Four United Kingdom Uber drivers launched a lawsuit Monday to gain access to Uber’s algorithms through Europe’s General Data Protection Regulation (GDPR) in a bid that could reshape the gig economy landscape across Europe.
Central to the argument here is that the drivers—and the UK App Drivers and Couriers Union—are arguing that the GDPR allows for them to see the troves of data Uber extracts and accumulates on them, in addition to how that data is fed into Uber’s system of algorithmic overseers that manages and control drivers more tightly than human bosses could ever hope to.
Under the GDPR, individuals have a right to access personal data held by any company, in this case drivers are arguing that refusal to share time spent logged on and GDPR data obscured the “dead mileage” or miles driven in between trips without pay—such data would be essential to calculate an accurate hourly wage, but likely reveal how low Uber’s actual pay was. In combination with other data such as trip ratings, drivers might also be able to get a better idea of why they were deactivated on the platform—Uber, for years, has come under fire for seemingly arbitrary reasons without due process because they are contractors, not employees.
The case is being heard in Amsterdam which, ironically enough, was once the crown jewel of Uber’s “Double Dutch” tax evasion strategy that created Dutch entities with no employees to transfer revenues to tax havens. Recent regulatory crackdowns have pushed Uber to end Double Dutch.
The information asymmetry that allows Uber to selectively share data in forms that paint it in a favorable light—usually by obscuring negative outcomes like “dead mileage” or arbitrary deactivation—also go a long way towards allowing it to construct narratives that justify a friendly regulatory environment. Facing the threat of a new Seattle law that would require ride-hailing companies to pay their drivers a minimum wage, on July 6th Uber and Lyft revealed a Cornell study claiming drivers earned $23.25 an hour after expenses. That same day, economists James A. Parrott and Michael Reich (who, in 2018, studied the wages of New York City’s ride-hail drivers) had published their own study showing drivers on average made $9.73 an hour after expenses. A comparison of the Cornell study to theirs that highlighted numerous flaws in the former, including the way over-reliance on selectively shared Uber and Lyft data distorted how driver expenses were estimated.
This gets to another case heard Tuesday that some of the plaintiffs in this GDPR case are involved in: whether UK Uber drivers are Uber employees or self-employed. This case has been in the courts since 2016 when a tribunal ruled that former drivers James Farrar and Yaseen Aslam were indeed employees and entitled to holiday pay, paid rest breaks, and a minimum wage (opening up room to make claims of wage theft). The tribunal upheld its decision in 2017, Uber lost an appeal in 2018, and has now filed one last appeal with the UK’s Supreme Court. Such a ruling would open Uber up to wage claims from tens of thousands of drivers in the United Kingdom. To put this into perspective, in California, just 4,000 Uber and Lyft drivers have filed lost wage claims in excess of $1 billion.
All of this looks like it would be—to put it gently—a devastating blow to a company that has already lost its license to operate in the city of London, its largest European market and one of its five largest global markets. The same extends to its competitors (which means Lyft in the U.S.) as there are now lawsuits being brought by two U.S. Attorney Generals demanding driver reclassification in California and Massachusetts.
Uber (and Lyft) need to misclassify their drivers for the same reason they need to be able to have total control over extracted and accumulated data on drivers (and riders): it’s how they can unilaterally increase prices, reduce labor rates, extract more fees, and otherwise construct an on-paper path to profitability. It’s how they survive—how they justify never once earning a profit and burning tens of billions of other people’s money on whatever it is they’re pursuing.
This is why in New York City, both Uber and Lyft created an immoral lockout system that on-paper adhered to the minimum wage laws but forced drivers to sleep in their cars to meet harsh quotas or risk getting “locked out” and losing their primary source of income. This is why Uber has, for years, used PR and political propaganda that traces back to the 1990s fight over whether the taxi industry should be deregulated and emphasizes things like “consumer welfare” (even as it increases pollution or traffic accidents) or “mobility” even as it helps strangle public transit. The extreme lengths betray just how desperate things are for these companies.
The EU decision, the UK Supreme Court decision, and the US lawsuits all have the potential to undermine a key plank of Uber’s business model: exploitation. Once you strip away the ability of an Uber or Lyft to misclassify drivers or shield data from public eyes, you start to see it for what it is. App-based ride-hailing companies are glorified taxi companies that exploited venture capitalists to gain billions more in funding than their competitors, exploited drivers and consumers with subsidies and psychology tricks to achieve mass adoption, exploited weak labor regulations and consumer protections to cut costs (wages) and increase revenues (fees, prices), then obscured what was going on behind the self-adopted label of “tech company,” an app, and a host of secret algorithms. These legal challenges are a step in the right direction to end that widespread exploitation, reverse its damage, and start rebuilding a (public) transit system that prioritizes those who use it (and operate it) over those who dream of owning it and making billions off of it.