Inside Story

In the belly of the beast

As Uber picks itself up after another legal blow — this time from the European Court of Justice — an ambivalent observer recalls a visit to the company’s Australian head office

Tim Dunlop 16 January 2018 2602 words

Short-term sharing: the high turnover of Uber drivers makes it difficult for them to demand better pay and conditions. lovro77/iStockphoto

On the day in late 2016 that I’d arranged to visit Uber’s Australian headquarters in Brisbane, I ordered an Uber car to take me there from my hotel a few kilometres away. The driver offered me the usual things — water, gum, lollies — and we chatted about why I was visiting. The only problem was the fact that Uber has a number of offices in Brisbane, and the driver took me to the wrong one.

He eventually figured it out and got me to where I was meant to be, but I couldn’t resist.

“Sorry I’m late,” I said to Uber’s Brisbane manager at the time, Sam Bool, when he met me in reception. “My Uber driver got lost.”

I had been on a panel a few months earlier with Bool, and he had suggested I call in at Uber the next time I was in town and have a look around. Though I was happy to accept the invitation, I wasn’t what you’d call a fan of Uber. But nor was I one of those who dreams of its destruction. Uber and other platforms of its kind have enormous potential, even if the company’s labour practices are far from ideal. As part of a more general transformation of work and industry, and with the right regulation and a much more ethical approach, their upside could be significant.

Indeed, Brisbane (and the rest of Queensland) already regulates Uber, and the state government’s legislation has been beneficial for everyone (though the taxi industry would argue that the new rules don’t go far enough). Among other things, drivers are obliged to pay an annual fee in order to operate; they must meet a zero drug and alcohol requirement when driving; their vehicles must have a government-granted certificate of inspection and display Uber-identification when the app is operating; and, as of 15 January 2018, they are required to have a Booked Hire Service Licence, which comes with its own set of rules.

When the regulations were introduced, Uber’s Queensland manager, Alex Golden, told the ABC that the company was “disappointed for Queenslanders who will miss out on the opportunity to make flexible money from ride-sharing… because they can’t afford the upfront costs imposed by government.” Interestingly, though, during the panel discussion where Bool and I met, Bool told us that the regulation had actually made his life as a manager easier. The fact that the government now imposed certain standards on Uber drivers meant that he no longer had to spend time enforcing similar rules and was freed up to do other things.

At this point, Uber’s year of hell hadn’t officially begun. This was before accusations of sexual harassment surfaced in the United States; before founder Travis Kalanick was forced from his post as CEO; and before the City of London refused to renew the company’s operating licence. It was also before Uber was sued by Google’s autonomous vehicle company, Waymo, for allegedly stealing trade secrets, and before Kalanick himself was sued for fraud by Benchmark, one of the earliest venture capital firms to invest in the company. I’d be surprised if these developments would have changed the essentials of what I saw in Brisbane, though perhaps they’d have changed the conversation we had.

Even before things got rocky for the company, you would hardly say it was a stranger to controversy. It was noted for — and even revelled in — its bad-boy image as a disruptor of the traditional taxi market. It openly flouted regulations and seemed almost to welcome slugging it out in court with the various governments it offended. It aggressively and shamelessly used its customer base to lobby politicians, as famously happened in New York when mayor Bill de Blasio announced he would seek to limit the number of hire cars operating in his city. It also openly opposed attempts by drivers to unionise, and indeed has spent billions on getting rid of drivers altogether through automation.

My visit began with a tour of the premises, which is linked to the separate offices of Uber Eats and the division that organises promotions with local businesses. In one section, staff liaised with drivers via telephone — hiring was done elsewhere — and it was here that I got my first glimpse of the kind of thing that many people hate about Uber. I was told that the staff on the phones worked from scripts, partly in order to make sure they never used a form of words that implied the driver was an employee. They never tell drivers to do anything; they suggest certain courses of action.

