Hollywood star Ashton Kutcher’s recent Facebook post defending Uber from New York Mayor Bill de Blasio’s recent attempts to regulate the company went viral this week, and for good reason. De Blasio, who has received numerous campaign donations from taxi companies, claimed that Uber cars were congesting New York streets and causing more pollution, although he failed to produce evidence for either claim. Yet, a public backlash forced de Blasio to back off, at least for now.
The reason that Uber has grown 400 percent from 2013 to 2014 is not just because it provides consumers with cheaper and easier alternate to the traditional taxicab, but it also offers drivers a flexible and easy way to earn some extra income. Indeed, most Uber drivers use the ride share service as a part-time job for supplemental income; only 19 percent of Uber drivers spend more than 35 hours on the road.
One of Uber’s most attractive aspects of is the flexible hours and the freedom it provides. Uber drivers can work whenever they want using their own car. Some taxi drivers rent a car from the taxi company for a fee of $75 to $100 per day. On average, Uber drivers make $19.04 per hour, while taxi drivers make a measly median wage of $10.97 per hour.
Another key advantage is that Uber has the ability to maintain the quality of customers the drivers will serve. Each Uber customer has a personal profile on the Uber app and drivers rate their customers, just like riders rate their drivers. Uber drivers have a better workplace environment because of this feature.
It is precisely this flexibility and independence that irks some politicians.
Hillary Clinton recently bashed Uber for not providing benefits like health insurance, paid vacation, and family leave. Yet for most Uber drivers, the service provides a secondary income, meaning that many have health insurance through a full-time job (86 percent of full-time jobs in the private sector provide health insurance). Even for those for whom Uber is a primary source of income, it’s a freely chosen alternative; Uber drivers can quit or reduce their hours on the road any time they want.
It also irks Washington bureaucrats, like David Weil, administrator of the Department of Labor’s (DOL) Wage and Hour Division. Recently, Weil issued a memo, stating the DOL’s attempt to redefine contractors as employees because of “economic realities”—a vague, case-by-case definition that will make it hard for companies like Uber to do business because of the lack of a clear line between contractor and employee. If Uber has to become liable for employee benefits like overtime, it will lose much the flexibility its business model depends on. If the DOL enforces this muddied definition of a contractor, thousands of Uber drivers will be left idle and consumers will lose access to a cheaper, more efficient way to travel.
The reason liberal politicians are going after Uber is that they want to make it—and other businesses—easier to unionize. That translates to more union dues and more union campaign contributions (labor unions hold nine spots on the list of the top 20 political contributors in 2014). As for the effect on the workers, a 2014 CEI study shows that unionization actually lowers workers’ wages by about 15 percent.
Let the people decide. If Uber is really as bad as Hillary Clinton and Bill de Blasio say, it will lose both drivers and customers and go broke on its own