How to make Uber & Co. treat workers right

These days, Richard Gbewornyo is mostly happy with his job. 

"It's a cool way of making cool cash," he told DW. He is one of a few thousand people who drive for Uber across Ghana, and one of more than 5 million worldwide.

Like many, Gbewornyo was attracted to the job by its promises of flexible, lucrative, independent work. 

"You determine when to start work, when to finish. And you're setting your own targets."

And the demand is there: Whether it's Uber, Bolt, Ola in India, China's DiDi or Malaysian Grab — in many countries around the world, ride-hailing platforms are undeniably mainstream. Online surveys carried out by Statista Consumer Insights, for instance, found that almost all participants had used ride-hailing services in the past year.

But while these platforms offer some benefits, working for them also comes with major drawbacks. Drivers often earn low wages, have no social security, and get little support from the platforms that determine their livelihoods.

"I was robbed on Uber", Gbewornyo recounts. "I lost valuables. I lost my personal phone. [Uber] told me there's nothing they could do about it. Some other drivers even lost their lives, and nothing has been done. There's no insurance policy, nothing, nothing for the drivers."

Platform operators usually don't employ drivers, but instead treat them as independent contractor partners. For each actual employee, they manage hundreds of such driver-partners.

Working in this system can be profitable at times. 

"On a very good working day, you can make 600 Ghana Cedis ($53, €49)," said Gbewornyo. "You buy [fuel, for instance,] for 400, and then 200 is your profit for a day." 

By comparison, an employee in Ghana earns an average income of 700 Ghana Cedis per month, according to the International Labour Organization.

Enticing drivers with peak earnings like this is an integral part of platform operators' strategy according to Uma Rani, senior economist at the International Labour Organization, who has been researching the digital economy since 2016. 

"All of them have venture capital funds that they pump in to subsidize both the drivers and the consumers. They are basically disrupting the local market," she said.

Platform operators worsen conditions as soon as they can

Once companies have enough drivers and customers to dominate the market, Rani said, they quickly worsen conditions for workers. 

In a large survey she led for the ILO, an Uber driver in India said the commission charged by the app for each ride "increased gradually from 10 to 15 to 20 to 25 and now it is 29%." In Ghana, Uber lowered their commission fee from 25 to 20% only when competitor Bolt began operating there as well.

Drivers earn far less than average wages on most days

Gbewornyo and his fellow drivers don't make 200 GHC ($18, €16) in profits every day. 

According to Rani's research, as well as another case study by French researchers, drivers in Ghana end a 12-hour shift with, on average, around $40 in gross revenue. After the platform operator takes a 20% commission and expenses are deducted, including fuel costs and car rental fees, drivers are left with an average of only $5 (55 GHC) in profits per day.

Out of these earnings, drivers must cover personal expenses, as well as insurance and health care. As a result, they usually work extremely long hours to earn anything resembling a decent income. Additionally, drivers are responsible for all job-related costs and risks, including insurance. This is true in countries around the world, with many having even more challenging conditions than Ghana.

Drivers often don't accept these conditions: A study by the University of Leeds identified more than 1,200 worker protests between 2017 and 2020 in four platform sectors: ride-hailing, food delivery, courier services and grocery delivery.

More than half of those protests (63%) cited pay as a major issue, making it the workers' top concern globally. Health & safety concerns were mentioned as a frequent reason for driver protests in Latin America and Africa, where incidents like the robbery Gbewornyo experienced impact the work lives of many drivers.

Protests like these can have an impact. After Uber slashed its fares by more than a third in Kenya in 2016, it faced massive protests from drivers, who saw their already meager earnings erode further.

The Kenyan government eventually picked up workers' demands. In 2022, new regulations capped the commission for all ride-hailing apps at 18%, a significant reduction from the previous 25%. Uber initially resisted the regulation, but finally complied in November 2022.

Some governments are moving to protect platform workers

Uma Rani from the ILO explains that while such government responses can be successful, they are still rare. Most of the regulations aimed at improving the working conditions of platform workers have only been introduced in recent years.

Successful approaches differ by region. In Europe and the US, the focus is primarily on granting drivers a clear employment status. Being classified as an employee rather than an independent contractor would ensure access to a wide range of employee rights and benefits, such as insurance, health care, minimum wages, and legal protections.

However, in countries with large informal economies, other aspects need to be considered, Uma Rani said. 

"Even if they establish an employment relationship, workers are not going to get the benefits," she told DW. 

Workers and governments in many countries have, for instance, focused on pricing instead. The specific approaches vary, Rani said.

In Kenya, ride-hailing platforms are now part of the transport sector. This means that the government can restrict commission fees, fix pricing, and regulate working hours.

India also capped commission fees and ensured that the social security code applies to all workers, regardless of their employment status.

Other countries in Southeast Asia have instituted social security and work injury benefits for platform workers.

The list is growing, but huge gaps remain. 

"There's a lot of regulatory uncertainty," Rani said. "We need to have an international global dialogue about which regulations are necessary for this sector."

 

Edited by Gianna-Carina Grün and Ashutosh Pandey.

For data, code and methodology behind this analysis, see this repository. You can find more data-driven stories by DW here.