This report discusses how Uber company uses Gig economy workers for the working of the company. It will highlight the use of freelance economy by the company and how they maximise their profit without investment and use of flexible working hour employees. It introduces us to the working of gig economy, how companies gets advantage and disadvantaged by it. This will also cover how these kind of workers are adjusted with the full time working employees in the company. It also includes the comparison of Gig economy in my home country, India that with Australia. The company Uber works both in India and Australia and will be great way of comparison between both the countries and how Gig economy issue is being tackled in India. It also discusses how effective the practices of the company really are and what the innovation and practices they can include into the working and inclusion of Gig economy workers. It covers up the recent research and how more people are driving towards the gig economy and flexible work culture. The effect this kind of company and arranging flexible human force by one company effecting the other companies.
The ‘Gig Economy’ is new form of economics system which has challenged the traditional economic system of working for 9 to 5 jobs. This has been a challenge to labour management methods and the human resource department of the companies. The workers have increasingly wanted to have flexibility in work and work for companies or people by task to task basis and the projects they want to. In countries like the UK and USA, the number of people classifying themselves as self-employed is rapidly growing (Bureau of Labour Statistics, 2014; Office for National Statistics, 2014). The basis and the uplifiting force of the gig economy is digital platforms and the internet connectivity. Other words used for gig economy workers can be freelancers. There are several examples of Gig economy like Airbnb included in residential sector replacing the hotels, food delivery services like Uber eats , Zomato and Swiggy (India) , cab services like Uber and Ola. This report will focus on the working of Uber and its labour management by the company reason being its wide reach internationally setting up an example for Gig economy.
WORKING OF UBER
Uber was started in 2009 replacing the traditional taxi services by Travis Kalanick and Garrett Camp. (Fall 2016 Sanders & Pattison) Today Uber works as an application which connects drivers and riders for them to reach a particular destination. This way uber provide drivers with a platform to work and they work according to their convenience. Starting up as a taxi service which provides luxury car services has now moved to more affordable cars and also allows cab sharing. Uber receives twenty percent of the total fare. Uber controls the driver working under the company through different means by age limit, model of the car used in particular services.
INDEPENDENT CONTRACTOR VS. EMPLOYEE STATUS
There are different ways to classify if the worker is an employee or an independent contractor, this classification is important and needed to be done by the human resource department for clarification of workers, employers and most importantly governmental bodies.(David Bauer, 2015) It becomes important for managing the human resources because of the government regulation government regulations such as labor laws, employment discrimination regulations, workers’ compensation and social security requirements. (Fall 2016 Sanders & Pattison) Uber doesn’t require it workers to have specific working hours they can choose the working hours they want to , they are not even subjected to have a dress code and have to use their own vehicle for the cab services they provide to riders.
If Uber considered all of its ‘‘active drivers’’ as employees, it would be the 4th largest employer in the United States behind only the Federal Government, Walmart, and McDonald but it considers them independent contractors instead. (Chief Advisor and Board Member David Plouffe 2015) There are no advantages provided by the company to the drivers and this is understood to them. They don’t have any direct contacts with the manager.
PROBLEMS FACED
Uber driver in many areas have to considered as employees as they have to get the quality check of the vehicle they are using. Uber’s software algorithm and quality control standards determine compensation and conditions of employment. (Welcome to the Gig Economy, Austin Zwick, 2017). Rogers (2016) argues that Gig Economy workers do not neatly fit into either category, but because the ‘‘unequal bargaining power’’ between the two—they ought to be classified as employees. Uber has been ordered to pay the national minimum wage and offer benefits, including paid time off. Uber is appealing the verdict by arguing that this does not adequately portray the working relationship between the company and its drivers. (DONALD E. SANDERS & PATRICIA PATTISON, 2016). Given Uber’s valuation at a possible $65 billion or more, any major change in its business method holds the real danger of harming its growth and market position.(Kristen V. Brown, 2016). Also facing crisis in different countries relate to their employment laws even in Qubec, Canada. The other taxi drivers want same laws and regulation for uber drivers as for them. (Wier, Marcel Vander,2017)
Various questions arise regarding how to manage and engage temporary labour effectively:
How to sift through the ever-growing talent pool of freelancers to locate the best talent?
