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why does Uber win
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well because it's rigged in their favor
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right in 2023 a law professor published
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a paper with shocking implications her
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research found that Tech firms like uber
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and Lyft were using secret algorithms to
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dictate what drivers earn based on
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factors we can't even see she called it
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algorithmic wage
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discrimination and this technology or
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revolution isn't restricted to ride
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share companies once that technology is
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in there they can raise prices on a hot
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summer day you know I want a lot of ice
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cream I want
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Lemonade they're running low they can
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raise the price the price of milk even
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your paycheck the very fabric of our
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economy all controlled by invisible and
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unaccountable
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algorithms so about a year ago I started
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reaching out to the
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companies they largely denied
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it only to contradict themselves a few
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months
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later then I reached out to the
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academics and one of the frustrating
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things was that the evidence seemed to
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be in the shadows a single study a hint
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in an earnings call a story from a
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driver it was mostly
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theoretical until a few months ago when
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I got an email from a guy I had
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published a video that argued Uber's
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Newfound profitability came at the
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expense of drivers and Riders he said we
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were at the tip of the iceberg so I
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called him we talked 3 weeks later I was
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on a flight to Los Angeles looking to
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settle the question one once and for all
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are ride share companies offering
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drivers different rates for the same
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work what I found put the legality of
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this whole Tech revolution in
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question they have broken every
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single local state federal law when it
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comes to labor when it comes to
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Transportation that's Sergio aedan he
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sent me the email he's an experienced
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driver and a senior contributor at the
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ride here guy an influential resource
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for Gig economy workers we were used to
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something called a rate car we were used
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to getting paid by time and distance
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then overnight the transparency vanished
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replaced by a secret algorithm that
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takes into account potentially hundreds
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of different variables they called it
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upfront
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pricing Uber's losses turned to profits
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around that same time
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coincidence I don't know lift followed
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suit and now they claim they're on the
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path to
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profitability the algorithms
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are set up in a
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way to charge the rider as much as it's
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possible and to pay the driver as little
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as possible a lot of drivers feel Uber
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and lft are paying different wages for
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the same rides but we don't really know
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because the companies they aren't
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talking we're doing a very simple thing
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we're picking up people point a to
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dropping off point B I shouldn't make
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less money than the next guy I should
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not but because it's not regulated
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because we don't have raid cards because
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we don't know what we're going to make
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trip to trip it's demoralizing It's
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upsetting so with Sergio's help we
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decided to test
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it we called seven experienced
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drivers to a hi traffic area in Los
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Angeles with the sole purpose of testing
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if ride Sher companies are paying
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different rates for the same rides at
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the start each driver will activate
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their screen capture software open up
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the app and place their phones on the
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table why the table Sergio has done
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similar experiments and the rate
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disparities were blamed on location
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differences when the experiments are
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done the drivers will send their screen
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recording to Sergio's team who will then
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sync and analyze the
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fairs and then we're going to see what's
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really going on
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[Music]
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he's getting paid a dollar more if he
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goes there according to the map and uh
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nobody else is nobody else is seeing
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that dollar
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surge we found that Uber offered the
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same rides 46 times to multiple drivers
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63% of the time one of the drivers was
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offered a bit less money for the exact
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same ride they want to make few pennies
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difference and few Pennies on 2.7
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billion trips a quarter which is from
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the last earnings report is millions
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hundreds of millions of dollars lift was
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even worse the price Gap wasn't just a
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little off it was a lot off we saw
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differences of up to $3 to4 after
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bonuses and drivers don't know why one
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person gets a bonus and another doesn't
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well that adds up like on 30 chips at 10
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bucks a day that's 300 bucks a month
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why should I get paid less 300 bucks a
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month than the other guy I contacted
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Uber and lft to see how they calculate
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fairs Lyft well they never responded
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Uber directed me to a blog post when I
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explained the experiment's results they
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replied by copying and pasting a portion
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of that same blog post the section
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outlines different reasons drivers could
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see different fairs but we controlled
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for everything that we could we called
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the drivers to the same space placed
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their phones inches apart had driver
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monitoring incoming promotions and
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constantly refreshing their screen the
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only thing we didn't account for was any
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secret test Uber could have been running
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at the time which we couldn't because
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the fair algorithm is secret and the
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test is secret there's a whole lot of
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questions here like mainly is this legal
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and there's no laws against algorithmic
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wage
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discrimination that article I mentioned
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at the start suggests that opaque
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algorithms can easily facilitate
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violations of anti-discrimination laws
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Uber denies this but their own research
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reveals a glaring disparity wom drivers
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earn 7% less than men potentially due to
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algorithmic wage
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setting but there's an argument that the
