Transportation Platform Labour Regulations
From Digital Culture & Society
Context Statement: Companies such as Uber or Lyft have begun to penetrate markets aggressively, taking over market share and profiting off an aggressive business model. With this in mind, it is important to view how regulations, as well as lack of regulations effect both labour and public good within the transport industry.
Regulating TNCs, should Uber and Lyft set their own rules
Article Reference
Li, S., Tavafoghi, H., Poolla, K., & Varaiya, P. (2019). Regulating TNCs: Should Uber and Lyft set their own rules? Transportation Research Part B: Methodological, 129, 193–225. https://doi.org/10.1016/j.trb.2019.09.008 Link to article
Context
This article is important to the issue of transport labor because it speaks about regulations and looks for solutions that benefit both the drivers and passengers, while also looking to take back some of the power that Transport Network companies have.
Overview
This article focuses on analyzing the effects of 3 potential regulations for transport network companies such as Uber and Lyft. The three potential regulations proposed are a minimum wage for all drivers, a cap on the number of drivers or vehicles, as well as a per-trip congestion tax (Li et al, 2019). In recent times there has been a push to regulate TNCs, as they are taking over the transport market aggressively, cutting out legacy companies. In 2018, New York became the first city to regulate these companies, implementing a minimum wage requirement for all app-based drivers (Li et al, 2019). This minimum wage was set so that drivers would receive at least $15 per hour after all incurred driving fees, bringing the real wage to just over $27 per hour (Li et al, 2019). This minimum wage implementation helps encourage companies such as Lyft and Uber to increase driver pay through utilization, instead of restricting the number of drivers through regulations (Li et al, 2019). We have also seen multiple large cities in Europe as well as the United States attempt to challenge companies such as Uber and Lyft in their assertion that drivers are no more than independent contractors. In December 2018, Uber lost a case against the UK Court of Appeal ruling that their drivers should be considered working employees rather than independent contractors (Li et al, 2019). In another case of this same regulation, the California state assembly passed bill AB5, which in effect would make thousands of gig economy workers now considered to be employees of those companies (Li et al, 2019). Uber and Lyft are currently fighting to reject this new bill because it would mean higher wages for their drivers as well as paid time off (Li et al, 2019).
After examining these current attempts by policymakers to regulate the fast-growing TNC industry, the paper goes on to analyze the effect of the three different regulations mentioned above. These regulations were an imposed minimum wage, a cap on the number of drivers or vehicles, and a per-trip congestion tax. They achieved this analysis by running different types of models, all aimed at predicting market responses if these regulations were to be implemented (Li et al, 2019). For the first regulation, an implemented minimum wage requirement, it was found that putting this in effect would benefit both the driver, as well as the passenger, while negatively impacting the profit margins of TNCs (Li et al, 2019). Implementing a minimum wage was shown to have greatly beneficial results for drivers and passengers, including an increased number of TNC vehicles, an increase in the number of riders, an improvement in the average pickup time of 10%, as well as a decreased travel cost (Li et al, 2019). When looking at the second regulation proposed, we see an opposite effect on the wage floor. When a cap is put on the number of drivers or vehicles for TNCs, it negatively impacts drivers. This will come in the form of reducing driver pay, which is the reaction TNCs would have if the driver supply was suddenly limited, meaning only TNCs would benefit by reducing the number of drivers (Li et al, 2019). A regulation imposing a congestion surcharge is an interesting prospect, which has a negative effect mostly on TNCs, due to the fact that with a congestion surcharge, platform ridership drops off significantly (Li et al, 2019). It was also stated that profits from a congestion surcharge in a city such as New York could earn up to 1 million dollars per day (Li et al, 2019). This revenue could go to improving the other forms of transportation within the city, such as the subway system (Li et al, 2019).
Strengths and Weaknesses
This article does a great job of both identifying potential regulatory solutions, as well as analyzing the exact effects they would have on users, the economy, transport services, and Uber itself. The article also does a great job of using data-based evaluation and evidence to prove their hypothesis about regulating the transport industry.
