Vehicle for change

The Synod of Victoria and Tasmania is recommending against using Uber and Uber Eats because of the exploitation of their drivers and delivery riders.

By Donald Moss

It’s a Sunday night at the end of a very long week and the last thing you feel like doing when you get home is cooking.

A beer or glass of wine perhaps, but definitely not the time spent and hassle needed to prepare something to eat for the whole family.

The easy decision, then, is to order takeaway food and, in cities such as Melbourne, Hobart or Launceston, there are plenty of options.

Nowadays, you don’t even have to head out and collect it yourself.

A few seconds’ work on your phone’s Uber Eats app means you can have it delivered right to your door.

All well and good, but have you ever stopped to wonder how much the Uber Eats driver or rider who delivers your food will make from the transaction?

Synod of Victoria and Tasmania Senior Social Justice Advocate Mark Zirnsak has and can tell you that it isn’t very much.

Whether you’re an Uber ride-share driver or Uber Eats food deliverer, the reality is that you are being underpaid.

Mark says Uber ride-share drivers earn about $12 an hour, while for delivery drivers and riders it can be as little as $6.67 an hour.

That’s why in August, Mark was successful in having a ban placed on Synod Ministries and Operations staff for using Uber and Uber Eats by staff due to the treatment of drivers and delivery riders, as well as concerns over their respective business models.

In announcing the move in mid-August, Moderator David Fotheringham said it was part of long-running campaigns to ensure a fair go for workers.

“The Uniting Church has a long history of seeking to ensure that people get fair and just treatment in their employment,” David says.

“Uber and other ride-share corporations are another stage in those businesses who seek to avoid having to comply with employment laws that apply to employees.”

Mark is also concerned about Uber’s long-standing lack of transparency surrounding its tax affairs worldwide.

And if it’s from little things that big things grow, Mark hopes the Synod’s decision might just prick the social conscience of a few other organisations around the country to join the fight and send a clear message to Uber and Uber Eats.

He says the issues around Uber and Uber Eats were highlighted by church members who indicated strong support for resources that could be used to mount a campaign aimed at improving outcomes for those in insecure work.

Senior Social Justice Advocate Mark Zirnsak is spearheading the campaign urging Uber and Uber Eats to pay their workers properly.

Adding to the heat on Uber was the release earlier this year through the International Consortium of Investigative Journalists of the Uber files, a treasure trove of material which painted a nasty picture of how the corporation conducted its business affairs globally.

“That release really caused us to go ‘yes, this really fits the bill of a company engaged in a whole model that revolves around insecure work, and we now have something that has caught our attention to investigate,” Mark says.

“The survey feedback from congregation members and tax material release by the Centre for International Corporate Tax Accountability and Research were the two things that drove us to have more of a look at Uber, and that look does fit our previous pattern of addressing insecure work and exploitation of workers.

“This isn’t new territory for us but what is different is the model Uber and other ride-share platforms are using to pursue their aims.”

While he is at pains to state clearly that the Synod has no issue with the drivers themselves, Mark says the key word when considering Uber’s business model is “exploitation”.

“Clearly it’s all about the business model of Uber and, while there may be some drivers who it suits, the impression we have is that for a substantial number of drivers who derive their main income from Uber, it is exploitative,” he says.

“It’s all about long hours for low pay.”

Mark says the basic problem with Uber’s business model is that it regards its drivers as independent contractors.

“Effectively, Uber is arguing that having a ride with a driver is like calling a plumber or electrician to your home,” he says.

“In other words, they are saying ‘we’re not employing them, they are an independent contractor’ and, I think, for the vast majority of us that just doesn’t pass the sniff test.”

The result, Mark says, is that a high proportion of Uber workers earn below minimum legal wages because they are not protected by domestic labour laws within the countries in which the corporation operates.

“In Australia, a survey found that ride-share drivers earned only $12 per hour on average after costs, with delivery riders in the on-demand gig economy found to earn as little as $6.67 per hour,” he says.

Mark says another serious issue is one of safety, of both Uber drivers and the general public, as drivers are sometimes forced to cut corners to deliver people and food as quickly as possible.

“The safety issue surrounds the fact that the overwhelming evidence suggests that low pay leads to safety issues on the road and, particularly in these cases, low pay often leads to drivers working more hours than it is safe to do and quite often involves them driving while exhausted,” he says.

“Driving or riding while exhausted obviously opens up risk issues, and we have had five Uber Eats delivery riders die in road accidents since 2017.”

Mark Zirnsak says there are concerns around how Uber organises its tax affairs.

Mark says the contracts Uber forces its independent contractors to sign effectively allow it to set conditions arbitrarily that the driver or rider have no say in.

