AOC, Biden, & Bernie Have Slammed Uber's Treatment Of Drivers
Since Uber and Lyft went public in 2019 they have been under constant public scrutiny for their business practices and their unsustainable and unfair business model. There are numerous democrat voices against the two companies because they been operating as a duopoly for a long time. Senator Bernie Sanders (I-Vt.) showed his endorsement a year ago after drivers started protesting almost every month after the 2019 IPO and through the 2020 pandemic.
“I stand with striking Uber and Lyft drivers today. The greed has got to end,” Sanders tweeted, noting that Uber paid its top five executives a total of $143 million in compensation, including $45 million to its CEO last year
Sanders accompanied the tweet with a video of Uber drivers describing issues with the company’s business practices. “Earnings have gone down so much that people can’t afford health care,” one driver says in the video. “There’s not enough money for basic things that people need. Most people are working 50, sometimes 60 hours a week, to be able to make the money that they were making three years ago, and that means that people are driving while they’re exhausted.”
The biggest organized driver protest was the worldwide strike two days before the IPO day demanding a livable hourly rate as well as clearer protocols on wages, tips, deactivations and fare breakdowns, along with union recognition.
Sanders has frequently targeted some of the world's largest companies, contrasting the compensation of C-suite executives and company profits with the companies’ rank-and-file workers. Along with Sanders, Alexandria Ocasio Cortez AOC has been an active voice for better labor practices and treatment of rideshare drivers. She urged her supporters to avoid taking Uber for the day of this worldwide strike and instead try to take a taxi, or transit or any other transport option available.
Democrat politicians side with drives and are of the opinion that ridesharing business model in the US at its roots is broken at both the companies because today even at such high commissions and additional fees, there is no clear path to profitability and they may need to use their pricing power and increase ride fares for a long time to become profitable.
Independent contractors are not able to unionize legally in the U.S which has lead them to make driver organizations and made AOC and Bernie a collective voice for workers that face such mistreatment. They believe that drivers are not able to make a minimum wages because they are not able to vote to decide their per-mile and per-minute rates from their own riders. This leads to many drivers actually making below minimum wage when they factor in all their costs of car maintenance expenses, gas payments, rent, and depreciation at the end of the month or year.
Uber is adamant to continue this business model to maintain its monopoly. They believe that their treatment of drivers could be better and require the government's help to setup a third classification of workers beyond W-2 employees and 1099 independent contractors. A third one which gives drivers the benefits of both and creates a new template for workers of their growing and futuristic service gig economy. The government has opposed this third classification from the beginning but have recently begun considering it again after their effort to pass the AB5 bill to forcefully make drivers into employees is taking too long to go into effect.
The AB5 bill proposes a "ABC Test" to determine whether a worker of a company is a contractor or employee and under the test the duopoly is having difficulties changing their treatment to pass the test. It can lead to declining profits quarter over quarter which will hurt their clear path to profitability that investors have been looking for, for a long time.
The AB5 bill had also got another big-name ally: then preidential candidate Pete Buttigieg
“Mayor Pete,” as he’s known, spoke outside Uber headquarters on Market Street in San Francisco in support of the drivers’ efforts to help pass Assembly Bill 5.
That bill would give independent contractors in industries across the state status as employees, potentially granting them benefits and wage protections. Uber, Lyft and other entities are pushing back against the bill, calling it too sweeping. The ride-hail companies have also said a large share of their workers prefer the flexibility granted by independent contractor status, allowing them to drive the hours they want.
Drivers honked their horns as Buttigieg spoke outside Uber headquarters at 1455 Market St. Tuesday, as protesters chanted “Drivers united will never be defeated,” and “Uber, Uber, Uber, you’re no good, treat your drivers like you should.”
“I’m here because where I come from, gig is another word for jobs,” he added. “That means you’re a worker and you ought to be protected as a worker.” Protesters’ demands include the implementation of health insurance for driver, a better share of driving fees and a $30/hour minimum-wage, drivers and protesters told the San Francisco Examiner.
“Uber tells you they are taking 25% of each ride but I can assure you they are taking more. We are losing,” said Latosha Houston, 51, who has driven for Lyft for the past two years. Houston said she could not afford medical treatment for her diabetes because of dwindling wages.
“I don’t like when corporate businesses take advantage of innocent people trying to feed their family,” said Matt Putrick, 44, an Uber and Lyft driver for two years who joined the caravan of cars along the way.
