Anna Polumbo-Levy: It's Uber complicated

Wednesday, August 12, 2015 - 5:28pm

Ever since its creation in 2009, the for-hire ride service, Uber, has faced countless criticisms. Some regarding the conduct of their drivers — in Dubai, women claim one Uber driver sexually assaulted them — some about the way in which Uber treats its drivers — who they consider independent contractors, not employees, and thus are ineligible to receive benefits. Some criticism has come from the community of taxicab drivers. But banning ride services, such as Uber, is not necessarily the best answer.

These for-hire ride services were made possible by technological advances, as all rides are requested through an app designed for smartphones. Technology will only keep advancing, and contemporary issues raised by new businesses, such as these, will only become more prevalent. Rather than trying to stop them, we need to create a space for these new types of businesses in our society by working them into our laws and regulations because they are not going away anytime soon.

Despite the problems Uber faces, their business model poses innovative solutions to old problems that taxicabs could benefit from. Before for-hire car services such as Uber came along, I rarely used taxicabs. They frequently took over 30 minutes to arrive and were very expensive.

However, Uber makes it easy for the passenger in a few key ways. Typically, I can get an Uber in less than 10 minutes, making it infinitely more reliable than a cab. I can see where the driver is, what the car looks like, the driver’s name, what they look like and how other riders have rated them in the past. I can track where they are, so I don’t have to stand outside and wait, and there’s always a contact number in case I need to communicate with them. What’s more, Uber holds payment information in an account each rider sets up, so riders don’t need payment in hand.

Finally, Uber can be much cheaper than a taxicab. A ride from the Detroit Metropolitan Airport to East Quad in an Amazing Blue taxi is $55, compared to an Uber ride, which can be as low as $28 — depending on the size of the vehicle and time of day. Uber is also good at responding to rider complaints. Once, I was charged for a ride I didn’t take. I contacted the company, and they refunded my money without any further questioning.

Not only is it easy to get a ride with Uber, but there are also a few safety measures it has implemented. Although there have been serious issues with drivers themselves, which cannot be undermined, Uber has used its app to try and make rides safer. Unlike cabs, Uber riders get an invoice for the ride sent to their e-mail, including a map of their route and who the driver was. Should a passenger have any problems, they have all the information they need. Also, before even getting in the car, passengers (and drivers) can see each other’s overall ratings, which places responsibility for actions on the drivers and riders. According to its website, Uber drivers must undergo extensive background checks before being allowed to drive. If a driver or rider is frequently getting negative feedback from others, they will no longer be allowed to use Uber. Although safety is still a paramount issue, this is a very good start.

It’s clear that Uber has a model that is widely appealing. However, there are certainly important problems with the company. One of the largest issues surrounding Uber, at the moment, is the treatment of their drivers. According to the company’s website, drivers make their own schedules, use their own cars and don’t report to a boss. Thus, drivers are independent contractors. By labeling them as independent contractors, and not as employees, Uber doesn’t have to give drivers benefits that labor laws guarantee to employees. One Uber driver had to go to court to receive compensation for business expenses. In that case, the California Labor Commissioner’s Office ruled that that particular Uber driver was an employee, and thus Uber had to compensate them. Yet, because there’s no uniform classification for Uber drivers right now, it’s decided on a case-by-case basis whether an Uber driver is an employee or independent contractor. In each case, the courts will have to decide “whether a worker is economically dependent on the employer or in business for him or herself.” To fairly compensate drivers, there must be a new category that blends the laws and regulations that enforce the treatment of traditional employees and independent contractors.

Another concern that many have raised with Uber is the ways in which it’s affecting taxi services. The taxi medallion system, created in 1937 to cap the number of taxicabs that could circulate in New York City, reduced problems that resulted from too many cabs and not enough passengers. Today, there’s no cap on Uber and other similar for-hire ride services, and it’s hurting cab drivers that would rather drive a taxi because they are unionized employees. Some also argue that uncapped, Uber and other for-hire ride services congest traffic, increasing environmental problems and slowing economic growth.

The issue of Uber is widely complex. Uber has a number of great elements that make it appealing to riders and, to an extent, drivers that we would do well to incorporate into our traditional transportation models. At the same time, Uber undoubtedly has problems to fix. Uber should be forced to comply with regulations providing drivers with what they deserve to further ensure the wellbeing of riders and drivers and better synchronize Uber with taxicab companies. These changes only will come when we demand new laws be put in place to incorporate Uber and other for-hire ride services, businesses that are neither chauffeur or taxi services and whose drivers do not fit the traditional mold of employees or independent contractors. We must embrace innovative businesses, but continue to hold them to important labor standards.

Anna Polumbo-Levy can be reached at annapl@umich.edu.