For many the sharing economy has provided a highly needed boost of income. The ride sharing giant, Uber Technologies, in particular has been in the center of attention. By the end of 2015 Uber more 330,000 drivers under its wing in the United States alone. By now the number is closer to 400,000. When you have so many people working as independent contractors, which shifts liabilities from the company to the driver, disagreements are expected.
Uber recently settled a lawsuit by drivers for $100 million. The goal of the lawsuit was to reclassify Uber drivers as full time workers, which will give them the rights to demand benefits from the company. Uber paid the $100 million, but the decision of the court what that Uber drivers will not be classified as employees of Uber, and will not be allowed to unionize.
$100 million may sound like a significant settlement, but most of the sum will divided between 385,000 drivers. When all is said and done, the settlement is equivalent to approximately $218 per driver.
Senator Elizabeth Warren gave a speech on Thursday where she explained why the sharing economy, or the ‘gig economy’ as she called it, is not beneficial to most, “The much-touted virtues of flexibility, independence, and creativity offered by gig work might be true for some workers under some conditions, but for many, the gig economy is simply the next step in a losing effort to build some economic security in a world where all the benefits are floating to the top 10%.”
Warren’s statements reinforce what economists were pointing out, what fuels the sharing economy is not trust or the desire to share, it’s desperation.
Senator Warren then focused her attention on Uber and Lyft, “While their businesses provide workers with great flexibility, companies like Lyft and Uber have often resisted the efforts of those same workers to access a greater share of the wealth generated from their work. Their business model is, in part, dependent on extremely low wages for drivers.”
There have been several lawsuits against Uber, and more undoubtedly will come. Uber however, is working on a solution, self-driving cars. Uber is currently working on a plan to launch the first autonomous vehicles by 2020.