I was told the average amount of time a driver stays with Uber is four months, which struck me as an incredibly high turnover rate. It means a significant part of the business involves recruiting drivers. Indeed, a 2015 report released in the United States by Uber itself shows that, of 162,000 active drivers, 11 per cent quit within a month. Most were also part-time — 62 per cent had other jobs — and just 14 per cent of drivers were women (though the figure is even lower for taxi drivers: in the United States, 8 per cent are women; in Australia, the figure is 6 per cent).

The implication of all this is that businesses like Uber rely on the existence of a vast pool of unemployed or underemployed low-wage workers who are looking either for any sort of work at all or for some sort of income supplement. Some of them are certainly attracted by the flexibility the job provides — I have spoken to students who drive for Uber in preference to, say, working in a restaurant, because it’s much easier to fit Uber around their study schedule — but the reality is that a labour market that provided everyone with a decently paid, full-time job would be the death of companies like Uber in their current form.

The high turnover also makes it incredibly difficult for drivers to organise collectively, let alone unionise, and demand better pay and conditions. (Given its hostility to unionisation, Uber may well regard the turnover rate as a feature rather than a bug.)

Another controversial aspect of the “platform capitalism” that Uber represents is its use of rating systems that allow customers to score workers, workers to score customers, and the platforms themselves to use data to impose standards on drivers. Like many such businesses, Uber uses a star-rating system (one to five) and, as an article in the Verge points out, such rating systems have all sorts of implications for how we understand the worker–employer–customer relationship:

The on-demand economy has scrambled the roles of employer and employee in ways that courts and regulators are just beginning to parse. So far, the debate has focused on whether workers should be contractors or employees, a question sometimes distilled into an argument about who’s the boss: are workers their own bosses, as the companies often claim, or is the platform their boss, policing their work through algorithms and rules?

But there’s a third party that’s often glossed over: the customer. The rating systems used by these companies have turned customers into unwitting and sometimes unwittingly ruthless middle managers, more efficient than any boss a company could hope to hire. They’re always there, working for free, hypersensitive to the smallest error. All the algorithm has to do is tally up their judgements and deactivate accordingly.

I asked Bool if it was true that drivers are fired if their customer rating falls below a certain level (generally reported as 4.8 stars) and he told me that the star rating is just one tool Uber uses to keep a check on driver performance. Another is the “telematics” function associated with the app and the GPS tools within the drivers’ smartphones. By using those readings, Uber can tell whether a driver is holding the phone in his or her hand or has it mounted on a stand on the dashboard (as Uber recommends). It can also tell whether the driver has accelerated too quickly, swerved, or braked suddenly. Uber justifies this close monitoring of drivers as a way of improving overall safety, and it explains on their engineering website:

On Uber Engineering’s Driving Safety team, we write code to measure indicators of unsafe driving and help driver partners stay safe on the road. We measure our success by how much we can decrease car crashes, driving-related complaints, and trips during which we detect unsafe driving.

Uber uses “harsh braking and acceleration as indicators of unsafe driving behavior.” Harsh braking, says the company, “is highly correlated to unsafe behaviors like tailgating, aggressive driving, and losing focus on the road.”

Uber is not alone in using technology to monitor driver behaviour. “Black boxes” that use similar technology are common in the trucking industry. An executive at one of Australia’s biggest haulage companies told me recently that they “help our drivers understand how to be better drivers.” According to one manufacturer of such devices, “It provides instant in-cab feedback to drivers so they can adjust their behaviour accordingly, increasing safety and efficiency. It also uses on-board data to generate weekly driver skills reports, creating another opportunity to educate drivers and reinforce optimum driving habits in your company.”

For all the talk of improved safety and efficiency, though, such practices also highlight one of the least-talked-about factors shaping the future of work, namely the way the new technologies enable ongoing, real-time surveillance of employees and contractors — and, indeed, customers. We know, for instance, that Uber’s app used to track passengers for five minutes after their ride had finished, a practice that was only recently discontinued.

