How do you know when you’re being underpaid? Uber drivers in NYC probably wished they knew the answer three years ago. The ridesharing application recently came out and admitted they “accidentally” underpaid drivers for three years, which, for the US’s largest city, comes as an estimated deficit of $45 million.
“The ride-hailing company said it had ‘mistakenly’ over-calculated its cut of commission, taking roughly 25 percent from fares before taxes, when it was supposed to do so after local taxes and fees as stated in a driver’s agreement in November 2014,” reads an article by The Verge.
As opposed to calculating loss per driver, the app will refund drivers $900 each, assuming they’ve driven since signing a 2014 agreement. While a generous refund for some — drivers who made a few trips and decided the gig wasn’t for them — those who’ve been loyal and consistent drivers may still be getting cheated.
Knowledge is power, and in this case, power is a paycheck. Those who commit to working in the gig economy should proactively arm themselves with the knowledge of how much they should be making so they know when to raise a red flag. Ideally, a company would be honest and pay their employees fairly. But in the event they’re not, these tips should help employees get paid their due.
Understanding Cost Calculation
Every gig should have an algorithm that determines individual profit. Ridesharing apps will often have a base fare with additional fare determined by mile distance. Surge pricing is added on due to increased demand, such as during a holiday or surrounding large events.
Gig-based employees should know how their employer (the app) determines employee profits versus employer profits. Try and get clarity on whether employee and client receive the same price for a service. For example, does an Uber driver see the same price a rider sees when they accept a ride?
This information should come straight from the employer, as the employee-employer relationship should be a transparent one. (For example, TaskRabbit’s support page explains their cost calculations here.) If an employee feels as though they aren’t receiving the full story, they could — with discretion — ask clients to verify their cost for consistency.
For non-ridesharing gigs such as dog-walking and completing favors, calculations should be more upfront. Regardless, be sure to understand the distribution of profit.
Try Not to Be the Only One in Your Corner
One bittersweet aspect to working gigs is the ability to do so independently. On the one hand, there is no navigating awkward co-worker relationships or answering to a boss who’s constantly peering over your shoulder. On the other hand, there’s also no one with whom to stand around the water cooler and echo parallel issues or offer advice.
If you work a gig job, try and find others who are in the same boat. If there isn’t anyone in your immediate friend group, reach out through social media or online forums. Uber has its own driver-focused web forum that features blogs and advice aimed at helping make an isolated occupation feel more like a community.
Keep Diligent Records
In a gig-based job, you are your own best advocate. There is no salaried amount the company has agreed to pay and you’ve agreed to accept. The gimmick is that you are in control of earnings because you choose when you work and for how long.
It is in your own best interest to keep organized, detailed records of your earnings. Understand what you’re spending — gas to show up to complete a favor, vehicle wear and tear for a ridesharing job — in relation to profits. This will not only help you pay bills, but also provide insurance in the event of foul play.
The popularity of app-run gig jobs is fairly new, and initial participants couldn’t have predicted needing to be defensive about their earnings. Although many of the apps have been known to pay workers their due, rights and best practices for these types of non-contracted jobs are still in the development stage. Until such things have been established, workers should take precautions to self-protect and ensure they’re justly compensated for their hard work.