Former top Uber lobbyist says drivers should be presumed employees
In a 10-minute speech to European Parliament, Mark MacGann shredded the gig economy's favorite policy position
The debate over whether Uber drivers are employees or independent contractors is as old as Uber itself. As anyone who follows platform work knows, the gig economy model relies on hiring workers as self-employed contractors, not employees. Treating workers as contractors allows companies to save a lot of money by skirting labor protections and benefits to which most employees, but not contractors, are entitled. For example: paid time off, unemployment insurance, and a minimum wage.
By now, lots of time and money has been invested in this debate, and the positions of both sides are clearly staked out. But for the first time—at least that I can recall—a former top Uber lobbyist has switched sides from selling the gig model to attempting to tear it down.
On Tuesday, Mark MacGann, Uber’s head of public policy for EMEA from 2014 to 2016, spoke to European Parliament about the balance of power on tech platforms and called for gig workers to be presumed employees, not contractors. “A presumption of employment strikes the right balance,” MacGann told MEPs. “It is a balance that still allows the flexibility for those who want it, while shifting the cost of that flexibility to the entity that benefits the most: the company.”
MacGann’s comments are particularly important as the EU weighs new rules to improve the conditions of people working on digital labor platforms like Uber. The European Commission released a draft proposal back in December aimed at ensuring “that people working through digital labour platforms can enjoy the labour rights and social benefits they are entitled to” and increasing worker protections from algorithmic management. Per Politico, EU lawmakers are “in the final stretch of negotations” on the platform work bill, which could reclassify more than 4 milion gig workers as employees instead of independent contractors.
In case you haven’t heard of MacGann, he’s the whistleblower who provided the trove of documents known as the “Uber Files” that came out over the summer. The Uber Files consisted of more than 124,000 documents from 2013 to 2017 that MacGann passed to Guardian reporters in Geneva this past January in suitcases crammed with laptops, hard drives, iPhones, and paper. Press coverage focused on how Uber broke laws, evaded law enforcement, lobbied governments, paid off academics, and even leveraged violent conflicts between its drivers and taxi workers, all to advance its ride-hail model around the globe.
The Uber Files, as I wrote at the time, were largely old news. If you didn’t know that Uber built its ride-hail empire with brash tactics like evading law enforcement and promoting taxi aggression as well as traditional corporate power plays such as lobbying and crafting in-house economics research to support its policy agenda, you weren’t paying attention.
This is the company, after all, that hired former top Obama advisor David Plouffe to lead a “political campaign” against “an asshole named taxi”; that attempted to sabotage a competitor by ordering and cancelling thousands of rides in a DDoS-like manuever nicknamed Operation SLOG; that systematically dodged and deceived law enforcement with a tool called Greyball; that lured drivers with the promise of flexibility and impossibly high earnings while internally comparing the gig to flipping burgers at McDonald’s. The company whose co-founder and former CEO Travis Kalanick was known for saying things like “boober” and “always be hustling”; who famously told a struggling driver who confronted him about fare cuts: “Some people don’t like to take responsibility for their own shit.”
If the Uber Files were largely old news though, MacGann’s speech to the European Parliament on Tuesday was anything but.
Over 10 minutes, MacGann described to MEPs how Uber grew high on its own success and, at least internally, dropped any scruples in its quest for global taxi domination. “We were permeated by a sense of self-entitlement,” MacGann said. “We were right, everyone else was wrong. The response to every problem was ‘Uber on.’ Don’t ask for permission, just launch. Local resistance? Uber on. Drivers getting fined? Uber on. Cars getting impounded? Uber on. Drivers getting arrested? Get them a lawyer, and Uber on.”
MacGann also described how Uber…
Always intended to cut driver wages after launching in new cities. “It was a company-wide campaign called ‘burn the burn.’”
From early 2014, as class-action lawsuits around employment status started to appear, had the legal team instruct everyone to refer to drivers as “partner-drivers” and talk about “economic opportunities” but to never use the words “job” or “employment”
Paid academics to “use skewed data sets” to produce results that bolstered Uber’s policy positions. “The data would show high earnings because the data didn’t take into account the time that the drivers were waiting between one trip and another. The data would show that the drivers wanted to be independent, but based on very carefully designed driver surveys.”
It’s striking to see someone who’s been behind the curtain, manuevering the puppets, draw that curtain back and reveal the strings. That’s what it felt like MacGann was doing on Tuesday. He said what many of us already knew or suspected, clearly and succinctly. He put names to Uber tactics like “burn the burn” and stated the real purpose of jargony phrases like “driver-partner” and “economic opportunities.” He clarified how Uber manipulates data and statistics to further its policy agenda and encouraged policymakers to press the company for the source data on any claims it makes (which, side note, is always a good practice).
