Demonstrate how are the implications of business model’s like Uber’s on the future of employment? Do “sharing economy” companies have a responsibility
According to the given case analysis, the international ride sharing service company - Uber is producing more than 20,000 monthly jobs, including the office workers and 50,000 driver's jobs per month, all around the world. As per the reports of Washington post, average annual salary for an UberX driver in New York City and San Francisco working for a minimum time period of 40 hours per week is approximately $90,766 and $74,191, respectively (Hall & Krueger, 2018). It is evident that the average annual income of a New York City cab driver is approximately $30,000, which is three times less than UberX. According to the bureau of labour statistics, Uber has included more than 3,90,000 job opportunities in last one year since 2017 and which expected to double by 2020 (Hall & Krueger, 2018; Leighton 2016). However, the company is not involved in creating changes for the unemployment rate, as per reports of labour market. This is because the drivers who work under the Uber app accept the ride and pick the customer, were considered as independent contractors instead of employees (Posen, 2015). These independent contractors come under the Central bureau of household survey for alternative employment source, which are not included in the payroll report, despite of being considered as freelancer in the job market analysis. According to the 2015 report of Uber, CEO Kalanick, there are approximately 26000, 22000, 15000, and 10000 Uber drivers in New York City, San Francisco, London, and Chengdu, respectively. Unlike other job opportunities, Uber facilitates both full-time as well as part-time job facility. Survey reports suggests that 61 % of Uber drivers hold another job in addition to working for the company, 24 % of drivers accepted Uber as sole income source, 50 % of them are new to the transportation industry. Likewise, 87 % of drivers joined because of job flexibility, 8 % were unemployed before joining Uber (Hall & Krueger, 2018). Considering the statistics from US alone, Uber drivers' accounts for only 0.56 % of the total nationwide employed population. Thus Uber is considered as a good part-time as well as temporary job opportunity for an unemployed individual. More than 90 % of drivers in US, opt for an independent driver job rather than engaged in the traditional nine-to-five job, which keeps Uber in a better position (Bales & Woo 2016). Despite of all the given statistics, the driver working for Uber Company, do not necessarily considered it as the long-term job solution.
Within the scope of sharing economy of short term demand, job opportunity in sharing services, the legal rights of workers or contractors are being exploited. It is however expected to continue in the near future as well. The reason is also linked to the fact that the service platform of sharing economy is reluctant to share the user data, and there exists no clear agreement with the workers (Hamari, Sjöklint, & Ukkonen 2016). Most of the companies with sharing economy strategic plans, treat their workers as contractors and/or partners instead of employees, and escape themselves from providing them the legal obligations. This strategy is being adopted with the intention to save their operational cost and raise the profit margin. This legal perks to be provided includes, health insurance, minimum wages, overtime benefits, unemployment benefits (those who laid off), workers compensation (those who get injured during job period). They deny of providing the range of protection facilities accorded employees, since it is not considered within the boundaries of their primary source of income. Apart from this, the employers should also provide their workers with 'proof of employment' what is required at the time of getting a loan or a house rent or lowering taxes. For instance, Uber should focus on providing the extra costs incur during these extra costs include parking charge, vehicle maintenance, and fuel charge, which is handled by the driver alone (Zervas, Proserpio & Byers 2017). In addition to these, the driver should also be included with amenities like health care facility or pensions, or the worker's compensation, which is needed during the time of any accident. Instead, Uber can also increase their wages, so that to cover these gaps, the Uber drivers can purchase their own benefit plants including both social security as well as Medicaid payment. According to the report of national employment label project, 10 to 30 % of the employers have incorrectly labelled with their employees, so as to get rid of all these legal obligations (Sundararajan, 2016). It is reported that, the sharing economy companies like Uber, Lyft, Airbnb holds more than 1099 independent contractors do not provide benefits as of the full time employees (Zervas et al., 2017). This strategy restricts the independent contractors from suing these companies against any legal matters. In conclusion, it is responsibility of these sharing economy companies and policymakers to guarantee alternative protection strategies for these worker's safety. in protecting their workers (or contractors?)