‘Uber saw how many in SA desperate for jobs and raised company’s cut’

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‘Uber saw how many in SA desperate for jobs and raised company’s cut’

Image copyright: arkadijschell/123rf.com

| Bruce Whitfield interviews Douglas MacMillan (Washington Post) and Dr Mathetha Mokonyama (CSIR) about the Uber exposé in the media

  • The Money Show
  • Bruce Whitfield
  • Uber
  • CSIR
  • Uber drivers
  • Uber SA
  • The Washington Post
  • Uber Files
  • Douglas MacMillan
  • Dr Mathetha Mokonyama

Ride-hailing platform Uber is making international headlines again thanks to a joint media investigation into thousands of leaked documents that show how the company viewed its drivers.

The records cover the years 2013-2017 and include emails, text messages and presentations.

They show Uber officials, led by then-chief executive Travis Kalanick “carrying out a business plan that proved to gradually undermine their own drivers” writes The Washington Post.

Top executives advised local managers around the world to spend millions of dollars on lucrative incentives for new drivers and then steadily raise Uber’s commission, depriving those drivers of income… the documents show.

The Washington Post

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The so-called Uber Files investigation also exposes the dodgy tactics the company used to disrupt transportation and increase its market penetration around the world.

.. it found that company officials leveraged the sometimes violent backlash from the taxi industry against drivers to garner support and evaded regulatory authorities.

AFP

Bruce Whitfield interviews Douglas MacMillan, corporate accountability reporter at The Washington Post and co-writer of the article “A look at how Uber put SA driver’s lives at risk for a bigger profit margin”.

MacMillan notes it’s well-known that Uber used “hardball tactics” to grow around the world.

What the documents show, he says, is that the company went further than what was publicly known.

… and they often flouted local laws and customs in order to get into markets where their business model was not necessarily legal.

Douglas MacMillan, Corporate accountability reporter – The Washington Post

What’s striking when you look through some of these emails and messages between the CEO at the time… and other top executives… is this wilful disregard for, in some cases local laws, government officials and also for the wellbeing of their own drivers…

Douglas MacMillan, Corporate accountability reporter – The Washington Post

MacMIllan came to Cape Town to interview drivers for the Washington Post story.

In a nutshell, it appears to come down to Uber taking advantage of the high number of desperate people looking for employment while making promises of “creating a better life” for them.

Uber saw that and said ‘these drivers aren’t going anywhere, so we’re in a good position to raise the commission… so Uber went from 20% commission to a 25% cut of every ride… some of the local managers pushed back, saying some of these people are already struggling and this is going to hurt their economics even more.

Douglas MacMillan, Corporate accountability reporter – The Washington Post

The managers warned that the move could result in protests and drivers potentially forming unions.

“Uber went ahead and raised the commission to 25% for new drivers and sure enough, there were a lot of protests and increasing animosity between drivers and Uber, which I think continues to this day.”

RELATED: Uber SA: Some drivers don’t accept short trips – we know, and we’re fixing it

MacMillan says Uber is also trying to ensure that when a customer opens their app they’ll see a wait period of only a few minutes, for which they need a lot of drivers on the road.

One driver said that over time when Uber flooded the market with thousands of cars… his daily trips were cut in half… What happens then is drivers end up taking more risks and working longer hours… and some end up driving the more dangerous parts of the city…

Douglas MacMillan, Corporate accountability reporter – Washington Post

Whitfield also got comment from Dr Mathetha Mokonyama, who leads the transport systems and operations area at the Council for Scientific and Industrial Research (CSIR)

He notes that Uber refers to its drivers as “partners” and in this area there is room for improvement.

Two years ago or so our Competition Commission… in fact came to the conclusion that e-hailing services like Uber should be liberalised… that the authorities should open up for fee entry as long as you can prove that you can operate safely…

Dr Mathetha Mokonyama, Lead: Transport Systems and Operations – CSIR

At the moment you have drivers that are really not partners… I think there is enough data to structure the business so that it’s a win-win.

Dr Mathetha Mokonyama, Lead: Transport Systems and Operations – CSIR

MacMillan adds that there is an Uber driver “uprising” all around the world.

“A lot of drivers are arguing in court… that classifying them as ‘independent contractors’ is just a tactic Uber has used to get off the hook from paying them benefits and giving them basic worker rights.”

For more detail, listen to the full conversation on The Money Show (skip to 1:15):

This article first appeared on CapeTalk : ‘Uber saw how many in SA desperate for jobs and raised company’s cut’

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