Uber offers to pay for drivers’ health insurance, and then yanks it away

Photo by: Lindsey Nicholson/Education Images/Universal Images Group via Getty Images

Uber mistakenly sent out an email to some of its drivers and delivery workers last month offering to cover some of their health insurance costs — only to revoke the offer two weeks later.

On May 26th, an email from Uber with the enticing subject line “It’s a great time to get health coverage” appeared in the inbox of an unspecified number of the company’s drivers and delivery workers. When they opened the email, they were greeted by an even more alluring proposition: “Uber can help cover your healthcare costs.”

Drivers and couriers for Uber are classified as independent contractors, making them ineligible for employer-sponsored health insurance plans. For years, many of these workers have lobbied for more benefits and protections, only to face strong opposition from Uber.

So one can only imagine the shock from drivers who opened this email and saw an offer for subsidies ranging from $613.77 to $1,277.54, depending on the type of insurance plan they had and the amount of hours they worked each week. That kind of money could be transformative for drivers, many of whom subsist on poverty-level wages and are struggling to find work amid a steep drop in demand during the pandemic. What could account for this radical change in position by Uber?

The May 26th email promising health insurance subsidies.
The June 9th email revoking those subsidies.

As it turns out, nothing has changed. Uber intended only to send the email to drivers and delivery workers in California, and not any other state. “Unfortunately, we made a mistake sending this email to you, as this policy only applies to drivers and delivery people in California,” the email to one driver read. “We sincerely apologize for this error.”

A spokesperson said that the company’s support team is working with drivers and delivery workers who received the email by mistake.

Last year, Uber — along with Lyft, DoorDash, and other gig economy companies — poured over $200 million into the “Yes on 22” campaign to exempt them from a California state law that would require them to treat their workers like employees. The companies aggressively opposed the law, arguing it would eliminate driver flexibility, while also increasing consumer prices and wait times. The measure passed in November 2020 with 59 percent of the vote.

Under Prop 22, Uber and other gig work companies are required to “provide healthcare subsidies equal to 41 percent the average [California Coverage] premium for each month” for drivers and couriers “who average between 15 and 25 hours per week of engaged time.” This would explain the email, but doesn’t explain why it also ended up in the inboxes of drivers and couriers who don’t reside in California.

Edward Burmila, a political science professor who lives in Raleigh, NC and occasionally drives for Uber, received the original email about healthcare subsidies. “I may be an atypical Uber driver — I have a PhD and so tend to think of these things in a political context — but it is part of the ludicrous song-and-dance the ride-share companies are always doing to maintain the fiction that their labor force are not employees or workers,” Burmila wrote to The Verge in an email.

He added, “It also demonstrates that they’ll provide benefits — for riders or for passengers — only when they are forced to.”

Comments

Now all states need similar laws to CA to force them to not abuse their EMPLOYEES

US labour laws are just broken. This is inhumane.

Have you ever spoken to an Uber driver and asked their opinion? I take Uber occasionally and many drivers I’ve talked to said they started doing Uber part time and then quit their fulltime job because they love the flexibility that Uber provides. There is more to life than just wages and benefits. If the drivers like driving for Uber and it pays enough to satisfy them then who are you to judge? There is currently a worker shortage in this country so if Uber drivers wanted to find a traditional job with wages and benefits they could, but many choose to drive for Uber (or other similar services) because they don’t want a traditional job. Some people just can’t wrap their heads around that.

Nothing stops an employer from offering flexible work schedules or part time work. Flexibility is not dependent on being a contractor.

Despite how little Uber pays drivers. They still lose money. Just a horrible company.

Doesn’t that just prove that the business model doesn’t work? Where is the money going to come from to pay higher wages and benefits, without significantly raising prices for customers? And if that happens, many will start to reconsider using rideshare services at all, leading to fewer available jobs for drivers. I think this is going to happen regardless when you look at how many people are leaving cities these days to live in car-dependent suburbs. Uber will be reduced to something that resembles a traditional taxi company with the same business model and rates and everything will go back to square one.

Exactly. The business model doesn’t work. People use Uber for 2 reasons, it’s cheap and it’s convenient. It’s cheap because they don’t pay drivers enough and they subsidize the price of the ride. It’s convenient because they have so many drivers willing to work for those "poverty" wages.

Nothing about it is sustainable. I don’t think it’s a secret that their ultimate goal is to transition to a driverless fleet after building their brand on the backs of people willing to put up with their crap. The problem is that it’s taking longer than they expected.

It’s like taxis, whatever downsides they had, charged those prices because that’s how much it costs to move people around.

I don’t think it’s a secret that their ultimate goal is to transition to a driverless fleet after building their brand on the backs of people willing to put up with their crap. The problem is that it’s taking longer than they expected.

No, they were never going to be profitable with self driving, even if that wasn’t decades away, they couldn’t even break a profit when they abused their drivers by making them pay for all the car costs. How would it be cheaper to buy and run a fleet of robocars?

Their actual end goal was to become a monopoly after illegally destroying the existing market, then jack their prices up. Unfortunately, they weren’t smart enough to realise they making a rideshare app is actually easy and has no lock in for customers OR drivers, so a dozen other companies came in and ate their lunch.

Currently Uber’s business involves shifting money from dumb investors into executives pockets, at the cost of their drivers.

A spokesperson said that the company’s support team is working with drivers and delivery workers who received the email by mistake.

"Working with" is a laughable phrase. Here it means telling drivers they can f—- off until Uber is forced to help them by law.

Didn’t Uber abandon their goal of having robo taxis? What is keeping them in business? I know investors were dealing with them bleeding out with the hopes of robo taxis down the road, but what about now?

It was always so dumb. Even if the technology was there for robo taxis there was no reason to think that Uber would benefit from them. Unless they were the only company that had self-driving cars which was never ever going to happen.

Seems like a case where executives made millions, customers got a decade of cheap rides, and the drivers got screwed.

Uber’s rides business has been profitable every quarter for the past 1.5 years.

Because they don’t pay the same as a real taxi. Anyone can be profitable eventually if you don’t confirm to the same rules as your competitors.
McJobs are not real jobs

Uber’s rides business has been profitable every quarter for the past 1.5 years.

So they made no profit whatsoever BEFORE Covid, and now you claim they are profitable DURING Covid?

Uber has never made a profit.

I think he’s saying the rideshare division is profitable.

I think they abandoned their in-house development efforts. I don’t think they ever said they were going to stick with humans forever

I make good money doing Uber eats 1100-1500 a week plus I get the health stipend 1200 extra every 3 months the pay in CA isn’t bad plus I drive a EV no spending money on gas lots of free charge stations were I live

That’s awesome. I drive an EV and do it part time for some extra cash.

We’re sorry… sorry!

The price of a cab is what it has always been. Uber has been hiding that by pissing away venture capital and preying on its drivers. And they still can’t make a profit.

Fuck Uber the company for shitting on its own employees, and yes, not contractors, EMPLOYEES!!

makes me wonder if they really pulled it because too many was asking for it.

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