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: As Uber drivers complain of deactivations and ‘policies that keep us in poverty,’ company issues its own civil-rights audit

Uber Technologies Inc. released its civil-rights audit on Friday, an outside review it agreed to undergo last year after pressure from shareholders, to mixed reactions.

Shareholder groups had submitted a proposal expressing concerns about the effects of Uber’s policies and practices on the civil rights of all stakeholders in the giant app-based platform — drivers, riders, employees and communities. The groups, which withdrew the proposal after the company agreed to the audit, said some of the ride-hailing giant’s policies and actions, including its “misclassification of independent contractors [that] has been found to disproportionately affect racial minorities,” seemed contradictory to the company’s stated commitments to be anti-racist.

Uber UBER, -1.55%, like other app-based gig companies, treats its drivers and couriers as independent contractors and has fought to change labor laws around the nation and world as it tries to keep from having to classify its workers as employees.

Other shareholder concerns included: inadequate disclosure around sexual assaults on the platform; research that found evidence of racial discrimination in the company’s pricing algorithm; a lack of diversity in Uber’s leadership; and more.

The shareholder group that led the push for the audit expressed optimism that it would lead to some changes, but pointed out lack of specifics in some areas. Others called attention to some glaring omissions.

Tejal Patel, executive director of SOC Investment Group, which led the investor groups that pushed for the audit, on Friday called the audit “just a snapshot.” Patel said the audit contained some good recommendations — such as consolidating the company’s equity and fairness into a team — but did not delve deeply enough into some important issues, including the effects of Uber’s business model and its efforts to continue to treat its drivers as independent contractors.

“The issue of misclassification is an undercurrent throughout the report,” Patel said. “They brought up Proposition 22 [the voter-approved law in California that allows gig companies to avoid classifying its drivers and couriers as employees but offers them some benefits], but there’s no analysis of how these policies are affecting protected classes.” She added that under the law, for example, drivers are eligible for optional occupational-accident insurance, but there’s no mention of cost or how many drivers have actually opted in.

Veena Dubal, law professor at UC Irvine whose research focuses on law, technology and work, said Friday that the audit “is a great example of how company-paid-for audits will never address the real issues.”

“While it evaluates executive compensation in relationship to [diversity, equity and inclusion] goals, it completely ignores the most pressing civil rights emergency created by Uber,” Dubal said. “The workers who create the company’s profits — the drivers — are majority Black, immigrants and other workers of color. Uber’s business model ensures that they are paid low, erratic and unpredictable wages.  How can you investigate Uber’s efforts to promote civil rights and DEI and ignore this central fact?”

According to the audit, Uber estimates that 49% of U.S. drivers and couriers on its platform are white, which would mean that a majority of them are people of color. Uber has said that the median hourly earnings of U.S. drivers is $34, including tips.

But worker-group estimates and other studies have shown that earnings of drivers are much lower — less than minimum wage —- when the expenses they incur, such as fuel, vehicle maintenance and other costs, are taken into account. “The ‘audits’ that consumers, investors and regulators need to be paying attention to are the hundreds of independent academic studies from all over the world that reveal the dangers and precarities of Uber work for migrant and racial-minority workers,” Dubal said.

“It should not be lost on people that people of color and immigrants are the majority of Uber drivers,” said Daryush Khodadadi-Mobarakeh, worker leader with the California Gig Workers Union, on Friday. “Uber actively pursues policies that keep us in poverty and prevent us from having a voice on the job and a seat at the table. If Uber wants to address the issues we face daily adequately, management will meet with us.”

Uber spokesperson Noah Edwardsen did not address MarketWatch’s questions about criticisms of the audit on Friday, saying only that “the assessment highlights many existing strengths, including expanding access to mobility options and the establishment of our Marketplace Fairness and Product Equity teams. It also offers recommendations to further improve.”

The audit mentions a widespread issue among Uber drivers, which is deactivations— or getting kicked off the platform and being unable to earn either temporarily or permanently. The issue has affected platform workers so much that cities and states have proposed or adopted ordinances and laws that try to address it.

“Some drivers have suggested that the deactivation process has had a disparate impact on drivers of color,” said the audit, which mentioned that the company has “a global team that governs and oversees the deactivation process, including an established team to review deactivation appeals.”

“Uber is in the process of reviewing and evaluating its deactivation policies to help improve the experience for drivers, including drivers of color,” the audit also said.

From our archives (April 2023): Uber drivers say they’re ‘totally dependent’ on their income — but risk being deactivated at any time

“Many of us have experienced temporary or permanent bans from driving inexplicably and without warning,” said Khodadadi-Mobarakeh of the Gig Workers Union. “We have no process to appeal these bans, and often we have no knowledge that we have even received notice of our deactivation until after the fact.”

Edwardsen did not respond to several specific questions about deactivations and the other driver-related issues and recommendations in the audit, including about a timeline for addressing them. “Where appropriate we’ll work to implement recommendations immediately, and a working group will be established to assess the remaining recommendations and work on implementation,” he said.

The audit, conducted by former U.S. Attorney General Eric Holder and the law firm he now works for, Covington & Burling, offers several recommendations related to the civil rights of Uber drivers and couriers, who make up the overwhelming majority of the workers central to the company’s business. In the United States, Uber has more than 1 million drivers and couriers, and about 11,000 corporate employees, according to the civil-rights audit, which focused on the company’s U.S. business.

Covington & Burling did not immediately respond to a request for comment.

Among the other driver-focused recommendations in the audit:

  • Develop a strategy to address safety concerns of drivers, including drivers of color.
  • Adding a member to Uber’s safety-advisory board who is focused on platform-worker health and safety.
  • “Enhancing” communications with drivers, including those on the Uber Crew, which is a group of drivers chosen to represent drivers’ concerns each year but doesn’t have direct engagement with the company.

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