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entire business model is illegal from
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our perspective Uber's and lift's
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business model is based on control uh
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without responsibility that's David
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seigman he's the executive director of
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towards Justice a legal nonprofit that
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defends workers from corporate overreach
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in 2022 the organization helped lead a
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lawsuit on behalf of three ride shair
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drivers the lawsuit says if you are not
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an employer um subject to your and
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accountable to your workers under the
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labor laws then you are powerful firms
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that are abusing your power under State
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uh antitrust competition law and unfair
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and deceptive acent practices laws David
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is describing the cognitive dissidence
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rer operators have when classifying
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driver they want to have it both ways
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Uber and lift classifi drivers as
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independent contractors not employers a
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crucial
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distinction as an employee you're making
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money for someone else which means
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benefits protections and a boss who can
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tell you what time to show up but as an
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independent contractor you're supposedly
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making money for yourself with no
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benefits or protections but Freedom
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you're Your Own Boss if these drivers
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are as you say independent then they
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need to have true economic independence
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we allege that the companies have denied
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them that economic independence most
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importantly by taking away their uh
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their ability to set prices for
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themselves but right now Uber LIF set
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prices for Riders and wages for drivers
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to maximize one thing their own profits
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drivers are left out Uber and LIF are
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saying we're not one company right we're
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we're we're just a platform and all of
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our drivers uh are um Independent
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Business people
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under our antitrust laws they need to
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have the economic independence to set
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their own prices we heard something
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similar at our Roundtable discussion
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after the
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experiment every participant wanted to
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be an independent contractor they like
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the freedom they also want Uber and lift
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to treat them like actual independent
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contractors when I don't have a control
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over the pricing and you keep calling me
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an independent contractor there's
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something very wrong with that picture
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and for drivers dependent on the r your
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platforms to make a living it's hard
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when you're making under minimum wage
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especially for people that do this
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full-time in
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California they're working 70 to 80
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hours just to put food on the table
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which is really really rough if you look
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at who's on the board of both of these
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companies it tells you that we have
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nobody on our side right when the
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general Council of uber is Tony West and
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he's the brother-in-law of kamla Harris
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then then it tells you that these
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companies are tight with government why
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does Uber win well because it's rigged
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in their favor
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right there's a reality where drivers
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could be actual independent contractors
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set their own rates on these platforms
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and compete for your business but that's
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not our world yet instead the companies
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are spending hundreds of millions of
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dollars rewriting State labor law to
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reinforce the idea that drivers aren't
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employees while using the fine print to
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handle private challenges that's been
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absolutely essential to Uber's and
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lift's business model so well they've
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tried to race to write laws to their
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benefit they've also tried to protect
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themselves from public litigation
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through the fine print of their
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contracts and through arbitration
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clauses that's where David's case on
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behalf of the three drivers ended a
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superior court sent it to private
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arbitration the end result isn't public
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we should be also be clear about is just
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because you're exempt from laws
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governing you know for example
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unemployment insurance premiums that
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doesn't mean you're exempt from
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Anti-Trust laws and competition
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laws federal and state enforcers aren't
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subject to forced arbitration agreements
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they can investigate um and bring
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enforcement actions against these R
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share companies it's likely also a
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violation of state competition law
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especially in States like California
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that prohibit vertical price fixing so
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the California Attorney General's office
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would also be in a prime position to
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investigate the issue and bring an
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enforcement action like that
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one but this issue of algorithmic
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pricing stretches Beyond ride share
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we're just at the beginning stages of
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what I feel is like a battle between the
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common folk and then that manager class
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and upwards there's credible reporting
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that Walmart Amazon and McDonald's are
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all experimenting with the technology
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those companies employ over 3 million
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people in July the FTC announced it was
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investigating surveillance pricing
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that's the practice of companies using
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complex algorithms and Untold data
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points to offer personalized pricing the
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fear is that prices for something like
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Children's Tylenol will suddenly
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Skyrocket across major online stores
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just because you typed infant fever into
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Google why because retailers know you're
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desperate the FDC is investigating
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Walmart Amazon and the leading
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technology vendors we need to do the
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same thing but for wages the power of
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these Giants lies in their ability to
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keep everyone consumer
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drivers Regulators blindfolded they're
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backed by billions of dollars worth of
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sophisticated algorithms and legal
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gymnastics leaving us to fight in the
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dark maybe there's an innocent
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explanation to our Fair experiment but
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we won't know until the federal
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government shines a
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light thanks for watching be sure to
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like And subscribe to our Channel if you
00:11:53
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00:11:54
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