Long before Uber's multi-billion-dollar IPO, the ride-hailing app has been shaking the economic and legal foundations of the dozens of countries around the world where it's landed. Not only has it disrupted the transportation sector, but the San Francisco-based digital taxi service has introduced a whole new way for companies to deliver their services and people to seek work — in fact, we call it: uberization.
Present in 65 countries and more than 600 cities, the platform has facilitated more than five billion trips worldwide. Though the impact is indeed global, the arrival of Uber has followed a unique route in each country. By taking a ride through the company in Egypt, Argentina, the UK, the U.S., and France, we examine the effects of the gig economy that will ultimately count much more than the tens of billions that Uber is worth today.
Egypt is Uber's largest market in the Middle East and it's about to get bigger: The company recently announced plans to buy Careem, a regional rival. But Uber is already struggling to keep its 157,000 Egyptian drivers happy. This past March, a four-day strike was organized by drivers fighting for fair pay. According to the Egyptian media Mada Masr, Uber upped commission fees from 20% to 22.5%. Drivers also have to pay VAT which, in most other freelance professions, is usually billed to the client. In addition, the Egyptian government passed a law in 2018 requiring both Uber and drivers to obtain licenses — for a fee. It's also important to note that many Egyptian drivers don't own their own cars, and thus pay loans to car owners.
Beyond money troubles, drivers in Egypt have suffered robberies at the hands of their clients, and many want Uber to help ensure their safety by having clients register their national ID number. The 2018 law on licensing did contain an amendment about the app's user data, but it had nothing to do with the security of drivers. An article from The Cairo Scene explains that ride-sharing apps are now obliged to share their customers' data with the Egyptian security forces, and can be fined up to 5 million Egyptian pounds ($290,000) if they don't. All these recent developments have made both Uber users and drivers uneasy, but tuk-tuk operators are off scot-free as they fall under the jurisdiction of their local municipality.
Why is Argentina Uber's fastest growing market in the world even though it only operates in Buenos Aires? The answer is a little sinister. The country's growing economic tensions have boosted unemployment and slashed purchasing power: 20% of drivers were unemployed before signing up, clearly in need of quick cash. The strange thing is, Uber isn't currently making a profit in Argentina. The country's peculiar regulations around ride-sharing mean that Uber trips can only be paid in cash or foreign credit cards, making it hard for the company to impose its commission on drivers. This has caused a surge in sign-ups as, according to Uber, up to 400 new drivers enlist each day.
Uber and Lyft drivers strike in California — Photo: Scott Varley/SCNG/ZUMA
The gig economy in Argentina is booming beyond Uber, and a new union was created at the end of 2018 for delivery workers who earn their keep through apps like Rappi and Glovo (for food delivery). In the city Córdoba, a union for messengers and deliverers have even created their own platform that helps companies with logistics. As Irene Caselli wrote for the Argentine newsletter The Essential, "The twist is that the new delivery app will be made up by unionized workers, giving delivery people more benefits, such as a higher salary, health, and life insurance, annual leave and bonuses."
Powerful unions and long strikes are renowned traits of the French, yet their labor-law nemesis is quickly becoming an institution on their very own soil. Uber is so encrusted in the Gallic country that its secondary business, Uber Eats, has expanded to cities as small as Saint Malo, and the company rolled out a dockless electric bike and scooter share program in the Paris area this year. It looks like the gig economy is here to stay, as noted by Le Monde in a recent piece on the game-changing popularity of finding work through these platforms with French students.
But make no mistake, Uber is still experiencing setbacks. The company is trying to appeal a recent decision by a French court which ruled that a former driver was treated as more than just a freelancer and that his situation resembled that of an employee. Libération reports that a recent EU directive aimed at helping these drivers and deliverers allows them to deny work outside of their predetermined hours, and states that any training period must be paid as work time. The very companies this directive is aimed at, however, feel the EU's announcement is completely unrelated to them.
Nine out of ten drivers were immigrants, and 54% had the burden of bringing in over half of their family's income
A spokesperson from the food delivery service Deliveroo invoked the famous gig-economy claim: their deliverers were merely freelancers garnering work via their app. The European Parliament, however, begs to differ. As one representative firmly told the French paper, "A new definition of freelance workers was adopted in this legislation. It's not up to Uber or Deliveroo to decide who is a freelancer and who isn't."
Two years ago, British judges made the landmark ruling that Uber drivers were not, in fact, self-employed and therefore entitled to the minimum wage. This past December, the courts refused Uber's appeal, finding contradictions in the agreement between the company and its drivers. The Guardian quoted a relatively scathing excerpt from the judgment: "For Uber to be stating to its statutory regulator that it is operating a private hire vehicle service in London and is a fit and proper person to do so, while at the same time arguing in this litigation that it is merely an affiliate of a Dutch-registered company which licenses tens of thousands of proprietors of small businesses to use its software, contributes to the air of contrivance and artificiality which pervades Uber's case."
In March, four drivers filed another lawsuit against the corporation for breaching the EU's General Data Protection Regulation. The law stipulates that all individuals have the right to access any of their personal data a company might be harboring. Uber allegedly never provided the data these drivers asked for, such as GPS data, time logged into the app, and trip ratings. These elements are crucial for drivers to be able to calculate their pay. With such an indispensable case hinging on EU regulations, one wonders what the future of British Uber will look like post-Brexit.
In Uber's home and native land, a 2018 study showed that two thirds of drivers working for ride-sharing apps in New York City did so full-time, and 80% had bought cars for the express purpose of working through these platforms. According to the New York Times, "Many were in debt from those acquisitions and making very little money." Moreover, nine out of ten of these drivers were immigrants, and 54% had the burden of bringing in over half of their family's income. Soon after the study was published, the city implemented a new law capping the number of ride-share cars allowed to operate in the metropolis, and imposed minimum rates per-mile and per-minute. Across the country, San Francisco is considering putting a surcharge on ride-sharing. As New York Magazine recently argued, these municipalities have the power to do so much more, and could easily stand up for their exploited constituents by twisting Uber's arm with regulations. Although Uber began its reign in the U.S., it seems Lady Liberty has fallen behind her international counterparts when it comes to fencing this corporation in.