Assessment
This article offers a complex analysis of three potential solutions to regulating TNCs. It does a deep dive into the social and economic effects of implementing a minimum wage for drivers, a congestion tax for rides, as well as a cap on the number of drivers. This article is especially useful for policymakers because it shows exact outcomes for a variety of potential solutions that they could examine and implement.
Regulating Uber: the politics of platform economy in Europe and the United States
Article Reference
Thelen, K. (2018). Regulating Uber: The politics of the platform economy in Europe and the United States. Perspectives on Politics, 16(4), 938–953. https://doi.org/10.1017/s1537592718001081
Link to article
Context
This article explores how Uber came to be in the market and sheds light on their avoidance of regulations faced by legacy companies. This is important to the issue of transportation labor because it shows exactly how Uber has disregarded regulations and how this might be solved in the future.
Overview
This article delves into the political issues surrounding the introduction of Uber, and the regulatory responses made by different countries to react to this new actor in the market. In the early parts of the paper, we are told that Uber has taken a truly Silicon Valley approach to their business practices, with the “don't ask for permission, ask for forgiveness” motto being apparent through their business model (Thelen, 2018). With this introduction to the market, taxi companies and other legacy companies have pushed back against the growing industry giant in order to maintain their ways, however, after that there have been many different political outcomes varying by country and region (Thelen, 2018).
Since the inception and introduction of Uber, policymakers have had to adapt quickly and do their best to regulate these new “Gray area” companies that act without fear of the same regulations traditional companies face. For example, in the United States, the emphasis has been on figuring out whether or not drivers of these large transport network companies (TNCs) should be considered employees or not (Thelen, 2018). This is significant because companies like Uber and Lyft can avoid employer practices of providing employees with benefits or paid time off. Uber has tried to dodge this classification of its drivers at all costs, stating that they merely provide the infrastructure for independent contractors to utilize in order to reach their customers, acting as if they are only the middleman (Thelen, 2018). In other countries such as Sweden or Denmark, which are considered universalistic welfare states, the reception of these benefits is less dependent on one's status in their job role (Thelen, 2018). This means that the focus of their reaction to the introduction of uber comes in the form of tax regulations which dominate the politics surrounding Uber in this region (Thelen, 2018). We have also seen a much different approach in a country like Germany, where they have taken a very defensive approach to the regulation of Uber, pushing existing regulations upon them to the point in which the company has had to shut down operations within their borders (Thelen, 2018).
The paper then goes on to explain the different types of political issues that the introduction of Uber and similar companies presents policymakers with. The first of these issues is the competition that Uber presents legacy companies with (Thelen, 2018). For a long time, taxi companies have operated under strict laws and there are jurisdictions in which they can provide service (Thelen, 2018). Because Uber does not have to follow many of these strict guidelines, they pressure these companies by taking away market share with little to no adversity (Thelen, 2018). The next political issue is employment and labour laws. With Uber insisting that their drivers are merely independent contractors, they do not have to follow the same guidelines as companies that must pay their drivers a certain way and offer benefits and paid time off, giving Uber an unfair business advantage (Thelen, 2018). Another issue faced by policymakers is taxation. With Uber and similar companies providing a network for freelance workers, there become worries that many of these independent contractors fail to report this income, leading to a loss of tax revenue for the state (Thelen, 2018). The final issue faced is that of consumer safety. Because Uber is able to bypass many barriers to market entry such as certain driver tests and background checks, it raises the question of whether or not it is truly safe to allow Independent contractors to carry out such an important task (Thelen, 2018).
Strengths and weaknesses
This article has a comprehensive look into the political challenges that Uber has faced globally and it looks at both regulatory issues as well as different political outcomes. The article does a good job of showing international perspectives on the issue by examining different countries and how they reacted to the emergence of Uber into the transport industry. The article does seem to be a bit biased toward the users of Uber and takes a slightly negative tone in the way it describes the actions of Uber. while the paper discusses political issues related to Uber, it fails to acknowledge the viewpoints of consumers and how regulations would affect them in enough depth.
Assessment
This article focuses on the effects that Uber's unconventional business model has had on policies around the world. It does a good job of including different approaches that have been taken to regulate the transportation network company globally. Policymakers could benefit from reading this article as it gives different examples of how other countries have chosen to deal with the issues surrounding TNC’s entries into the transportation market.