“If they don’t like the conditions they can take it up through an arbitration process which is centred in the Netherlands and are required to pay any expenses associated with that process, which isn’t likely to happen,” he says.

While Uber’s argument that its drivers are independent contractors has been upheld in Australian courts, meaning it can block drivers from gaining access to its app, Mark says he hopes to see that ruling challenged.

In that, he has the full support of the Synod.

“The Synod will support legislative changes to improve the rights and conditions of people working in the gig on-demand economy to ensure they can enjoy the same working rights no matter how they are engaged to undertake their work,” David says.

While Uber and Uber Eats drivers and delivery riders are the more obvious example of its business model, Mark says there is growing concern around how it organises its tax affairs around the globe.

More specifically, he says, the question needs to be asked in Australia whether Uber is paying its fair share of tax.

Mark is also a member of the Tax Justice Network Australia, which is shining a light on how corporations like Uber minimise the amount of tax they should be paying.

In doing so, these corporations deprive countries of tax revenue that could be spent building hospitals, schools and other infrastructure.

“In Australia, for example, Uber made $1.1 billion in revenue in the last financial year, of which they said they had $50 million of profit, on which they paid $15 million in tax,” Mark says.

“That’s 30 per cent tax paid on that profit, which seems fair enough, but the problem is that if there is only $50 million profit on $1.1 billion in revenue, where did the other $1 billion go?

“So what you are seeing in their accounts is hundreds of millions of dollars being transferred to the Netherlands for unspecified services and administrative fees and it’s not very clear what all that money is going for.

“We don’t actually know whether this is legal or not, and the tax authorities probably don’t know either, but there isn’t enough transparency to know one way or another.”

So, what is Mark’s message for Uber?

“There would need to be substantive change for us to feel that they were an entity we were comfortable doing business with,” he says.

“Firstly, we would want them to move away from that model of them treating their people as independent contractors and accept them as employees, and that would need to be at a global level.

“Secondly, we would want to see them making their tax affairs completely transparent and work within the spirit of what our tax laws allow, rather than what they can get away with.”

Uber driver Peter takes home to his family as little as $75 a day.

When time doesn’t mean money

Uber driver Peter represents the human face of Uber drivers and delivery riders being exploited on a daily basis right around the country.

Crosslight spoke to Peter, who drives in a major city, at the end of August to gain some sort of insight into the life of an Uber driver.

He has been in Australia for eight years, an Uber driver for five years and is the sole provider for his young family.

Driving as an independent contractor on two days in the week he spoke to Crosslight, Peter made $317 but took home just $150 to his family after working 20.5 hours.

“I have to pay GST on that $317, so immediately $30 to $35 is gone, I have spent $50 to $60 on fuel and then there are other expenses like insurance, phone, cleaning and maintenance,” he says.

But the biggest blow comes after all that, when Uber takes its commission of 27.5 per cent.
While he has completed studies and has a working visa, a shortage of jobs where he lives and the need to provide for his family means driving for Uber has become a necessity for Peter, rather than something he would normally choose to do.

He says the demographic of those driving for Uber means they are an easy target for exploitation.
“It is basically people who are jobless or who are students,” he says.

“So, in the name of flexibility, Uber is exploiting these people.”

Peter says Uber’s refusal to increase the amount passengers pay per kilometre is one of the major reasons life is so hard for drivers.

In the city in which Peter drives, Uber’s fare is based on $1.24/km and 42c/minute, so the best a driver can hope for is $1.66, assuming they can drive one kilometre in a minute.

“Uber hasn’t increased its fares since 2017 (yet) they are deducting an insane 27.5 per cent of driver’s earnings,” he says.

“This is a First World country but they are paying Third world wages.

“Uber says they are providing flexibility, but that doesn’t mean they should be allowed to exploit drivers.

There needs to be a balance.

“They also say they are serving the community, but drivers are also a part of the community, and Uber could help them by removing the 27.5 per cent commission.”

Adding to the problems facing a driver, says Peter, is Uber’s refusal to give details around the passenger being picked up.

“Uber will not share the details of the ride they are sending you to and where they want to go, which is unethical,” he says.

“So they might send you to a job 30km away and when the customer hops in they tell you they only want to go to the next street, so you might drive for a total of one hour to make $5.50.”

Peter hopes the Uniting Church’s decision to shine a light on Uber’s treatment of its drivers will create a groundswell of public opinion.

“It’s very stressful, I am working around 50-60 hours a week and, after all expenses, I am earning about $10 per hour,” he says.

“I thank the Uniting Church and we all need to raise our voice on this issue.”

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