Democract Senator Elizabeth Warren has also spoken out against Uber executive salaries at a time when they are running at record losses and can't afford to pay their drives well. She has also turned to support the the AB5 bill because she believes the treatment of drivers and the restrictions imposed on them resembles treatment of employees of a company, not contractors.
In April 2020, undestanding the emergency of the COVID-19 pandemic and the need for economic help and safety for the drivers she wrote a series of letters to the CEOs of DoorDash, Instacart, Grubhub, and UberEats. Many workers at those companies are classified as independent contractors, making them ineligible for benefits like health insurance, paid sick leave, and other protections. Meanwhile, demand for their labor has skyrocketed as Americans have been asked to stay home, driving many to opt for delivery as a way to avoid exposure to the virus.
“The coronavirus pandemic has illustrated how much your company is completely reliant on these workers to provide essential services to the public," Warren wrote. “In this public health emergency, it is more important than ever to fairly compensate these workers and provide the health and safety protections they deserve. I urge you to rise to the imperative of this public health crisis by providing paid leave, fair compensation, and adequate health and safety protections for all your workers.”
Other democracts are currently viewing other technological giants through an anti-trust lens and are weary of the effect of automation in the future. Self-driving vehicles are imminent and Uber and Lyft are actively investing in this technology to automate all their cars and finally replace all their drivers. This will require a massive restructuring of millions of driver jobs and new education Arizona and California where the technology is most likely to first adopted. Andrew Yang has been the biggest voice on the democract party talking about the effects of imminent automation and has proposed a universal basic income plan for every U.S citizen. He supports making all drivers into employees because of Uber's mistreatment.
The biggest strategy that Uber is using to stand against the AB5 bill is proving that drivers are performing work outside the company's usual course of business. The company asserts that they are a technology company and only provides software for drivers to find riders nearby. This way they can expand into UberEats because it is just another software connecting drivers to restaurants and riders. They are expanding rapidly to offering more technological services such as transit information on the app to show that drivers are performing work outside of the development business at Uber Technologies.
They are swiftly building software for food delivery and grocery delivery so that anyone during the COVID-19 pandemic who wishes to deliver food and help the sick in the neighborhood or is looking for more sources of income can all use the Uber app. Under this vision they have also been actively acquiring new rideshare and food delivery startups aroundthe world which lead to anti-trust and more collusion with more demoracts.
Uber was not able to acquire Grubhub finally because another Dutch company was able to make a better deal first. At the time, it seemed to assuage the concerns of the democracts but Uber in a few months instead acquired Postmates, a competing startup, and that made UberEats another monopoly in the food delivery industry.
The 2.65 billion dollar acquisition lead to the company making one of the biggest losses that quarter but all of it became justified because the CEO called the acquisition part of their international and local growth strategy. It is important for the company to be a monopoly in both the ridesharing and food delivery markets.
Uber understands that to maintain a clear path to profitability they need to continue being a monopoly so that they can keep their ride prices low and driver supply extremely high in every city that they operate. That anti-competitive vision does not sit well with democrats especially during a climate when Google, Faceobook, and Amazon are under serious anti-trust scrutiny. This is why if you look closely at the list of democracts mentioned in this article you will quickly notice that they make up all the key members of the 2020 Democratic Party presidential debate.
So this begs the question of what does the Republican party or the Trump administration think of Uber? President Trump has not publicly said anything about Uber since the time Travis Kalanick was forced to leave his business advisory council in 2017. Though, Trump's communication director, Tim Murtaugh, says the administration is completely against the AB5 bill and the stance taken by Biden and Harris.
"If you needed any more proof that Joe Biden’s and Kamala Harris’s far-left agenda hurts people, look no further than California, which is waging an all-out assault on workers who are just trying to earn money for themselves and their families. Lyft and Uber drivers’ livelihoods are being threatened thanks to Biden and Harris’s support for a law demanded by liberal special interests who want to take away workers’ opportunity to make their own schedules and participate in a free and open gig economy. This cruel and harmful policy pushed by Biden, Harris and the radical left is a preview of how their agenda will crush the working class across the country if they are elected” said Murtaugh.
Regardless of how who wins the election in November, the democrats will continue to push the AB5 bill and Uber will continue to fiercely lobby against it. There may need to be some resolution which lies in between and a third classification of workers might be required because the enforcement of this bill is taking too long and drivers quickly need a solution during this pandemic.
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