THR Blog   /   May 4, 2016

Neither Hero nor Villain

Julia Ticona

Uber and taxi. Núcleo Editorial via Flickr.

On April 21, the ride-sharing service Uber reached a settlement in two class action lawsuits over the classification of its drivers as independent contractors as opposed to employees. The bottom line: Uber’s drivers (whom they call “driver-partners”) will remain independent contractors and so will not receive the minimum wage, health benefits, or other traditional workplace protections.

However, the drivers in California and Massachusetts—the two states where the lawsuits were filed—will each receive a small pay-out ($100 million to 385,000 plaintiffs). Uber will now support drivers’ associations, groups that bring together otherwise atomized workers to discuss common issues. And Uber has also promised increased transparency surrounding the ways drivers are rated by passengers and the ways the company “deactivates” the accounts of drivers.

Is this a victory or a loss for the drivers? A lot depends on how you look at Uber, which has, over the past five years, come to symbolize both the promise and the peril that the future offers workers. The service combines the seemingly magic operations of complex algorithms, the widespread use of smartphones, the promise of flexibility for workers, and a brazen disregard for existing regulations. There’s something there for everyone to fear—or praise. Remember Jeb Bush’s use of the service while campaigning in San Francisco this past summer? For a brief moment, the company became a “lightning rod” issue in the 2016 election, and unlike many issues, the dividing lines between candidates weren’t very clear: Is Uber part of a wave of services that are undoing the social contract between employers and their workers? Or is the “1099-economy,” in which more workers become independent contractors, a boon to individual entrepreneurship?

For those who see Uber as a creator of economic opportunity, its business model has become a template for success in an “on-demand” marketplace. Tech entrepreneurs pitch their start-up ideas as “the Uber of X” as a shorthand to illustrate the ways they’ll make haircuts or grocery delivery easier. From the workers' perspective, these new services allow almost anyone with a smartphone the chance to make a few extra bucks, set one's own schedule, fill in the gaps in other forms of paid employment, or provide some wiggle room in one's monthly budget.

For those critical of Uber’s business model, the company's use of independent contractors disregards the social contract between employers and employees. While Uber emphasizes drivers' flexibility and autonomy, in reality, its technology paternalistically controls workers’ choices through forced “time-outs,” lower ratings, and blocking app use if drivers refuse too many requests for rides.

Perhaps Uber is both hero and villain of the new economy: It reflects the desires of workers for more flexibility and control while unraveling the institutions that used to protect them from abuse. It promises autonomy and choice while actually providing surveillance and decentralized managerial control.

Uber itself conducted a survey of its drivers last year, with results that suggest a different interpretation. Uber reports that 74 percent of their drivers use the app to steady otherwise unstable incomes, 71 percent of drivers live with dependents, and 85 percent list balancing work and life as a significant reason to work for the company. Uber uses these statistics to advertise the choice and freedom their application brings to its drivers. But Uber's rhetoric raises this question: Under what conditions are these entrepreneurial individuals choosing this kind of work?

These statistics suggest a population of workers who’ve already been shortchanged by the very workplace arrangements that Uber undermines. Inflexible hours and hollow or nonexistent family and paternal leave policies have left many workers looking for a different way of working. But flexible contract work provides unsteady income and must be supplemented through other flexible work. Uber may be contributing to the degradation of traditional workplace protections, but its success in these efforts relies on the failure of traditional models of work to accommodate today’s workers.

Does the Uber settlement change much? Drivers in two states are gaining some small concessions, but ultimately their work lives will change very little. Fresh litigation filed on May 1 in Florida and Illinois will give this debate a much broader scope, especially on the question of gratuities alleged to have been lost or stolen by Uber.

Uber’s success raises many questions about the sustainability and ethics of a business built on the dissatisfaction and vulnerability of its workforce. It also suggests that this future will likely frustrate any attempts to designate heroes and villains, forcing us to confront the ambiguities of workers’ experiences in the new economy.