KIN blog

How drivers engage with Uber across different regulatory structures

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A new study, ‘Regulated Dependence: Platform Workers’ Responses to New Forms of Organizing,’ by KIN Researchers, Jovana Karanovic and Hans Berends, and co-author, Yuval Engel, has recently been published in Journal of Management Studies.

The study analysed 36,531 posts from the popular online forum UberPeople.net across twelve US cities and one European city (London) to find out how Uber drivers respond to novel organizing solutions (e.g. rating system, algorithmic management etc.), and how such responses vary under different regulatory conditions.

In the study, cities were divided in two categories: directly regulated (e.g., New York and Miami) and indirectly regulated (e.g., San Francisco and Los Angeles), which Uber confirmed guides their decisions. In directly regulated cities, Transport Network Companies (TNCs), drivers and vehicles are all subject to regulation, while in indirect regulatory cities the regulations are imposed directly onto TNCs, who then enforce them on drivers and vehicles. This difference in the structure of regulation changes the power balance between Uber and its drivers.

Here is what the study finds:

(1) Drivers are more ‘cooperative’ and try to help Uber toward its ends in directly regulated cities (i.e. stricter regulations) such as New York, which tend to have higher entry barriers for both drivers (e.g., drug testing, high fees) and TNCs (e.g., high fees). For instance, they organize meet ups, invest considerable time in giving each other tips about best times to drive, cars to buy/lease etc.

Namely, once in the industry, drivers in direct regulatory structures become more dependent on Uber — not only to recoup invested time, effort and money that went into becoming a driver, but also due to a lack of alternative TNCs to switch to. This dependency between Uber and its drivers cuts both ways — Uber also depends more on drivers when their market entry is constrained, leaving them with a limited pool of potential workers. This creates an incentive for drivers to make things work. As one Uber driver says:

The meeting is ON! Starbucks 9500 Higgins Rd (Rosemont)… Going back and forth via our avatars is fun, but if we really want to figure out a way to collectively get our voices heard then we need to meet face to face… Drivers are obviously the backbone of these companies. Without us there is no Uber or Lyft. We are partners in this grand rideshare experiment and there are many things we can do to get our voices heard. I think we all want rideshare to succeed and I believe that as Partners we have valuable input which will help these organizations to that end. (Uber driver, Chicago, January, 2016)

(2) The mutual dependence between the drivers and Uber is weaker in indirectly regulatory cities such as San Francisco, and as such, drivers oppose Uber’s solutions more (e.g., rating system, earnings), attempt to ‘game the system’ (e.g. manipulating surge pricing), and engage in activities that are directly harmful for Uber (e.g. accepting tips when Uber did not allow it), more often than drivers in directly regulated cities.

Uber has a larger pool of drivers to draw upon and drivers usually have more alternatives to switch to. Even when regulations and policies seem to be universal, they can be deployed with more adverse consequences for drivers in indirectly regulated cities, which enables Uber to take advantage of the leeway provided by regulators. Therefore, in indirectly regulated cities the drivers’ disadvantaged position is aggravated. The frustration is seen from the following forum post:

That their full-time drivers are living hand-to-mouth? At least to this extent. For some reason, I get this weird feeling that they think their drivers are still doing well and that maybe they’re just that out of touch. Even though it’s more than likely that they both know and just don’t care, part of me doesn’t want to believe it. (Uber Driver, Los Angeles, October, 2016)

(3) In both regulatory structures, drivers supplement and oppose Uber’s organizing solutions. They go beyond the design intended by Uber — they inform each other directly of best places to drive, for instance, although Uber’s algorithm provides such information too. In this way drivers ‘fill in the gaps’ where Uber’s organizing solutions are unavailable or deemed insufficient. They also oppose Uber’s solutions (e.g. rating system; wages) by expressing frustration and disagreement or by engaging in active resistance.

Thus, for instance, in February 2016, when Uber did not have a tipping option, we saw drivers accepting tips regardless. As we observe, when drivers take matters into their own hands, it is often in a form of active resistance, which is more often the case in indirectly regulated cities.

I have adopted the TAG program. When pax [passengers] ask how I like driving for Uber I answer, “The wages are really low, but the tips are great.” I have signs posted in my car saying, “Tips are great. Tips gratefully accepted by cash or credit card” (I ordered a free Square Reader to process credit card tips if I ever get any) I have a cup in the centre console full of 5s and 1s. Visible from front or back seat. I never directly ask for a tip. And I am polite and give excellent service. (Uber Driver, San Francisco, February, 2016)

Open access available here: https://onlinelibrary.wiley.com/doi/abs/10.1111/joms.12577

Author: Jovana Karanovic