How Do We Protect Jobs In An Uberization World?

The judge rejecting the $100 million (£75 million) settlement to let Uber compensate their mobile workers for not being classified as employees and entitled to expenses seems to be more about excessive conditions or "strings attached" relating the Uber company performance in compensating the workers rather than taking issue with protection of workers whose rights may be compromised.

Looking at the detail of the San Francisco judge ruling that the settlement was "not fair, adequate or reasonable" criticizes its conditions to payout 80% of the $100 million to Uber drivers in California and Massachusetts, and the remainder on condition of Uber over company performance. Yet this may be deemed unfair in that the workforce collectively enable this growth goal but individually have very little ability to influence this.

That's the challenge with digital workforces

From Uber's perspective, their company only exists on the back of a large volunteer workforce that use their ride-hailing company app and platform to carry out piece work. The Uber company growth and performance relies on this workforce to deliver the service. Uber wants to treat this non-unionized group as a contractor arrangement which gives them the maximum flexibility and minimum employee commitments. The challenge is that a virtual business needs physical workers, at least until self-driving cars come along, and that's another whole story. But as lessons of Uber pulling out of China and with the continued competition against Lyft in the US, their business model is predicated on an available workforce to operate locally.

Tradeoff of being a contractor versus fair play

The media reports suggest that Uber drivers have been unfazed but the $100 million ruling, the benefits that a contractor lifestyle Uber gives outweighs the employee "benefits" lost from permanent employee and salary. This model of remote jobs or the "gig economy" is a core model of the sharing economy that is starting to mature, and people and regulation are starting to wise up more.

The recent UK Deliveroo couriers demonstration objecting to changes of payment to £3.75 per job from an hourly rate of £7 an hour plus £1 per delivery illustrates the challenge a disparate workforce keeping their rights and benefits when there is little employee protection.

The sharing economy and the viable minimum working wage

This model of jobbing contractors that some call "uberization" seems to continue to grow inspite the impact on loss of job security and issues of contract and pricing changes. It fills a need for services that can be run over the internet and is persistent in demand to provide a new kind of employment lifestyle.

But if these low-cost fares businesses continue to evolve with increasing automation and the increasing availability or oversupply of a workforce, there will be some crunch points when pricing and cost of operations will impact human workers who may see falling income. This speaks to the wider issue of automation in society and how to protect working rights and a minimum viable living wage for all, something that in 5 to 10 years will be headline news I predict with the rise of robotics and AI.