Should we use Uber?

Clinton Barnes and Nick Dixon-Wilmshurst debate Uber


Clinton Barnes

Embrace change and make Uber work for workers


The sharing economy is about using under-utilised resources. It’s an economist’s wet dream because it means the most efficient use of available resources. But that’s only true until it’s not about that, and it’s just about exploiting people with low economic power because they’re low-skilled or desperate.

Disruptive innovations aren’t without the old fights we know too well. There’s nothing inherently anti-worker about sharing, it’s just that in an area of low or no regulation, we’re leaving workers open to exploitation. We know corporations act like this in a regulatory and union vacuum.

Uber as a corporation will naturally want to push down wages and push up prices. That’s what corporations do. Until they’re matched by people with equal or greater power.

Wages have been driven down in several U.S. cities leading to new unions being established to try to wrestle back some power from the $US34 billion corporation (‘Against Sharing’, Jacobin). Lyft, the main competitor to Uber, is the same, if not worse, when it comes to exploiting drivers (‘Lyft Drivers Are Burning Their Pink Mustaches’, Vice). We can’t expect a low-skilled, easily replaceable person to challenge a multi-billion-dollar multinational.

That’s why we need a policy solution that underpins fair conditions and fair wages. Of course, Uber’s defence is that they don’t have workers. But whatever the drivers are called, power is currently imbalanced, due both to a legal limbo and how bad the taxi alternative is.

The taxi industry has been broken for a while now. We have gouging oligopolies, underpaid and overworked cabbies, and unpleasant customer experiences. And boy, are they unpleasant. The underappreciated and exploited do not make good customer service staff. How is this still a thing that needs to be said?

A report by the ABC’s Radio National in 2013, ‘Poor fare: the tough life of the Australian taxi driver’, found that complaints against taxis were rising, patronage was falling, but prices were still rising. This illogical scenario meant someone was bound to feel the pain.

And sure enough, it was workers. The report revealed that the average income for taxi drivers was scandalous at $29,000. There are so many snouts in the taxi trough that drivers are just catching the trickle down. License owners, taxi networks, government, and of course Cabcharge, are all trying to squeeze what they can.

It’s hard to calculate how much Uber drivers earn. But the worst estimates put the average around $30,000. Not too different from driving a taxi.

And this is the best part of Uber. Its rise has focused minds on a policy problem. Ride-sharing was meant to expand the market – getting people to use Uber instead of their own car. Instead we’ve replaced taxis at a rapid pace.

Our ACT Labor Government recently found a solution: legalising and regulating Uber and reducing the cost of taxi license fees. That is a positive outcome that Uber provided the catalyst for.

Uber’s two-way reviewing system keeps people pleasant. Uber’s system of dual GPS tracking, sharing contact information, and instant rating is a tech-heavy way of getting people to behave.

Uber has achieved through technology what governments have been trying to achieve through regulation for decades.
The taxi industry in Australia is so horribly bad that you can charge a customer 20 per cent less, and yet the driver’s income is comparable.

The socialist can rest more easily in the back of an Uber than a taxi. We need to embrace change and make it work for workers – they’re counting on us.


Nick Dixon-Wilmshurst

How not to handle Uber: the ACT Government fail


Uber represents old-fashioned unregulated free market economics that shifts profit upward and risk downwards. The brand is the
biggest name among companies that operate informally.

Uber’s model specifically appeals because we so royally messed up how to regulate taxis. However, workers already suffering poor
conditions in comparable industries cannot excuse companies that further exploit the situation. A case can and must be made for a system of mutual obligation.

When Uber was recently legalised in the ACT, the ACT Government showed no will to argue the case. Instead Uber was legalised
under the guise of a ‘Taxi Industry Innovation Review’ – which looked to ‘market disruption’ as a panacea for a broken system caused by decades of government inaction. 

In defence of the ACT Government, Uber invested heavily in marketing their product this way. Depending on which way the
wind blows, Uber claim ‘flexibility’ for people to earn a few extra dollars, or ‘job creation’. But these companies directly replace
services already offered – often by businesses with significantly higher obligations to their employees.

Uber (like TaskRabbit and AirTasker) structure their business model to ensure workers sourced by these apps are legally classed as
independent contractors. Like taxi drivers before them, this low-paid, low-skilled work was never what this legislation was intended to cover. 

The employment relationship is nothing more than labour hire. The worker does not independently source their client or tender for the work. Uber can terminate the employment relationship and takes a percentage of the cost before any profit. The arrangement does not offer any rights for workers. It has the potential to undermine Australia’s system of employment regulation.

It has been argued by people in our own Party that Uber’s ‘surge pricing’ replaces penalty rates. Surge pricing is set by the company in response to demand. There is no guarantee that prices will be higher at undesirable work hours, so the driver cannot make rational decisions about when to work and for what compensation they should surrender their family and community time, which is what penalty rates are intended for. Taxis at least have set prices for different times.

The ACT Government’s failure to respond adequately to the challenge of regulation was not an oversight. Two motions were passed at ACT ALP Conference ahead of Uber’s legalisation calling for assurances that Canberra’s workers would continue to operate under the National Employment Standards or better.

The Chief Minister’s office refused to debate the issue on the floor of Conference. Rank-and-file Branch activists were pressured to remove direct reference to Uber from their motions. They were told: We don’t want to scare Uber if they don’t want to be regulated they’ll just operate illegally. Uber dismisses obligations to conditions and wages as ‘disruptive’. This is a dangerous challenge to economic justice.

The motions passed without a single speech against. The only requirement is that Uber pay one $600 licence fee for operating in Canberra. The ACT Government is projected to lose $2 million from transport licences.

Uber supporters often point to the pitiful state of our existing taxi system. But we should never throw away the conditions of all workers just because some are already lost – instead we must redouble our efforts to improve conditions for those in need.

The challenge for the ALP is to establish employment relationships that protect workers in companies like Uber.

The ACT government failed, but other jurisdictions should consider how they can nurture business opportunities and encourage wealth creation without undercutting vital protections and economic justice.

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