The rise of Uber and regulating the Disruptive innovator
Article Reference Dudley, G., Banister, D., & Schwanen, T. (2017). The rise of Uber and regulating the disruptive innovator. The Political Quarterly, 88(3), 492–499. https://doi.org/10.1111/1467-923x.12373
Context
This paper speaks about how Uber came about as well as how it was received by employees and stakeholders of legacy companies. It goes into detail about the events of London through Uber's early years of adoption there, giving a good insight into real-life events that revolve around transport labour issues.
Overview
This paper begins by stating how Uber came about in 2009, to fill a gap in a frustrating transport industry that had San Francisco residents frustrated (Dudley et al, 2017). The paper classifies Uber as what it calls a “disruptive innovator” stating that it shows a blueprint of how to exploit competitors as well as regulatory systems (Dudley et al, 2017). These regulatory systems were forced by Uber to act in a reactionary way, however, they do not have the frameworks in place to properly regulate the transportation giant (Dudley et al, 2017).
Throughout Uber's expansion into global transportation markets, they have chosen to take an invasive approach that has looked to bypass the regulations already in place (Dudley et al, 2017). This has been apparent in Europe especially where Uber has had to deal with lawmakers in countries like Germany, Italy, France, and the United Kingdom (Dudley et al, 2017). They were even deemed completely illegal in the country of Hungary, and were thrown out before they were able to establish themselves in the market (Dudley et al, 2017). The main issues with Uber operating in the capacity to which they do is that they threaten existing transportation companies by avoiding regulations, and different social issues arise as they do not treat their drivers as employees, but as independent contractors (Dudley et al, 2017). Because Uber drivers are independent contractors they bypass the need to address issues such as hours worked by drivers, benefits, and other social security issues (Dudley et al, 2017). An interesting case study is that of Uber in London, where the TFL (Transport for London) has looked to accommodate the new platform, while also having to face serious backlash from established taxi providers within the area (Dudley et al, 2017). Uber entered their market in 2012, when the 2012 Olympic games were going on in London and the TFL worried that current transportation services could not match the demand that this event would bring (Dudley et al, 2017). Once in the market however, Uber continued to grow and replace traditional transportation by undercutting their prices through the use of their shared economy business model, meaning they didn't have to pay for cars or insurance as their drivers did all of this for them (Dudley et al, 2017). This led to a large protest being held by the Black cab drivers of London, where roughly 5000 cabs blocked the streets of London for hours, claiming that the TFL and London's mayor Boris Johnson had been too welcoming of the service (Dudley et al, 2017). While this and similar protests were coordinated in many large cities across Europe, they did next to nothing in terms of slowing down the Transportation giant, with Uber claiming that the protest only brought more attention to their platform, and led to an 850% increase in their usage (Dudley et al, 2017). The largest threat to Uber's near monopoly of this industry is actually in the way that it treats its drivers (Dudley et al, 2017). Since the early days of Uber in London, there have been many drivers who have come forward to demand that they get equal rights as drivers considered employees get (Dudley et al, 2017). Employees have also stated in the past that when Uber takes its 25% commission fee, it is eating into their livelihood, making it harder for them to earn a living wage (Dudley et al, 2017).
Strengths and weaknesses
This article provides a good overview of the inception of Uber and how it began to affect legacy companies during its aggressive market takeover. The use of London specifically is helpful as it shows real-world incidents and adds depth to the main issues with Uber's emergence as a large transport company. This article lacks an updated timeframe of regulations that Uber has to face, and an updated version of the article is necessary. It also talk about the economic repercussion of Uber's business style but fails to go into depth about these issues to fully explain the impact to the reader.
Assessment
In conclusion, this article provides a very good overview of Uber's disruptive influence on the transportation industry globally. The article is able to use London as an example of how Uber has been able to bypass regulations and policies while taking over the transportation industry and also illustrates the real-life tensions between these platforms and working-class taxi drivers. This article could be useful for policymakers who are looking to understand the challenges posed by disruptive innovators such as Uber. It could also be useful for individuals in the business industry who are looking to understand how Uber and Lyft have expanded so rapidly.
No18af 15:48, 3 December 2023 (EST)
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