living.  The app is clever; seeing the approaching cab on a virtual map as it drives towards you fits right in with our mobile device addicted society, and getting an idea of the price upfront means you don’t get that ripped off feeling at the end of the ride. Maybe that’s why 500k Londoners have signed a petition for Uber to keep it’s licence.

 

However, there is a lot more to operating a cab firm than a clever app, and this is where Uber have fallen short. I tried Uber out and liked it a lot, until one short ride away from my home I booked three Ubers.  They all accepted and one-by-one after watching them approach on the app, they cancelled the booking. I called a local minicab and the driver turned out to be ex-Uber, and he explained that the drivers are self-employed and they can cancel the booking if they get a better offer. Now that’s not official practice, and Uber makes it clear that their drivers cant take bookings from other firms, but it left me questioning who Uber were and what their end goal is.

 

Uber is a huge venture capital funded (by Goldman Sachs amongst others) US corporation that refuses to directly employ its drivers. It makes huge losses, and so is using that low cost and big VC investment to undercut locally owned cab businesses in order to gain a market dominating position. That isn’t cool folks, it’s threatening, and the advantages for the consumers will be short term, for once they have crushed the local business they will raise prices to generate a return for their investors.

 

Earning low wages, drivers have to work extremely long hours to make a living, meaning they can be tired at the wheel.  Part of the gig economy, they will often have a second self-employed job or part-time work. Having attracted good drivers with the promise of lots of work, meaning the zero hourly rate wasn’t an issue, they then set out to create mass demand but hired over 50,000 drivers in the UK and so many drivers are now claiming there are less fares to go round.

 

Uber boast that it’s easy to drive for them, if you already have a licence you can be driving for Uber within two days, which makes me feel they can’t be vetting them properly.  London’s Black Cabs have a seven stage process involving written examinations and three face to face oral examinations to prove you know 320 routes, plus all the roads and landmarks. Glasgow’s Black Cab drivers (presumably in other Scottish cities too) are vetted through the Scottish Government’s Protecting Vulnerable Groups scheme.

Following the publication of this article we now can’t find the two day claim on the Uber website but we did screen grab several of their adverts.

Last month the Metropolitan Police accused Uber of failing to report sex attacks by drivers and in one case allowing a driver who sexually assaulted a passenger to rape another because he wasn’t suspended or reported to the police. A young female friend of mine had a terrible experience in a London Uber, being driven around for up to 90 minutes into areas of a city she didn’t know and unable to get out, she felt sure the driver was planning on raping her and eventually managed to force her way out of the car, to find herself lost and alone with no power in her phone in a strange part of London further from her destination than when she started.  She reported the incident to Uber but felt nothing was being done and despite my advice felt she didn’t file a police report until reading that the Met Police were accusing Uber of not reporting such complaints even though they were required to do so. Uber failing to report sex attacks by drivers, says Met police

 

Watching the news last week and seeing several women recount similar tales (and worse) filled me with revulsion and made me wonder how often female passengers felt threatened in that way.  That sort of thing can happen anywhere, I know, but when a big global corporation is accused of failing to vet its drivers properly and trying to sweep serious allegations of sexual assault under the carpet, that’s an organisational failure and not just a symptom of the society we live in.

 

Last year, a UK employment court ruled that the nature of the work offered by Uber was not self-employment and therefore all drivers should be paid the national living wage.  However, the big picture becomes clearer when you realise that Uber sees drivers as a short term inconvenience and their future business model is based on driverless cars.  They have teamed up with Mercedes-Benz to run a network of self-driving cars that can be booked through the Uber app.  Ford and BMW are planning the same and the first self-driving cabs are due to hit the streets in 2021.  Volkswagen is planning a fleet of self-driving electric minibuses to be booked through its own app. The key advantage to Uber of self-employed drivers isn’t not having to pay the minimum wage, it may well be that they don’t have to make redundancy payments in 5 years.

 

In the meantime, Uber, you are a not just a cool app provider.  You are a taxi firm with obligations to your drivers and passengers.  You must be safe and operate within the rules, understand that, or get off our streets.

 

About the author

Gordon MacIntyre-Kemp

Gordon MacIntyre-Kemp is the Founder and Chief Executive of Business for Scotland. Before becoming CEO of Business for Scotland he ran a small social media and sales & marketing consultancy.

With a degree in business, marketing and economics, Gordon has worked as an economic development planning professional, and in marketing roles specialising in pricing modelling and promotional evaluation for global companies (including P&G).

Gordon benefits (not suffers) from dyslexia, and is a proponent of the emerging New Economics School. Gordon contributes articles to Business for Scotland, The National and The Huffington Post.

3 Comments

  • This is the wave of the future. I am a tech worker in Silicon Valley and have been for about 20 years. It is almost impossible to get an FTE job anymore and most of these companies have up to 40 % contract employees and/or vendors. I feel terrible supporting this model because it is unfair to future workers who will have to accept an environment where they have no worker rights. What happens in the US always works its way through to the UK so beware. Hopefully soon I will have enough saved to return to Scotland.

  • as far as the future goes I think you will find that all taxi offices will go driverless with the owners offering cars to the offices and that way there will still be no need to charge VAT. I operate taxis and these are the same rules we all operate under.

    • Sure Bob but can you afford to do a deal with Merc to have a fleet of driverless cars in 2021 when the technology will still be expensive?

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