How can companies ensure that freelancers actually have the expertise required? How to ensure the right talent is working on the right tasks at the right time?
How much compensation should freelancers receive?
How to ensure freelancers are well-versed with company culture, mission, values, history, challenges and procedures?
How to strike a balance of protecting company security systems and granting enough access to freelancers to perform their duties?
How much training and induction should be provided to a freelancer?
How can companies ensure coherence amongst staff with geographically scattered workers?
Who will have the ultimate decision-making authority, and how will command chains be structured? (Jeff Leventhal, 2012)
HUMAN RESOURCE MANAGEMENT IN UBER
As companies, like Uber begin to introduce freelancers to their workforce, they required increased capabilities to manage them effectively. Talent should be viewed as a strategic investment and like any investment there was a plan in place to engage and measure it to determine a path for future improvement of the company. (DONALD E. SANDERS & PATRICIA PATTISON, 2016).
They successfully use technological innovation to
(a) undermine employment laws and other regulation,
(b) transfer risk from the industry onto the individual driver,
(c) lower wage and labor standards of the industry in the name of competition, which drives up profitability of the firm (Welcome to the Gig
Economy, Austin Zwick, 2017)
One of those at the forefront is Work Market, a platform that manages the entire lifecycle of freelancers and independent professionals, including sourcing, verifying, engaging, managing, paying and rating them. Co-founder of Work Market, Jeff Leventhal believes that freelance management departments will emerge as part of a broader HR function(The Emergence of the Gig Economy, 2016) Uber appears to be a effective model. However, it is upon passengers using the app to pay Uber, not the driver. Uber then pays the driver gross. Most people prefer to be paid gross(, so it is an excellent way for Uber to attract drivers and save on employer National Income Contributions (NICs) too. (Marlowe, Adrian,2017)
There is constant conflict weather the drivers working under are freelancers or the employees of the Uber. While Uber considers them as independent contractors, the legal jurisdiction wants them to have the working rights of employees.
CONCLUSION
While Uber created a successful story under the working of new economy, Gig economy. It has given flexible working employment to a large range of people and has created a great market space and is growing rapidly with huge profits, it has lot of lope holes with the employment strategies, weather they are actual individual contractors or the employees of the Uber company. They have a background check and the vehicle they are using and the company has to be responsible as they are providing work to the drivers and further paying them the gross. Gig is currently being considered within two industry reviews. If, as a result, new methods are to be carved out with special rules in the name of modernisation, to avoid ‘curtains for Uber’, then let us in the recruitment industry have some special treatment too. After all, we invented the fl exible workforce, and it is hard-working, regulated agencies that need the government’s support, to change its approach and simplify the rules applying to them. (Marlowe, Adrian,2017)
REFERENCES
The Uber case: a blow to the gig economy, Nov 5, 2016, https://gateway.library.qut.edu.au/login?url=https://search-proquestcom.ezp01.library.qut.edu.au/docview/1848081124?accountid=13380
Welcome to the Gig Economy: neoliberal industrial relations and the case of Uber , Austin Zwick , https://link-springer- com.ezp01.library.qut.edu.au/content/pdf/10.1007/s10708-017-9793-8.pdf
WORKER CHARACTERIZATION IN A GIG ECONOMY VIEWED THROUGH AN UBER CENTRIC LENS, DONALD E. SANDERS & PATRICIA PATTISON , https://search-proquest-com.ezp01.library.qut.edu.au/docview/1860277041/fulltextPDF/22B48F342BD84716PQ/1?accountid=13380
Uber reflects challenges of gig economy , Author-Wier, Marcel Vander , https://search-proquest- com.ezp01.library.qut.edu.au/docview/1992262757/fulltextPDF/95135BC5A45946EEPQ/1?accountid=13380
The Emergence of the Gig Economy Thought Leader Paper: Education & Training Policy Team, file:///C:/Users/Pinaca/Downloads/sub30%20Aust%20Industry%20Group_attach1_Gig%20Economy.pdf
How much would it cost Uber to make drivers employees? , Kristen V. Brown , https://splinternews.com/how-much-would-it-cost- uber-to-make-drivers-employees-1793848516