The ride sharing economy is unfair to drivers

There is a crucial difference between Marvin and most Uber drivers in the West.

By Ryan Lenora Brown

Published: Sun 28 Jan 2018, 7:00 PM

Last updated: Sun 28 Jan 2018, 9:46 PM

Marvin used to have a job. A real job. The kind that came with health insurance and paid days off and lunch breaks. He earned about $250 a week - a small fortune in South Africa, where more than 50 per cent of the population lives on less than $80 per person per month and two-thirds of young people are unemployed.
But when his contract with a Johannesburg logistics company ended last year, he couldn't find anything to replace it until a friend told him about the ride-sharing app Uber.
"It seemed like the easiest thing for me. You don't need a degree, you don't need a CV, you just sign up and go," he says.
Stop there, and Marvin is practically the application's poster-child, creating a job for himself in an economy that seemed determined to lock him out.
But there is a crucial difference between Marvin and most Uber drivers in the West. He doesn't own a car, or have any means to buy one.
Instead, like many of the app's drivers across the developing world, he pays to drive someone else's - and occasionally ends the week owing the car's owner money. (Marvin asked that his full name not be used, because the car's owner didn't authorise him to speak.) In a month, he says, he usually clears about $300. "With Uber, I live hand-to-mouth."
It's far from the be-your-own-boss image extolled by fans of the so-called sharing economy (or the related "gig economy"), in which anything from rides across town to handyman chores can be arranged peer-to-peer via big-data apps: cutting out middlemen, expenses, and much of a "traditional" job.
Critics have voiced doubts about the benefits of such an 'Uberised' world. But the company's rapid rise in parts of Africa, Latin America, and Asia has given rise to urgent questions about whether the phenomenon can flourish in highly unequal societies.
Marvin's set-up looks, in many ways, very similar to the cab companies of old - with drivers forking over a cut of their earnings to a wealthier middleman - exactly what Uber has always said it is not. ("Uber is not a taxi nor is it a taxi or transportation company. We are not Uber Cab or Uber Taxi," wrote Uber South Africa in an email to the Monitor.)
That arrangement might not be appealing to drivers in the United States of Europe, but in countries where formal employment levels are low, it has particularly strong "better-than-nothing" appeal.
"In reality, this isn't the sharing economy anymore," says Carlos, a Mexican transport economist and owner of three Uber cars, which he hires out to drivers in Mexico City. "I'm not sharing my good with someone else when I'm not using it. I'm participating in a taxi service associated with an app."
Middlemen allow Uber drivers across the developing world to bypass their single biggest hurdle to driving for the company - getting a car. In the US, more than 90 per cent of American households own a car, and many of them would like to turn a bit of profit from that investment. But in countries like Mexico, most people simply don't have the necessary income or access to credit for car ownership. "Often I wish my guys could own their own cars - for their sake," says Mike Dirkett, who owns and rents 18 Ubers in South Africa. He charges his drivers about $230 per week. Anything over that is theirs to keep, and he estimates that most of his drivers make between $100 and $200 a week. Meanwhile, "I'm making money in my sleep," he says.
That doesn't just happen behind Uber's back. Indeed, in many countries - including South Africa and Mexico - the company's app even includes a feature connecting would-be drivers to owners looking to rent out their vehicles.
But it also means profit margins can be excessively slim for drivers, who often earn only a fraction of each ride. Hector, a Mexico City Uber driver in an electric-green hatch-back, says he feels like the owner of the car he drives is taking advantage of him. He has to pay a set amount of about $130 to the owner once a week, which sometimes means driving 12-hour-or-more shifts each day in order to have any income left over for himself.
"The car is his, but sometimes I feel like he thinks that I belong to him, too," he says. "The idea of Uber initially was that you drive your own car. I have the sense that the model just doesn't work if you try to bring in third parties," says Austine Gasnier, who used to hire a driver in Mexico City to operate her second car as an Uber when it wasn't being used by her family. But after a few months, a robbery, and many headaches with the process, she dropped out.
"We realised that it wasn't profitable for him (the driver) or for us. Only Uber won."
-The Christian Science Monitor

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