Uber published its Q1 2022 earnings report on Wednesday [4 May]. Revenue was $6.9 billion, a significant growth year-on-year and higher than analysts had predicted, but the company still recorded losses nearly as large, $5.9 billion. That long quest for profitability goes on. The company blamed the losses on its equity investments, rather than its operations, but shareholders were not impressed: the US ridehail giant ended Wednesday with a 4% fall in its share price.
The eagle-eyed James Farrar, General Secretary of the App Drivers and Couriers Union, has noticed that the company boasts in the earnings report of its "take rate" - the amount of many it takes per ride - almost doubling in the UK from 12.6% in 2021 to 23.5% in 2022. Uber state that this huge increase in commission is down to "business model changes", which Farrar finds come from "the new 'operating fee'" which is "supposed to be for driver benefits" after the company began employing its UK drivers last year. The report states that as well as driver benefits the fee goes towards "Uber's operating costs", and a breakdown of the price per ride shows that the operating fee does indeed substantially add to Uber's earnings.
"Uber boosted margins and left drivers scrambling to cope with 35% fuel inflation," Farrar points out. "The gig economy and Uber are as rotten as ever."
The big increase in Uber's take rate in the UK does raise serious questions about whether the employment of Uber drivers in the UK after the Supreme Court verdict last February has actually improved their lot. Remember, Uber has only complied with half of what the Supreme Court verdict ruled - they are supposed to pay drivers from log-in to log-out, which could double driver pay, but the firm has refused to entertain even the possibility of such a move. The company has faced no consequences for rejecting this part of the Supreme Court verdict, and indeed have have used their 'trade recognition deal' with the GMB union to pose as a model employer. The earnings report even implies that this deal was useful in securing another 30-month Transport for London license out of Labour mayor Sadiq Khan last month.
In an interview with Bloomberg this week, CEO Dara Khosrowshahi also suggests that its pledge to be a "zero-emission platform" by 2040 has helped it win influence in the British capital, a major market for the company. Asked whether the target had
"altered the dynamic in some cities where Uber has had a rocky history", Khosrowshahi replied: "It’s had a very positive impact. London is definitely one of them. When you share a common goal, a lot of other things fall into place. We very much support Mayor Sadiq Khan’s vision".
Is a nice sounding zero-emissions target all it takes to get into bed with Uber? The same article states that "a year ago, the share of battery-powered vehicles in U.S. ride-hailing was still lower than in the country’s overall passenger-car market". Whether it is the treatment of drivers or decarbonisation, it's best to judge corporations like Uber by their actions rather than their words.
Ben Wray, Gig Economy Project co-ordinator
Gig Economy news round-up
- BOARDROOM TURMOIL AT JUST EAT: The AGM of Just Eat Takeaway, Europe's biggest food delivery platform, was dominated by boardroom turmoil, with one executive, Jörg Gerbig, the chief operating officer, not put forward for re-election due to personal misconduct allegations. Just Eat said an investigation would take place into the claims. Ahead of its AGM on Wednesday [4 May], the board had faced sharp criticism from Just Eat's second biggest shareholder, Cat Rock Capital, who wrote an open letter calling for shareholders to vote against Brent Wissink, the chief finance officer, from being re-elected to the board and asking searching questions about why the share price had dropped 74% in 12 months. At the AGM, Cat Rock called for a quick sale of GrubHub, the US food delivery platform which Just Eat purchased last year. Wissink was re-elected, but the chair of the supervisory board, Adriaan Nühn, announced he wouldn't be seeking re-election, leaving the company looking for a replacement. Read more here.
- GLOVO MODIFIES ITS BILLING SYSTEM TO HIDE RIDER EMPLOYMENT RELATIONSHIP: In yet another twist in the long tale of Spanish food delivery platform Glovo and the Spanish Government's 'Riders Law', the company has changed its billing system in an attempt to avoid being in breach of the law. However, the change means its clients, like McDonald's and Carrefour, could instead be left legally responsible, according to an investigation by 'El Confidencial'. Glovo refused to employ 80% of its riders despite the introduction of the Riders Law last August, and the Labour Inspectorate has been gathering information ahead of what is anticipated to be a major sanction for breach of the law. Now, the company has sought to distance itself from an employment relationship by telling riders to invoice restaurants and supermarkets for a distribution fee, while Glovo will only invoice restaurants for an 'access fee'. However, the potential legal liability for the employment relationship that this infers for restaurants and supermarkets could lead these companies to abandon Glovo, according to the newspaper. Read more here.
- FIRST UNION ELECTIONS OF GLOVO RIDERS IN BARCELONA: The first ever election of union delegates in Glovo will take place next week in Barcelona. The Catalan capital was the site of a CCOO union strike last year among Glovo's 'dark store' grocery delivery riders, who are employed. The company refused to engage with the strike at first but later came to the negotiating table, refusing to sign a collective agreement but agreeing to an ongoing dialogue. Now, the workers, who are members of CCOO and the other big Spanish union, UGT, will elect 13 delegates to lead negotiations with the company. Read more here.
- VALENCIAN RIDER EXPLAINS VIRAL PICTURE: A picture went viral on social media this week of a rider in the Spanish city of Valencia cycling through a flooded street after torrential rain, and now the rider in question has explained the reality of having to work in such conditions. The Just Eat rider, who wishes to remain anonymous in fear of company retaliation, told 'Levante' that "orders triple on days when it rains heavily" but that if "you take a couple of minutes more, the next morning an email will arrive sanctioning you". Just Eat employs its riders either directly or through sub-contracting but the rider said that "here every month people are fired" because the company "only care about the metrics", a system which means that "accidents are common" as "many delivery people run to the limit". Alejandro Cantón, rider and spokesperson for the CNT union, said that he believed the company should provide special allowance for dangerous weather, such as extreme heat and torrential rain, or alternatively, food delivery should be "banned" in such circumstances. Read more here.
- UKRAINIAN REFUGEES DESERVE DECENT WORK TOO, UNION LEADER SAYS: Oliver Roethig, head of the European section of global union UNI, has argued that Ukrainian refugees fleeing war should not be used as an excuse to maintain "precarious and under-paid work" in the gig economy. Roethig cited the argument of Bulgarian MEP Radan Kanev, arch-supporter of the digital labour platforms, who said in March that Ukrainian refugees should become gig workers in the EU, and implied that the European Commission's platform work directive, which proposed a default presumption of employment in the platform economy, would be disastrous for refugees. Responding, Roethig said that this was "just part of the latest attempt by digital labour platforms to push back against the EU’s efforts to end bogus self-employment" and that "in response to the darkness of the violence unfolding in Ukraine...Only social justice and decent work can lay the foundations of lasting peace and shared prosperity". 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.