Recently the State of New Mexico passed HB0272 which is the New Mexico Transportation Network Company Services Act. It goes into effect July 1, 2015 and is proof that the Drivers needed a Representative in the making of these regulations. The thing most required by regulation of the Ride-Hail Services is restrictions on how the Ride-Hail Services are allowed to change the rates earned by Drivers. There are not many occupations where you can make a dollar one day and 25 cents the next and nobody give a damn how severe the impact upon your ability to pay your rent, feed your family, or even keep your car running. But, Ride-Hail Services are all under the impression that these are not important factors in how they conduct day to day business today.
2015 has become a very stressful year for the Ride-Hail Drivers as Uber has reduced Rider fares to such a degree that Drivers are on the verge of financial crisis with no relief in sight. Anybody that got suckered into the Uber Auto Purchase Program will likely have to file bankruptcy and give up on being a Small Business as the payments on the cars purchased preclude being able to afford food after the day is done. Most all the other drivers may survive but it is likely none will actually take home minimum wage.
Uber tells the media that drivers are making anywhere from $20.00 to $45.00 per hour as though the drivers are part of the affluent when in reality Uber has reduced the driver earnings to a fraction of what they used to be and increased Uber’s income while doing so. As Independent Contractors are not protected by most of the labor laws, the regulation of earnings for the drivers does not exist leaving the Driver exposed to the risks of losing everything at any time due to act of the Ride-Hail Services. Minimum Wage Laws do not protect the Independent Contractor and by labeling the Drivers as Independent Contractors Uber is able to push all responsibilities of expense, insurance, and taxation onto the Drivers which are not being paid adequately to carry the burden.
Taxation is a good example. Because the drivers are Independent Contractors, Uber does not have to withhold or pay taxes on the contractors income. Employers pay a portion of the taxes, social security, and workman’s comp for regular employees. Independent Contractors are considered “self employed” or a “business” which means that the Independent Contractor has to pay both the Employers obligation and the employees obligation to taxes and the other standard payroll deductibles. Thus, the Independent Contractor is required to pay approximately 25% of his income to taxation.
In Uber’s opinion, you already had a car and a car loan before working with Uber, you will still have that obligation after working with Uber, so the costs of the car are not a factor when calculating the drivers income. Sounds like a 12 year old kid trying to justify not having to get a job and pay for his own obligations, doesn’t it. So to Uber, the fact that you are beating your car to death racing around City streets and to an early end of it’s life expectancy, is irrelevant as your car would be your car with or without your working with Uber.
Travis Kalanick said come run your own small business, be your own boss, you can make 5k per month working full time in San Francisco, and we will even help you buy a new car has proven to be little more than a trap to entice workers to join Uber’s workforce. Uber never said that the offer ends right after you commit to taking the job, And, Uber never even suggested that they were going to pull the rug out from beneath you repeatedly without concern for the impact on your family and your own obligations. To thwart driver’s claims of losses Uber has created “Guarantees” which are nothing more than a shell game, in which drivers have to work the hours, pick up the amount of riders, and other criteria making the driver eligible to be paid the amount of Ubers choosing regardless the amount the driver earns less.
How this works is Uber will guarantee the driver make $35.00 per hour if the driver works between the hours Uber requires, is on line in the app so much time per hour, makes at least one or more rider trips per hour, and has a 98% acceptance rate while working. However, not meeting every bit of the guarantee requirements allows Uber to rescind the guarantee. Doesn’t this type of control by an employer make the Independent Contractor an employee protected by the Fair Labor Standards Act and Uber obligated to compensate the driver as though an employee?
Anyway, back to the New Mexico Transportation Network Company Services Act on it’s way to being the rule for TNC Services in New Mexico. The New Mexico Transportation Network Company Services Act goes so far as to say that drivers are not allowed to collect CASH TIPS from riders, which means that Uber will never allow tips to provide an increase to the driver’s income. Instead Uber will add an average increase to driver the calculated anticipated driver income and use the increased income as the ability to reduce rider rates further in the future. The New Mexico Transportation Network Company Services Act and all similar documents should have required a Representative from the Drivers be part of the process and the requirement of setting the rates to be charged at a level that provides for fairness to the Rider, the Driver, and the Ride-Hail Services, limiting the amount of pay to the driver to at least minimum wage or higher as necessary for obligations such as expenses for the car and taxation. The negligence demonstrated by both Government and the Ride-Hail Services will likely have to be considered by the Courts in the near future. Until such time the jobs of 162,000 or more Drivers that once had worked worthwhile jobs created by Uber, will remain worthless jobs created by Uber.
As Independent Contractors, Drivers cannot unionize. But, they can join and be represented by a Professional Association in matters such as regulations and compensation. To provide this representation, the US Ride-Hail Driver’s Association is being formed but it is taking time to acquire membership as it is difficult to get the word out to all of the drivers with the limited funds the drivers have to invest into the development of the association with their current incomes barely adequate to cover their expenses to work.