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Uber’s founding rhetoric of being the harbinger of a new “sharing economy” bears very little resemblance to how its system has actually evolved, at least in South Africa.
While there are Uber drivers who drive their own cars, in its heads of argument at the Commission for Conciliation, Mediation and Arbitration (CCMA), Uber pointed out that in South Africa “most” of the drivers do not own the vehicles they use for work.
Some local “partners” have poured millions of rands into fleets and there is a frenetic labour market at work where drivers compete for what have become known as “slots”.
Most drivers tend to move from one partner to another, said Uber. This matters because the company argues that drivers are often employed by these partners, hence not Uber.
The drivers’ counter argument is that the partners have no power over a driver’s deactivation. If deactivation is tantamount to dismissal, it follows that partners are not employers.
“It is impossible for an Uber driver to make money,” said Joseph Munzvenga of the Cape Town Uber Drivers’ Guild.
In practice, the economics of Uber revolve around vehicle finance and the requirement that all cars on the system be, at most, four years old. This sets the minimum to be earned along with the set fare rate of R7/km of which Uber takes 25%.
“I don’t know anyone from Khayelitsha or Langa who can afford a car less than four years old,” said Munzvenga.
“The vehicle finance deals are all for R12 000 per month. You do 7 000km a month, imagine after four years ... there is no resale value,” said Munzvenga.
“I am driving other people’s cars and making them rich. They go buy 50 cars, allocate them to poor black people and set unreasonable targets.”
GOING LARGE
One of the drivers in the case worked for a particularly large Uber partner called Osier Property.
According to Uber, the company had 75 Uber drivers driving its cars. Osier met a nasty end after business rescue proceedings ended in liquidation last year.
“The business model was not profitable,” notes a business rescue report.
At that point the company owed Standard Bank and FNB a collective R7.55m in vehicle loans.
Avis was owed R3.5m and BMW Financial Services was owed almost another million.
Included in the papers at the CCMA are employment contracts and payslips from Osier that show drivers were paid R20 per hour to drive for the company.
The wage rate would rise by an unspecified margin over time, but would still be a wage unrelated to the actual fares earned by the driver.
It is impossible to say how commonplace Osier-sized partners are because Uber never shares any operational information. It won’t say how many Uber drivers or partners there are in South Africa. It also won’t say how many vehicles are registered on the system.
The only thing it will say is that it “enabled over 4 000 economic opportunities”, which would be most reasonably interpreted to mean there have been about 4 000 drivers since inception, including those who were deactivated or simply left.
Munzvenga used to drive for an Uber partner who had three drivers at the time.
In the early days after Uber appeared in South Africa, drivers could do fairly well, he admits.
“Then they saturated the market and you end up sitting around waiting for hours. There are too many cars. Many people now do 140 hours a week.”
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