Lack of worker rights allow for exploitation in shared economy

Houston has led the nation in creating a responsible consumer-oriented market for transportation network companies (TNCs) like Uber. For this market to be safe and prosper, however, the Houston City Council needs to pass emergency regulations that prevent the producers in this market — our fellow citizen drivers who, as contract workers, have no employee protections or rights — from being exploited in the new shared-economy.

Uber has been particularly egregious in its cavalier and disrespectful mistreatment of its drivers. Taking full advantage of the lack of any worker protections in Houston’s TNC ordinance, Uber has consistently marginalized its drivers by reducing the base fare, mileage rates and per-minute compensation in a race to the bottom — where drivers in many cases end up paying Uber for the right to participate in their deceptive and disingenuous scheme.

You only have to look at the negotiation strength of NYC Taxi & Limousine Commission to understand why the Houston TNC market will fail without constructive rules of fairness. Drivers in Houston compared with drivers in New York respectively earn $4.75 versus $16.80 per hour, and 62.6 cents versus $1.40 per mile.

Regardless of costof-living differences, workers in New York are not worth three times the value of Houston workers. As a TNC consumer, it may surprise you that, despite the much higher compensation to its drivers, New York Uber rates are more than a third less than Houston Yellow Cab rates.

The numbers are actually even more disturbing than they initially appear. In New York, due to its population density, Uber drivers drive 1.1-1.2 miles for every mile they get paid. Conversely, Houston’s large geographical area causes its Uber drivers to drive 2.6 miles for every mile they get paid. This means that New York Uber drivers actually make more like 6-7 times what Houston Uber drivers make. It doesn’t make any economic sense.

There may be 16,000 Houston licensed TNC drivers. To assure the continued exploitation of its drivers, however, Uber has sued to keep the city of Houston from releasing records that are customarily public documents for city-regulated businesses. Uber may at the moment have the upper hand legally, but intimidation tactics are not good politics, nor is their prejudice against Houston workers good for our economy. There is simply no rational reason why Uber should treat its Houston drivers as being worth one-sixth of its New York City drivers.

Uber also claims to be socially responsible, yet it recently agreed to pay $28.5 million to settle lawsuits brought by customers who alleged the company misrepresented its “safety-related” practices. Following the settlement Uber renamed its “Safe Ride Fee” as a “Booking Fee.” Here in Houston, the city performed the TNC driver background checks. Nevertheless, Uber charged riders the fee as if Uber provided this service and incurred the related costs.

However, this recent settlement did not address Uber’s management practices that encourage its drivers to continue driving beyond the hourly limitations set by federal law for other transportation workers.

TNC drivers are circulating an Emergency Petition that amends Houston’s City Charter. It limits transportation network fees; sets a break-even baseline for charges; and enables them to have an effective trade group, the Transportation Network Drivers Association. These changes will not guarantee that drivers make money, but it will create a level playing field where TNC companies must share the risks that currently are borne solely by their drivers.

When the standard 54 cents per mile IRS deduction is taken into consideration, Houston drivers lose 77.8 cents for each mile they drive. Moreover, TNC drivers further incur wireless Internet fees, local property taxes and commercial insurance costs not considered in the IRS calculation. The more you drive the more everyone — except Uber — loses. It is time to do the right thing and make muchneeded incremental changes to our TNC Ordinance.

“Uber has been particularly egregious in its cavalier and disrespectful mistreatment of its drivers.”