UBER’S LOSSES POINT TO STRATEGY TO DESTROY TRANSPORT INDUSTRY, SAYS TWU

August 9, 2019

The Transport Workers’ Union is urging regulation of gig economy companies like Uber, saying the company’s reported losses today reveal a strategy to destroy domestic transport markets.

Uber overnight posted a net loss of $US5.24 billion for the last quarter, with sales also down on expectations. Ahead of its public sale in May, the company disclosed it expects operating expenses to “increase significantly in the foreseeable future” and that it “may not achieve profitability”.

“Uber’s continued losses are a ticking time-bomb for our industry and our jobs. The company is not interested in making money in the short-term, it is only interested in dominating domestic markets and obliterating the companies which are already present. This isn’t just affecting other gig economy players. As Uber Freight continues to expand across the world, with Amazon’s online freight system hot on its heels, this means transport companies in Australia just won’t be able to compete with the loss maker,” said TWU National Secretary Michael Kaine.

“The implications of this are serious for the transport industry: it will mean further insolvencies involving transport companies and the widespread loss of transport jobs which will be replaced with ‘gig’ work, with no rights to minimum rates, superannuation, annual leave or the right to challenge unfair sackings. For road safety the implications are deadly: the financial pressure on transport companies and drivers will result in more deaths on the roads. Our industry is already in crisis so when you add to the mix a loss-making strategy from the likes of Uber, the industry is potentially doomed,” he added.

“Uber dodges its taxes, it doesn’t pay its workers properly, it flouts our laws and even steals data. This company is a wrecking ball to our economy and our community. The Federal Government can no longer ignore this problem, it must regulate,” Kaine said.

The transport industry at a forum in Canberra on Wednesday, truck drivers, the TWU, transport operators, transport associations and retailers backed the setting up of a Senate inquiry into the road transport industry to looks at rates, safety and the effect of gig economy companies.

Since April 2016 when the Federal Government abolished the Road Safety Remuneration Tribunal, 611 people have died in truck crashes, including 134 truck drivers. Since the start of this year 138 people have died in truck crashes including 38 truck drivers.

Two truck drivers were killed yesterday after a head-on collision in South Australia.

Insolvencies are also a major problem in transport because of low cost contracts. Over 1,000 businesses in transport, warehousing and postal industry have become insolvent since April 2016, while 136 such businesses have become insolvent between January and May this year, according to data from the Australian Securities and Investments Commission.

Amazon also has a loss-making strategy outside the US. The company reported losses of $US601 million in the quarter to June.

Uber Freight has expanded beyond the US and entered the German market two weeks ago. Amazon’s online freight system has this year been reported as dragging transport rates down in the US as much as 30%.

Poor working conditions for Uber’s rideshare drivers and food delivery riders have been exposed in surveys.

A survey of food delivery riders in Australia shows three out of every four are paid below minimum rates. Almost 50% of riders had either been injured on the job or knew someone who had. Three UberEats riders have been killed while working.

A survey of over 1,100 rideshare drivers last October showed the average pay is just $16 per hour before fuel, insurance and other costs are taken out. One in 10 drivers has been physically assaulted while 6% have been sexually assaulted. Workers responding to the survey said they faced death threats from passengers towards them and their families, rape threats, sexual assault, being punched in the face, held at knifepoint, had their car windows broken, their cars stolen and have received racial abuse. Almost two-thirds of drivers have had false reports by passengers.

In March, the ABC revealed that Uber had used spyware to hack into rival rideshare companies, to steal data on their drivers so they could lure them over to Uber. The company also used to spyware to close down accounts of government investigators who were monitoring the company’s illegal operations when it arrived in Australia in 2014.