The taxi supervisory authority LABO [1] has concluded an agreement with Uber to combat black sheep in the hire car industry. In view of the known cases in which the company has not complied with court judgements and laws, the authority has shown itself to be naive to say the least. Should it not first guarantee all taxi drivers in Berlin "safety and the efficiency of the business" (PBefG § 13, paragraph 1)? Should it not first guarantee all taxi drivers in Berlin "safety and the efficiency of the business" (PBefG § 13, paragraph 1)? The head of the taxi authority does not seem to care about the legal definition of it’s task. I think this is a must and not a non-binding possibility.
Uber How To - this is how it’s done
In my eyes, LABO [2] is passing the buck by agreeing to work with Uber. In Germany, and especially in Berlin, Uber’s success is based on these three pillars:
Price dumping
1. in the initial phase a few years ago, the company paid a lot of money to taxis and car hire companies that took part in Uber price dumping. The aim was to squeeze out profitable taxi companies. This was the classic method used by large companies to roll up a market. The small taxi companies were unable to counter this and the brutal introductory phase was a complete success. Uber had arrived in Berlin.
Exploitation
2. Phase two was all about growth. Drivers were needed who were willing to work for mini-wages that are still not enough to live on today. Due to the influx of people seeking protection, especially from Syria from 2015 onwards, a large number of new poor people were added to the labour market. These people were not familiar with the German labour culture with its trade unions, minimum wages, labour and social law. Since the local knowledge test for hire car drivers was initially abolished in 2017 under the leadership of CSU Transport Minister Scheuer, Uber companies were able to successfully recruit drivers from among them. According to newspaper reports, it is mainly Syrians who are employed as Uber drivers in Berlin.
Fraud
3. The increasing number of Uber vehicles is causing the revenue per vehicle, both for taxis and for app-mediated hire cars such as Uber, Bolt, etc., to fall to such an extent that most companies no longer generate enough revenue to pay their drivers the statutory minimum wage. The majority of taxi companies are only surviving because they only pay their drivers wages for routes travelled but not for empty journeys and waiting times.
Uber partner companies make profits because they pay their drivers an even lower commission on turnover and only declare the smallest part of this as wages. The majority is paid in cash "under the table". The companies thus "save" on taxes and social security contributions, and their drivers receive 900 euros or more every month as support from the job centre due to their extremely low declared income.
It is therefore fair to say that our social security systems is subsidizing exploitation, as well as tax fraud and social security contribution fraud. Every cent of support for an Uber driver paid under the table goes directly into the accounts of the global corporation. This is not a metaphor. Uber controls the payment flows in the industry with its app.
Reports from Inforadio, Berliner Abendschau and Kontraste show the effects for drivers.
The agreement
Why is LABO now entering into an agreement with Uber, and what is it about? We don’t know exactly, because the press release from the Senate Department for Mobility, Transport, Climate Protection and the Environment does not contain a link to the text of the agreement. However, a few things are obvious.
- The agreement is only intended to identify companies that are operating completely illegally. The companies registered with the LABO are not covered by the agreement. All serious studies show that the evidence for their alleged profitability cannot be true.
- An official agreement with state authorities ennobles Uber. Just like the investments in sponsoring the Berlinale and the Berlin Press Ball, the perception of Uber as a reputable company anchored in Berlin society is strengthened.
- In view of its decades of inactivity, the authority apparently wants to demonstrate its ability to act. At best, the agreement with the organisers of exploitation and wage fraud will prove ineffective for drivers and, at worst, will set back all efforts to improve quality and pay in the industry by years .
A proposal
Berlin needs good taxis. Berlin does not need exploiters but healthy companies. The first prerequisite for this is a functioning supervisory authority.
We also need real innovations in the taxi industry that make life in Berlin more practical and pleasant. Perhaps a look back to the time when the Wirtschaftsgenossenschaft Berliner Taxibesitzer ( WBT) was founded will help. This approach can be modernised. In the United States, self-organised taxi platforms have been successfully established in New York and other cities, and the idea of "platform cooperativism" is being pragmatically pushed forward. They are proving to be a successful response to the invasion of parasitic "sharing platforms".
I would therefore like to see an independent but municipally anchored brokerage platform that arranges good and fair taxi journeys and sets standards as part of the municipal control of the taxi and hire car industry.
Here, Erik Forman, founder of "The Drivers Cooperative", reports on how 7500 drivers in New York have created their own platform.
About platform cooperativism
http://platformcoop.net/about
The reason for this text
Afterthoughts
- In this text, the term "Uber" also refers to smaller, similarly operating ride-hailing companies and car hire operators. And to make it clear once again: The task of the supervisory authority for taxis and hire cars LABO is to uncover and sanction the abuses described in each individual case and to ensure that all market participants behave in accordance with the law. It must also help the Minimum Wage Act to take effect.
- Good work
In my opinion, the LABO should ensure that average taxi drivers can earn a decent income in a 40-hour week and do not become a danger to others due to overwork and stress. Today, for example, a monthly gross of 3000 euros is probably the lower limit for a salary with which a small family can make ends meet very modestly. This would require a turnover of 6700 euros (with an imputed 45% of turnover as the effective gross wage). This corresponds to 444 passengers per month, 20.5 every day or 39 euros turnover per hour. Adjusted for inflation, this would roughly correspond to the income of Berlin taxi drivers in the 1980s. This is exactly what the LABO was supposed to create the conditions for.
The reality is different. Although tourism was booming, in the last year before Corona, taxis could only expect a business volume of 15 euros per hour. The salary part of this figure were roughly 7 Euros. Today, after the end of the anti-corona measures, the situation is similar.
Is this the natural fate of taxi drivers? Hardly, because it is politics and administration that decide the conditions under which taxi drivers work. [3]
- Different markets
Hire cars are not intended to serve the same market segment and clientele as taxis. In contrast to the taxi industry, only the minimum wage law determines the lower limit of wages for hire car companies. [4]. As the supervisory authority, the LABO is supposed to ensure both. This has apparently not happened so far [5].
Logo of the article : Own photo shows a hire car at Theodor-Heuss-Platz driving under the logo of the Bolt platform. The picture shows how the platform operators are lying. Bolt, Uber and FreeNow claim that they are "only acting as intermediaries", yet they set the fares, control the way in which the cars are plugged in and payment is processed, and sanction drivers as they please. In this way, they determine the course of business down to the last detail. Taxi brokerages really do limit themselves to arranging jobs and offer practical additional services which, however, leave the companies and drivers their autonomy.