“Uber didn’t create a new type of worker as much as find new ways to avoid the costs and responsibilities that employers have towards their workforce,” MacGann said. And: “Platform companies that deny their workforce basic labor rights in the name of a zealous, stubborn, libertarian belief that ‘flexibility’ is what workers value most, are being dishonest with governments, misleading with investors, and, in the harsh economic times in which we live, cruel with millions of workers.”
The gig economy has always been something of a regulatory arbitrage. The question now, as always, is how to make it better for workers. It’s true that many gig workers are taken advantage of through algorithmic management and gamified earnings; it’s also true that many value the flexibility of a job like ride-hail driving, and prefer it to an alternative like working at Walmart or McDonald’s. At the heart of the problem, as MacGann pointed out, is the power imbalance between platforms and their workers. Hence his question: if the companies stand to benefit the most from a flexible work standard, shouldn’t they and not their workers bear most of the costs?
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Mark MacGann full remarks to the European Parliament Committee on Employment and Social Affairs on Oct. 25, 2022:
I would like to thank Chairperson Dragos Pislaru and all the members of the Committee on Employment and Social Affairs for inviting me here to answer the Committee’s questions.
Members of the European Parliament: I have been at the nexus of industry and government for almost 30 years, persuading successive generations of governments, legislators, and regulators to enact or modify laws to facilitate business and economic growth.
I lobbied governments around the world to get Uber what it wanted in order to succeed. Today, I’m here to call on the European Parliament to defend the interests of drivers and platform workers everywhere. I hope that my testimony today will help you to better understand why giving disproportionate power in legislation to huge tech platforms risks shattering the social justice that this body fought very hard to establish and defend. If, to paraphrase Vaclav Havel, democracy is about protecting the powerless from the powerful, then I believe, respectfully, it is time to rebalance the scales in this legislative debate.
Now, platforms such as Uber were and remain a fantastic idea, harnessing telecommunications and software technologies to make life in cities and towns more efficient. In terms of getting around with affordable, safe transport, Uber brought about the changes that were long overdue. By forcing its way into cities, it’s true that Uber helped to bring about consumer choice, competition, and quality of service.
Now, in the early days of the mission at Uber, we were inebriated with the thrill of that mission, funded by unprecedented amounts of investor money. We believed in the mission and we actually felt there was something quite noble in what we were doing. We were sincere when we told drivers that they were the backbone of the company and central to its success. We treated drivers like heroes because they were our heroes.
In those days, we also shared the wealth. We gave them expensive iPhones, and showered them with hundreds, sometimes thousands, of euros in bonuses. If they couldn’t afford to buy or lease a car, we negotiated preferential deals with banks and car manufacturers. We did the same with insurance companies. We gave drivers a status that many hadn’t experienced before. We told them that they were part of the team.
As taxi drivers took to the streets to defend their incomes, we told drivers to ignore them—just “Uber on.” When politicians tried to stop us or slow us down, we co-opted democracy itself by leveraging consumers’ political power, putting very public pressure on elected officials to back off, drowning them in millions of rider petitions. We told politicians that we would agree to stop the controversial, illegal uberPOP service if they changed the law in the way we wanted.
We weaponized our drivers and we weaponized our customers. They were ours to use in the service of the mission. Governments and politicians just needed to get out of the way. Our driving mantra was “do whatever it takes.” Ladies and gentlemen, even in those days, we had disproportionate power.
The dream started to sour in 2015. The company was growing at breakneck speed and we just didn’t have time to deal with drivers in person anymore. We opened huge back-office centres to handle drivers’ concerns by messaging through the app. We actually grew wary of the very drivers that ensured the platform’s success. When we found out that drivers were seeking to organize among themselves, the company used fake identities to infiltrate their Facebook and WhatsApp groups to monitor what they were planning. We constantly revised and improved the algorithms that were increasingly directing and managing the drivers and removing most human interaction.
From early 2014, we faced class-action lawsuits from drivers who were already challenging their self-employed status. Those lawsuits forced us internally into exhausting linguistic and semantic gymnastics. The legal team instructed everyone to use the term ‘partner-drivers’ not ‘our drivers.’ The policy team was ordered to talk about creating ‘economic opportunities.’ On no account should anyone use the word ‘job.’ On no account should anyone use the word ‘employment.’ We promised the French government that we would create ‘70,000 entrepreneurs’ in Paris alone if they would radically simplify the rules for professional drivers.
Uber didn’t create a new type of worker as much as find new ways to avoid the costs and responsibilities that employers have towards their workforce. If it walked like a duck, if it quacked like a duck, then our instinct was to say ‘it’s a duck.’ But no, the management in San Francisco said, ‘it’s not a duck, it’s a hamster. Call it a hamster.’
We told everyone what we knew they wanted to hear. To investors, we guaranteed unprecedented profits over a very short timespan. We told customers that they could get a brilliant private transport service at the push of a button—no waiting, no hassle, cheaper than any alternative. We told drivers that they could make a decent living, earning thousands of euros a month, with the status of being their own boss. Everybody wins.