After the tour, I sat down with about fifteen staff members while they had their lunch. Uber provides a fresh meal for staff each day, and the common area — where we sat around a big square table — has a fridge full of drinks employees can help themselves to, along with microwaves and coffee-making facilities. After I was introduced, we went around the table and each person gave some background about his or her education and trajectory to Uber. I was invited to talk about my book, Why the Future Is Workless, and then we spent about an hour discussing matters arising.

I imagine everyone was on best behaviour, but all the same I was struck by what an impressive lot they were. Roughly equal numbers of men and women, nearly all in their twenties, all of them with at least one degree — in everything from psychology to programming — and a number with postgraduate degrees. We talked about the effect technology was having on work and they were well-versed in the pros and cons of what was happening: they joked about how most of them were likely to be made redundant by machines.

When I asked how they saw their careers unfolding, most thought that they would have many jobs across their working life and accepted this as the nature of work these days. In fact, they didn’t see it as a negative at all. They liked the idea of that flexibility and the chances it opened up for travel and different experiences. It struck me that it would have been interesting to have a similar discussion with drivers present as well. The experience of the gig economy — moving from job to job or contract to contract — is obviously very different for those with in-demand skills and qualifications than it is for those simply trying to string together enough to live on.

I asked what they thought about the prospect of driverless vehicles. Most thought it was inevitable.

“How would you explain the introduction of a driverless fleet if you were Uber?” Bool asked me.

“Well, first,” I said. “I’d stop lying about what is likely to happen.”

I told them I had recently seen an interview with Travis Kalanick in which he had played down likely job losses, even suggesting that autonomous vehicles were about “job creation.” While it is certainly true that new jobs will emerge with such a technology, there is also no doubt that what attracts companies like Uber to autonomous vehicles is the chance to lift their own profitability by reducing the number of drivers they need to pay. Pretending otherwise is nonsense, I suggested.

At the time, this might have seemed like the most pressing matter facing Uber, and I could understand why it had been raised. But the dramas that subsequently swamped the company have given it plenty of other things to worry about, to the extent that some are openly questioning its long-term viability. Still, while the corporate problems are likely to cause ongoing concerns, there is evidence that the core business of ride-sharing continues to perform strongly. The big issues are likely to be the role that founder Travis Kalanick will play in the company, and how quickly the autonomous vehicle market becomes viable.

After the lunchtime discussion, Bool walked me outside and used his manager’s app to order a car to take me to the airport (yes, at no charge). I told him how impressed I was with his team and he shook his head slightly and said, “Yeah, they’re amazing. When I was their age I was just looking to make money, to make a living. These guys really want to save the world.”

It’s easy to be cynical about a comment like that — if you want to save the world, why on earth would you work at Uber? — but I could see what he meant. Uber is hardly a poster child for a vision of a workers’ utopia, but I think we need to be careful to separate the good from the bad. It isn’t the technology per se that is the problem, but the social, managerial and economic structures within which it operates.

In trying to shape the future of work, it is important to understand how the technology can be used (and abused) and to understand the nature of the transformation that is occurring. We should be finding ways of creating the political environment in which these new tools will benefit the many and not just the few. The bare question that frames most of this discussion — “Will a robot take my job?” — is far too reductive.

I think the big mistake people make in trying to understand Uber is to compare it to the taxi industry. While it is true that Uber and other ride-sharing services have caused no end of problems for taxis, it is wrong to see them as merely a more efficient form of an old industry. At some point, especially if autonomous vehicles become the norm, the transformative power of a cheap, reliable ride-sharing service goes well beyond anything the taxi industry could imagine or achieve.

Driverless, on-demand vehicles are likely to change everything from the design of cities to the way we shop. Cars themselves will go from being a product we own to a service we order, and the overall number of vehicles on the road is likely to drop. (PricewaterhouseCoopers suggests the fall in numbers could be as high as 98 per cent.) Driving will be much safer and the knock-on effects will touch business and government alike. As analyst Ben Thompson has written, the race is on to see which company “becomes the default choice for all transportation.”

Uber is an easy company to hate. But given the extent of the transformation it represents, we are going to need a better response than that. •