| "We need more of you, so tell your friends!" That was Uber CEO Dara Khosrowshasi's message to a meeting with drivers in London, on his first trip outside the US since the pandemic. Khosrowshasi wasn't kidding - Uber has a major driver shortage in the UK, one that is now so severe that the company has deemed it necessary to squeeze consumers in an attempt to address it. Fare prices are rising by 10% in the UK, Khosrowshasi announced, which means that drivers' wages are going up by the same amount (Uber is still taking its 25% commission). And as an additional enticement, the Uber CEO is handing out a £500 bonus to drivers who refer their friends and family to work on the app. Why is Uber struggling to get drivers? First, the 'Great Resignation' has been particularly dramatic in ridehail - thousands of Uber drivers got out of the car during the lockdown and never got back in, with rising job vacancies (over a million in the UK) providing them with new options for less stressful and/or better paid work. Second, the sharply rising cost of fuel and of second hand car purchase is making driving your own car an expensive way of making a living. Third, Brexit has contributed to labour shortages across all low-paid, precarious sectors in the UK, with 200,000 EU citizens leaving the country. Uber's shrunken workforce has increased leverage and more incentives to reject rides which are not economical, with consumers increasingly complaining that rejections mean that Uber can no longer be relied on to take them where they need to go. Fewer drivers also means greater use of surge pricing at moments of peak demand, which consumers hate. Add into the mix the new 10% rise in prices, and many passengers may begin to look to the traditional taxi or public transport instead. Uber's plan for global domination was simple: wipe out the traditional taxi by using billions in venture capital to subsidise ultra-low pricing, and then when monopoly status was assured, raise the prices and watch the profits flow. The traditional taxi has successfully been decimated in many places, but Uber faces competition from Lyft and Bolt which operates with the same business model. With no monopoly position, and Uber under increasing pressure from investors to finally show that it can turn a profit (hence why Uber's commission has not changed), Khosrowshasi is caught between a rock and a hard place: he needs to pay drivers more to attract them into the car, but if fares rise too much he risks losing his customer base. Something has to give. Ben Wray, Gig Economy Project co-ordinator |
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BRAVE NEW EUROPE, the host of the Gig Economy Project, has launched a fundraiser to sustain the site. BRAVE NEW EUROPE'S mission is to provide political education which runs counter to neoliberal orthodoxy, and shows alternative paths forward. We don’t believe there is another website in Europe that is playing the same role, so if it was gone tomorrow it would be missed. But the website is currently running on less than a shoe-string, and the only way it will continue is if readers back the site financially. BRAVE NEW EUROPE is looking to raise 1,500 Euros a month to cover its costs. That’s 150 people giving 10 euros a month, or 300 giving 5 euros a month. It's not a lot. If you can help the site out, visit: https://braveneweurope.com/donate. |
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Gig Economy news round-up |
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- DOORDASH BUYS WOLT: US food delivery company DoorDash is moving into Europe by taking over Wolt, the Finnish food delivery firm. Wolt operates in 23 European countries and the buy-out is thought to be worth around €7 billion. The deal will officially go through in the first half of 2022, with soon-to-be former Wolt CEO and co-founder Miki Kuusi taking charge of international business for DoorDash, which had until now operated only in the US, Canada and Australia. DoorDash's shares rose 19 per cent on the news of the takeover. Wolt announced last week that it was appealing against a decision in Finland by a state administration body which found that the company's riders are employees. Read more here.
- BASQUE UBER STRIKE BEGINS: A week-long strike by Uber drivers in the Basque Country, northern Spain, over unpaid wages began on Wednesday [10 November]. Most of the drivers in the UGT union have been sacked by 'EuskalHerria VTC', without compensation or the payment of unpaid wages since August. EuskalHerria VTC's owner, Jose Antonio Parrondo, also owns private hire licenses in other regions of Spain and the union has said similar problems have been raised in those regions about Parrondo. The union is taking the company to court in a pending trial in the Basque region of Bizkaia. Click here to read more.
- GLOVO CANCELS 'IMAGE WASH': Spanish food delivery company Glovo was forced to cancel a business event on Tuesday [9 November] after unions and riders had found out about its plans and organised a protest. The company had invited guests from the political, civic and business world to an event at its headquarters in Barcelona to promote its new "couriers pledge". The secretary of New Realities of Work at the CCOO union, Carmen Juares, who organised the protest outside the HQ, said the company was attempting to "wash the image" by presenting itself as a firm of social responsibility, but that they cancelled the event because they did not want attendees to hear from its own workers protesting outside. Read more here.
- LONDON RIDERS STRIKE OVER PARKING FINES 'HARASSMENT': Riders in the IWGB union in the Hackney area of East London went on strike on Wednesday [10 November] to demand free and safe parking. The riders protested in front of Hackney Town Hall to complain about fines of up to £65 for parking at the McDonald's car park on Kingsland Road while collecting orders. The fines have pushed the riders out to a car park far away from the McDonald's, where they pick-up orders from, and with no shelter or toilets. They are demanding access to the McDonald's car park. Click here to read more.
- AI AT WORK NEEDS TO BE REGULATED, MPs REPORT FINDS: A report by an all-party group of MPs in the UK has called for an "accountability for algorithms act" to address the damaging affect of unregulated AI on workers. The report found that algorithmic surveillance and performance targets had intensified since the pandemic, was hurting workers' mental and physical health and must be controlled through regulation. The proposed Act would give workers' the right to participate in the design and use of algorithms, and that companies should have to fill out algorithmic impact assessments. Read more here.
- STUART DELIVERY SETS-UP 'TERMINATION APPEAL FORM': Stuart Delivery has become one of the first gig economy companies in the UK to set-up an appeals form for riders who feel they have been unfairly dismissed from the app. The IWGB union organised a protest earlier this year over unfair terminations of riders and drivers from the app. The new online form states: "We will ask you a series of questions, and request evidence in order to review your Partnership Termination. Please keep in mind that we will only review your termination if you can provide us objective proof to prove you were not at fault." Read more here.
Have we missed important news on the gig economy in Europe this week? E-mail Ben at [email protected] to help us improve our news round-up. |
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