UBER - uber hrm PDF

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UBER The bulk of Uber’s workforce of more than 2 million active drivers aren’t directly employed as regular employees by the company, instead, Uber considers the drivers people hire through its app as independent contractors. (Employee or Independent Contractor? It’s the Uber-Important Question of Today’s Economy, 2017) . This innovative way of managing resources has led to a number of positive results for the company. First, this structure of human resources minimizes the responsibilities of Uber as, while the drivers are part of the work force, they are not formally employees of the company. Uber has no obligation to pay for their employee benefits. The company also does not have to go through the paper work involved with their payroll and neither do they have to deal with the drivers’ salary taxes, social security, and healthcare benefits. Doing this greatly reduces the additional costs often associated with hiring regular employees instead of independent contractors. Moreover, Uber can easily select which drivers they want to retain or to allow to continue using their platform. Should they not be satisfied with the performance or conduct of a certain driver, they can easily remove him/her from service without creating legal problems such as wrongful termination lawsuits, and to add to this, they also have no obligation to pay for severance packages or bonuses. Uber’s classification of its drivers as independent contractors and not employees has stirred problems with different people. It has resulted in 11 different law suits wherein drivers sued Uber for worker misclassification. (Hawkins, 2018). There are people who argue that Uber’s treatment of its drivers resemble that of an employer’s treatment of an employee rather than an independent contractor’s because they still control the workplace behaviour of their drivers, it sets the prices that drivers can charge passengers, and monitor their performance, and have a practice of deactivating the app of inactive drivers after 180 days (Surowiecki, 2015). Because of Uber’s classification of its drivers as independent contractors and not employees, its drivers lose out on things such as job security, healthcare benefits, and severance packages if they are removed from their work. The lack of ethical consideration in this aspect of Uber’s HR practices has saved them a lot of money, but has, at the same time, caused law suits from their drivers. Another instance where its unusual HR practices and organizational structure has brought trouble would be in countries where Uber operates in while its legality is still in question. Its practice of hiring drivers who aren’t licensed taxi drivers to perform a similar job has sparked a lot of trouble that has clashed with local governments and taxicab drivers. These have resulted in conflicts that range from instances of impounding of car’s of Uber drivers (Khosla, 2015), threats against Uber drivers in Brazil, to protests that have turned violent in France (Chrisafis, 2016) and China (Taxi drivers stage violent anti-Uber protest - China - Chinadaily.com.cn, 2016).

According to a report in 2018: 

About a third of what passengers pay goes to Uber in the form of fees (commissions and the booking fee per trip).

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Uber driver compensation—the income drivers get after deducting Uber fees and driver vehicle expenses from passenger fares—averages $11.77 an hour. This average Uber driver hourly compensation is substantially less than the $32.06 average hourly compensation of private-sector workers and less than the $14.99 average hourly compensation of workers in the lowest-paid major occupation (service occupation workers).

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Uber driver “discretionary compensation”—the income drivers get after deducting Uber fees and vehicle expenses and the mandatory extra Social Security/Medicare taxes that selfemployed drivers must pay—averages $10.87 an hour. Discretionary compensation, as developed by our analysis, measures the maximum income available to a driver for consumption by assuming that drivers do not provide themselves the equivalent of the health and retirement benefits or social insurance programs (workers’ compensation or unemployment insurance) that regular employees (“W-2 employees”) receive.

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The Uber driver W-2 equivalent hourly wage is roughly at the 10th percentile of all wage and salary workers’ wages, meaning Uber drivers earn less than what 90 percent of workers earn. The Uber driver W-2 equivalent hourly wage falls below the mandated minimum wage in the majority of major Uber urban markets (13 of 20 major markets, which include 18 cities, a county, and a state). The Uber driver “no benefits” hourly wage or discretionary compensation—the hourly compensation adjusted for an assumption that Uber drivers pay the extra payroll taxes that the self-employed must pay but do not provide a standard benefits package for themselves—falls below the mandated minimum wage in nine of 20 major markets, including the three largest (Chicago, Los Angeles, and New York).

These practices of Uber do not do their drivers justice. Also there has been a sexual harassment issue in Uber service which considered as a wrong step of HRM practice of Uber. In the year 2017 this issue has been complaint against Uber regarding high profile sexual harassment. Susan Fowler, a former engineer of Uber has reported that she has been sexually abused by her senior managers. HR team of Uber has completely ignored this incident. This is a hostile environment which had to face this female engineer and HR team has not taken any further step against this incident and the assailant (bizjournals.com, 2019). On the contrary ,

this organization had given a choice to the victim and asked her to change her team and avoid previous manager. This step is completely against the ethical, legal and all kind of HR policies. In 2017, Uber’s chief of human resources, Liane Hornsey told USA TODAY that sexism is not the biggest employee issue rather some core issues has been identified through a 5 month investigation among the employees such as compensation issues and the performance review process, saying they (employees) feel like the company — which is valued at $69 billion — doesn’t fully appreciate them. (foxbusiness.com, 2019). Maximum number of employees from this organization agreed with this statement. Few employees also added that recruitment process of Uber is corrupted as this organization relies on internal recruitment process therefore many talents are getting wasted. The most common "con" listed on Uber's Glassdoor page is the lack of work-life balance. A former San Francisco-based Uber employee, who spoke to CNNTech on the condition of anonymity, said many engineers complained about being burned out -- and it was hard to be "off the clock" when messages rolled in late. (Kelly, 2017) In july 2018, Liane Hornsey, Uber's head of human resources, abruptly resigned after an investigation into her conduct, said the company. The inquiry focused on how she handled employee complaints about racism, according to a Reuters report citing anonymous members of the group who charged that Hornsey and Uber's human resources department ignored complaints about racist behavior at the company. (Uber HR boss out in the wake of charges she ignored employee complaints about racist behavior, 2018)

In conclusion, Uber is certainly a highly innovative business when it comes to meshing technology and human resource management. It is a pioneer in the technological transportation network industry that many companies have began to emulate. However, its unusual HR practices still generate a lot of problems and ethical questions that they would need to address to truly succeed beyond what it has achieved....