Thu, Sep 12, 2019 - Page 9 News List

Ride-hailing platforms require better government regulations

By Olga Morawczynski and Julie Zollmann

In May, just before Uber’s $82.4 billion initial public offering, the company’s drivers, together with those for its fellow ride-hailing platform Lyft (many drive for both), participated in an international day of industrial action, holding demonstrations in 24 cities — from London to Melbourne to New York City — to demand higher pay and better working conditions.

However, grievances with ride-hailing companies that charge riders low fares and extract hefty commissions from drivers are not limited to rich economies.

In July, driver associations in Nairobi, Kenya, urged stoppages by those working for digital-based ride-hailing services — including Uber, the Estonian company Bolt (formerly Taxify) and the locally owned Little Cab — over precisely such complaints.

Although key players agreed to a set of payment principles last year, little changed in practice.

The rise of platform labor — digitally mediated service work — creates a policy conundrum. On one hand, it benefits consumers by providing low-cost on-demand services and can benefit workers by giving them access to those consumers.

In Kenya, at least 6,000 people work as drivers for ride-hailing platforms.

On the other hand, the quality of these new work opportunities remains unclear. While workers value the scheduling flexibility often offered by platforms, prices are set by opaque algorithms and corporate strategies.

Companies are not accountable to their workers. It is difficult to know precisely how many drivers there are, let alone what they are actually earning — though our early research in Kenya suggests there is reason to believe that it is not enough.

When ride-hailing companies first emerged, they attracted drivers with high fares. However, in an effort to increase ridership, they slashed prices over time. Because the additional rides were insufficient to offset the drop in per-mile rates, drivers’ hourly earnings plummeted.

This practice was apparent everywhere, but it was particularly painful for drivers in low-income markets, where, unlike in the US or Canada, they typically acquire a vehicle specifically for the job, using their savings or taking out loans. They may also lease vehicles from car owners, called “partners,” on fixed weekly terms.

As their earnings fell, drivers struggled to cover their fixed costs. Forced to work longer hours, some ended up in fatigue-related accidents, according to drivers and local insurers.

In response, Uber imposed new limits on drivers: They could work for no more than 12 hours at a time, with at least a six-hour break in between.

For many drivers in Kenya, simply leaving the industry is not an option, owing to outstanding debts, depreciation of productive assets and a lack of alternative income-generating options in a country where only 16 percent of workers have formal jobs.

Desperate to make ends meet, many have been forced to maximize work hours by using multiple apps.

Our early research in Kenya suggests that a typical driver in Kenya works 12-hour days, six days per week.

Still, not all drivers support the strikes. Some — particularly those who purchased their own cars or have some offline clients — are relatively satisfied with the platforms.

While they would prefer fairer rate-setting practices, they say the frequent strikes are not worth the lost revenue.

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