Uber is causing quite the controversy and recently estimated that in 2015, it will employ over one million new drivers. The six-year-old company has seen significant growth within the past year, claiming that 50,000 new jobs are created each month. However, the jobs created are not traditional full-time positions that promote economic success and lower unemployment rates.
There is no denying the high-function and popularity of Uber, but the company’s choice of words regarding job creation is up for debate as only part-time positions are offered for independent and contracted drivers.
Typically, monthly reports determine unemployment rates, which are provided by the Bureau of Labor Statistics. Recently, these reports have not shown any significant change in numbers of those unemployed, even though 390,000 new jobs were created in the past two months. Uber’s jobs opportunities for independent contractors, a demographic not included in the reports, falls under the bureau’s category of “alternative employment arrangements.”
For Uber drivers, this means they are not given standardized pay or health benefits and are expected to pay any costs acquired on the clock–gas, parking and insurance.
The company currently provides services in nearly 300 different cities, but doesn’t share how many drivers they have. Slate explains, if Uber changes its drivers from contractors to employees, the company would definitely take an economic hit.
Alan Krueger, a professor at Princeton and former chairman of the Council of Economic Advisers, found in his study that Uber has approximately 160,000 drivers who have provided at least four rides in the past month.
Uber and its main competitor, Lyft, both are going to court to battle the distinction between employees and contractors and will no doubt, put up quite a fight.