From the article in Jacobin: Uber makes that money [businessinsider/uber-revenue-2014-6] by relying on a network of thousands of drivers who are not technically employees of the company, but rather independent contractors — the company calls them “driver-partners” — who receive a percentage of its fares. From the very beginning, Uber attracted drivers with a bait-and-switch. Take the company’s launch in LA: In May 2013, Uber charged customers a fare of $2.75 per mile (with an additional 60¢ per minute under eleven mph). Drivers got to keep 80 percent of the fare. Working full time, drivers could make a living wage: between 15 and $20 an hour. Drivers rushed to sign up, and thousands leased and bought cars just to work for Uber — especially immigrants and low-income people desperate for a well-paying job in a terrible economy. But over the last year, the company has faced stiff competition from its arch-rival, Lyft. To raise demand and push Lyft out of the LA market, Uber has cut UberX fares nearly in half: to $1.10 per mile, plus 21¢ a minute. Uber drivers have no say in the pricing, yet they must carry their own insurance and foot the bill for gas and repairs — a cost of 56¢ per mile, according to IRS estimates. With Uber’s new pricing model, drivers are forced to work under razor-thin margins. Arman, for instance, made about $20 an hour just a year ago. And now? Some days he doesn’t even break minimum wage. His experience is quite common among LA Uber drivers I spoke to. For many, driving for Uber has become a nightmare. Arman often works up to seventeen hours a day to bring home what he used to make in an eight-hour shift.
Posted on: Wed, 19 Nov 2014 20:47:37 +0000
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