Case Study: The Social Cost Of Uber

2003 Words 9 Pages
The Social Cost of Uber
In today’s society, businesses are more competitive than ever. Innovation levels are at an all time high and in order to be successful in today’s market you need a business model that is both sustainable and profitable. Applications are among the top profit generating businesses in today’s world. How do you create an application that keeps raking in the profits? Well, self services seem to be the trending idea. You have Handy’s for home services, Postmates for restaurant food delivery , and even AirBnB that allows you to rent a house with a click of a button. These applications have capitalized on-demand labor and found the biggest loophole of the labor market. Convenience and accessibility has taken over in today’s
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The drivers want benefits and sick time, but they aren’t in reality required to work. For the drivers that choose to work 40 or more hours a week, that is still a choice and a luxury that most other jobs would not even consider offering. This case relates to the problem of worker/job misclassification. This issue is who has misclassified, Uber or the drivers? Uber isn’t meant to be a career and so it shouldn’t be treated as one. It was simply created to help people with a little extra time make a little extra cash. However, because they have essentially eliminated the career of taxi driving, their is an evident problem. If a normal taxi cab driver switches to Uber they lose their benefits and often times need a newer car to participate. While Uber’s pay per ride is more than fair, in a lot of cities the demand isn’t enough to make it a career job. Uber Los Angeles will easily trump Uber North Dakota so as easily foreseen, the amount of money made is very dependent upon location. In this case it does seem that the drivers are the ones misclassifying themselves as employees. There are very few companies as flexible as Uber with the opportunity to “Be your own boss.” While Uber markets on their website, the potential to make $90,000 per year, this is a stretch. This is where participation comes into play. Drivers choose the amount of hours and efforts …show more content…
The great thing about on-demand work is you choose when and how many hours you work. The only adjustment we could see Uber making is giving benefits to those drivers who exceed a minimum of 20 hours per week in services, thereby granting them “full-time” employment status. However, since these drivers aren’t classified as employees, this is not currently a necessary change. More problems would come from this because you can’t just classify some drivers as workers and others as non-employee, paid volunteers. Moreover, if Uber was to adopt a minimum wage, all they would have to do to supplement the change would be to lower the amount of commision gained from each ride given. While Uber drivers currently retain roughly 75% of the cost of the ride for themselves, you could see this number drop more than significantly if suddenly drivers get classified as employees. Not only would the pay get balanced out, but you would also see tons of drivers laid off because a larger workforce is harder to maintain. Suddenly, it would be harder to get a job with Uber and the application would lose much of it’s value because wait times would increase dramatically. This is obviously a lose lose situation. Uber was meant to be a technology platform simply looking to connect willing drivers to those in need of rides. If their drivers really want benefits they

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