In a turbulent year for economies worldwide, Uber had a mixed bag. The mobility business saw a significant drop in demand. But revenues of its delivery business, Uber Eats, doubled. In a podcast with Kara Swisher, Uber CEO Dara Khosrowshahi talked about California’s Proposition 22, the Autonomous Vehicle Business, and more. Here are some highlights and our thoughts.

On The Growth Of The Delivery Business And Post Pandemic expectations

The number of delivery bookings is likely to be larger than mobility in 2021. Ultimately, the two businesses are likely to have a 50-50 share in the company. The aim is to be the global leader in mobility and delivery. Uber has tracked delivery business performance in markets where mobility is making a comeback. Post pandemic, there is a small drop-off in new customers returning to the platform. But, as more and more restaurants sign up, the growth is likely to continue.

Our Take

Expect more gigs in the delivery business till the pandemic blows over. But, as movement resumes, those who have missed dining out are likely to give home delivery a try.

On Whether Uber Is Part Of The Menace Economy

With a high demand for home delivery, the assumption that drivers aren’t paid enough is incorrect. Drivers and couriers earn more than baristas and those working in fast-food restaurants and warehouses. And they have more flexibility. Uber has started initiatives to help blue-collar workers transition to white-collar jobs. These include classes to move them to call centers and green light hubs. The top employees have options to take coding programs so they can code for Uber.

Our Take

Comparing what drivers earn with those who make minimum wage seems unfair. More so because the expenses drivers bear are not accounted for. The initiative to transition drivers to white-collar jobs sounds good. But, by his own admission, only a handful have made this journey. It also doesn’t address the concerns of a majority who don’t want to trade in their flexibility.

On Income Inequality

With the systemic shift to capital and IP, there is a strong push against labor. Investment goes into companies that automate work and reduce the need for human resources. Labor has no leverage, while capital and IP have a free run. This allows companies to increase shareholder wealth. Tech companies are aggressively hiring workers. But the job is for those who want to make extra money on the side without compromising on other commitments. Drivers and couriers need to set fair expectations when it comes to wages. They need to realize that they will make $15-$20 an hour and not $50.

Our Take

Blaming the system doesn’t help. These companies build wealth on the backs of workers. It’s not too much for them to expect a fair share of the profits. Lowering worker expectations is an easy way to get them to accept less. This means full-time workers can not hope to survive on the money they make from Uber.

On Unionization of Workers

Since drivers and couriers are not full-time employees, they can’t unionize. Representation of drivers and couriers who use their service is an issue. Uber is promoting the idea of sectoral bargaining. This allows a group of service users to bargain with the industry as a whole instead of a company. Uber talked to union leaders about flexibility, benefits, and representation. But they didn’t go anywhere. The result was California’s Proposition 22.

Our Take

Talks failed because unions wanted rights that sectoral bargaining wouldn’t provide. Not classifying drivers as employees makes them vulnerable to exploitation.

On Uber Drivers & California’s Proposition 22

The proposal introduced made sense to everybody. Drivers classified as employees will lose their flexibility. Retaining flexibility while adding benefits such as minimum wage makes more sense. The bill passed because voters and a majority of drivers agreed with Uber’s point of view. Uber is in discussions with lawmakers in other states to roll out similar benefits.

Our Take

The benefits are better than none. But Prop 22 came about because companies like Uber didn’t want to categorize drivers and couriers as employees. They spent over $200 million on advertising to get the law passed. Passing some of that down to workers would be nice. To a layman, it would seem that they have money. They are just unwilling to share it with those at the very bottom.

On Vulnerability Of Gig Workers During The Pandemic

Felt no guilt about drivers and couriers without health coverage during the pandemic. The platform provides earners who need money to make it with flexibility. Prop 22 is a step in the right direction to protect workers. Uber is pushing to introduce it all over the US.

Our Take

Those who work during the pandemic aren’t just vulnerable; they’re desperate. Prop 22 is a recent piece of legislation. And, apart from California, the situation in the rest of the country hasn’t unchanged. 

But, we cannot blame Uber for healthcare being inaccessible to many in the gig economy. And we can’t expect them to become a healthcare coverage provider. It’s not their core business.

On Uber And Autonomous Vehicles

Uber sold its Autonomous Vehicle Division to Aurora Innovation to focus on its networking business. But this doesn’t mean it’s giving up on the tech. When it’s approved, Uber wants autonomous drivers on its network alongside human drivers. With the deal, they have access to the technology without having to build it. So it’s a win-win.

Our Take

Uber’s deal protects the company’s present and future. But it does little for gig workers who have been instrumental in the platform’s success. When autonomous technology becomes available, it will provide more leverage against drivers. They will have two options. Work for less than what they already make or get pushed aside. It fits in with the theory of a labor-averse system.

Summary

Companies like Uber don’t seem to have much interest in worker welfare. Initiatives like Proposition 22 came about because of and against government regulation. There was a recurring theme throughout the podcast. The assertion that drivers and couriers are platform or service users and not workers. This advocate for an independent contractor model. But, contractors charge their rates, get clients and increase their business. Uber offers drivers none of this.