Photo: flickr/Ashtonpal

The ride-sharing app Uber has received a lot of press in recent weeks, most of it bad.

Thousands of smartphone users took photos of themselves deleting the Uber application from their phone, after Senior Executive Emil Michaels suggested that the company spend a million dollars to smear journalists who have criticized Uber.

Much of the controversy around Uber stems from its attempt to import an operational model that works best for online exchanges into the real world. In the “fine print” on their website, Uber claims that it “is not a transportation provider.”

As a digital platform, Uber operates with the ethos of a tech start-up, yet it connects buyers and sellers in the real world, where there is more liability and higher regulatory standards.

In Toronto, the city has applied for a court injunction to halt the expansion of Uber’s lower-cost application UberX, which allows almost any vehicle owner to sell their services as a cab driver without proper commercial licensing.

Though the company has not officially launched in Vancouver, the city’s four biggest taxi companies have filed a preemptive injunction against the company. 

With investments from heavyweights like Google and Goldman-Sachs and an accumulated $1.5 billion in venture capital, Uber can afford to fight these types of court battles around the world while continuing to expand aggressively.

The company has operations in 229 cities in 49 countries, and counting.

Like the house-sharing company Airbnb, UberX is part of what has been described as the “sharing economy.” Born uniquely from these times, it marries an abundance of precarious workers with ingenuity of Silicon Valley to create a service that is hyper consumer friendly. But at what cost?

The Canadian battleground

Until recently, Uber had been operating within the purview of the existing taxi licensing system, like most other cab companies. It hired licensed cab drivers, who paid a fee to access clients via the mobile app, and charged the same base rate and per mileage fare as other cabs.

Under this model, Uber entered into competition with existing cab companies for both drivers and customers, but did not necessarily pose a threat to the existing industry model.

A Toronto taxi driver named Irfan estimated that about half of the cab drivers he knows run the Uber system alongside their existing dispatcher radio, which allowed them to pick up more fares.

“We are not against Uber,” said Sajid Mughal, President of the Toronto-based iTaxi worker’s association. “If they get licenses they are welcome. The city’s taxi drivers will welcome their new technology.”

However, drivers do take issue with UberX, the company’s low-cost ride-sharing program which launched this fall in Toronto, Mississauga, Ottawa and Montreal.

UberX allows anyone with a car and a police background check to become a driver without going through the existing licensing system.

UberX base fares and per mileage rates are also significantly cheaper than the standard rates for regulated taxis, which is why the app is so popular with customers and so detrimental to drivers.

“Now there are 5,000 cabs in Toronto, with UberX there could be 25,000 drivers. For someone who relies on the taxi industry, that person will suffer significantly,” said Mughal. “They will not make enough money to survive.”

Municipal regulators in Toronto, Montreal, Calgary and Vancouver have also spoken out against UberX. They say that their primary concern is safety and accessibility, which a regulated and licensed taxi industry is forced to provide.

Outside of the regulated licensing system, there is no incentive for Uber drivers to offer wheelchair accessible rides. Many of the drivers I spoke to also expressed concern for passenger safety. Regulated drivers must be CPR certified, and they and their cars go through rigorous safety checks.

Uber precarious 

The Uber business model relies on the precarious labour of its so-called “partner-drivers,” but this highly precarious form of labour is not unfamiliar to most taxi drivers, who already work in highly precarious work situations.

In a given Canadian city, there can be several types of taxi licenses with different jurisdictions. Because the number of taxi licenses are restricted, these licenses are held as capital commodities. In Toronto, the standard taxi license — which is currently being phased out — can be worth as much as $350,000 each. Brokerage firms often control a large number of licensed plates as well as the dispatch systems that connect drivers to their customers.

Regardless of whether they own or lease their cars or licenses, all taxi drivers are considered “independent contractors” which means they are excluded from labour code standards, such as maximum hours or minimum wage. They are not eligible for sick days, pension plans or employment insurance.

Because they are technically self-employed, drivers are responsible for much of the overhead costs associated with their business. This includes the cost of the dispatcher rates, gas, maintenance costs and leasing fees, which are about $700 per week.

A 2008 study conducted by researchers at Ryerson University and the University of Toronto estimates that Toronto cab drivers are making well below minimum wage, no matter how they manage their driving work. For instance:

  • Ambassador Cabs: own their licenses but are not allowed to rent or lease their vehicle

    • Average hourly rate: $6.49 an hour

    • Average working hours: 70 hours per week

  • Lease Drivers: own their car but lease their license

  • If they lease to a second driver

    • Average hourly rate: $8.81 an hour

    • Average working hours: 62 hours per week

  • If they do not lease to a second driver

    • Average hourly rate: $3.44 an hour

    • Average working hours: 72 hours per week

  • Shift Drivers: rent their taxi for a daily rate from a brokerage, owner or lessee

    • Average hourly rate: $2.83 an hour

    • Average working hours: 77 hours per week

Though many of the drivers I spoke to preferred to go unnamed, they were eager to express their frustrations with the current licensing system.

“They’re all rich guys, we are workers!” said one driver, in reference to the brokerage firms and garages who lease them cars.

“There’s nothing in it for workers, only owners and garages,” said another driver.

Despite their dissatisfaction, most drivers agreed that things have only gotten worse since UberX came to Canada.

“On weekdays, a cab driver barely survives,” said Ambassador driver M. Azad. “Only weekends, Friday and Saturday, they can make some money.”

But with UberX, just about anyone can start picking up fares in their off hours, making it nearly impossible for professional drivers to make a living.

Many drivers say they are thinking about changing professions.

Irfan, a shift driver in Toronto, told me that before UberX, he was making $1,400 to $1,500 a month. Now he makes between $800 to $900 a month.

“I will leave, I have to pay my bills so definitely I will quit,” he said. “We need to feed our families so I am ready to work at Tim Hortons or Starbucks.”

Ella Bedard is rabble’s labour intern. She has written about labour issues for Dominion.ca and the Halifax Media Co-op and is the co-producer of the radio documentary The Amelie: Canadian Refugee Policy and the Story of the 1987 Boat People. 

Ella Bedard

Ella Bedard

Ella is a historian-come-journalist with fickle tastes and strong progressive principles. She has written about labour issues for Dominion.ca and the Halifax Media Co-op and is the co-producer of the...