That was never going to happen. For a business model to succeed, someone in this case would have to suffer. It turned out, we had sold people a lie. Governments. The media. And especially drivers.
In those days, we were permeated by a sense of self-entitlement. We were right, everyone else was wrong. The response to every problem was “Uber on.” Don’t ask for permission, just launch. Local resistance? Uber on. Drivers getting fined? Uber on. Cars getting impounded? Uber on. Drivers getting arrested? Get them a lawyer, and Uber on. Violent resistance from taxi drivers? Call the media, and Uber on. Lawsuits against drivers? Hire more lawyers, and Uber on. Our employees are uncomfortable with our appetite for risk? There’s the door.
It was always a given that we would increase the commission Uber took from each trip. It was always a given that we would withdraw the so-called driver incentives—the subsidies—which allowed Uber to undercut the price of taxis and other competition. Once a city was successfully launched, managers were instructed to very quickly reduce the spending on subsidies. It was a company-wide campaign called “burn the burn.” It was, ladies and gentlemen, the very definition of price-dumping.
When we stopped the incentives, we then looked for new revenue streams. We added a ‘safe rides’ fee for the customer, although we were saying that this was the safest way to get around your city. We invented the ‘service fee’ for what we were already saying was the best service in town. I don’t believe that any of these new revenue streams actually went to drivers.
Now for a long time after leaving Uber, I struggled with how life for drivers and delivery workers appeared to be changing for the worse. The tipping point for me, and the reason I’m here today, was an Uber trip I took in Malaga in the spring of 2021.
During the trip, being Irish and very chatty, I started talking to Omar, a second generation Moroccan. He was explaining how difficult it was to find work on the platform. He would have to spend most of the day waiting in his car to be connected with a ride. Now, he was positive about Uber. But he missed the early days when he was treated as part of the team and made to feel part of the company’s success. These days, he said, there was no human interaction, and he had a lot of difficulty getting anyone to respond to his concerns.
I spent almost an hour—he drove me for almost an hour, and it cost me €32. I asked him about his earnings. How much was he actually going to take home? He said, well, Uber will take the commission of 25%, they’ll then—very responsibly, for once—pay the VAT to the Spanish government. And then he had to pay for the leasing of the car, he had to pay for the petrol, the parking, cleaning, insurance. He calculated that he might get €7 for that one-hour ride. Barely the minimum wage.
Now, when the Uber Files were published in July, Uber said, and I quote, “driver earnings in the U.S., U.K., Italy, France, and Spain are at or near all-time highs.” I would encourage the Members of this Committee to ask for the source data on which such claims are based. I know better than anyone how easy it is to produce and manipulate such data that supports your messaging. While I was at Uber, we paid academics to use skewed data sets to produce numbers that favored Uber’s position. The data would show high earnings because the data didn’t take into account the time that the drivers were waiting between one trip and another. The data would show that the drivers wanted to be independent, but based on very carefully designed driver surveys. As Mark Twain famously once wrote, there are, ladies and gentlemen, “lies, damned lies, and statistics.”
I think for so many platform workers around the world and in Europe, like Omar, the dream has soured. Despite being applauded as heroes during the pandemic, drivers and delivery workers are clearly insufficiently heroic to receive a decent living wage, health insurance, paid leave—minimum protections that were once considered so sacrosanct in this European Union.
Platform companies that deny their workforce basic labor rights in the name of a zealous, stubborn, libertarian belief that ‘flexibility’ is what workers value most, are being dishonest with governments, misleading with investors, and, in the harsh economic times in which we live, cruel with millions of workers—the workers on whose backs their businesses were built. My view is that when human capital is central to your commercial success, you had better find a way to ensure that your business model works for all your stakeholders, including your workers. Otherwise, sooner or later, your stock price is going to hit the bottom.
Now, I know that the committee is debating legislation on improving working conditions in platform work. Central to the commission’s draft is the presumption of employment—a presumption that I believe would reset the balance between the powerful and the powerless by putting the burden on the company to show that the worker is truly an employee or is truly independent, I should say. So, the presumption of employment vs. the presumption of independence. A presumption of employment strikes the right balance. It is a balance that still allows the flexibility for those who want it, while shifting the cost of that flexibility to the entity that benefits the most: the company.
In this legislative debate, power and influence, I believe, are disproportionately skewed towards the interests of the big tech platforms. I know that better than anyone. I was part of that powerful lobbying machinery. Now, I still believe that well-organised, transparent lobbying is a fundamental component of a healthy parliamentary democracy. It should be of concern to any democrat, however, when you reach a point in a legislative debate where the balance of power is so heavily tipped in favor of one side over the other. That may be the case in this debate. When tech companies have disproportionate financial resources to push their message, at the expense of the far less powerful workers on whom their model is built, there is something truly undemocratic happening.
That’s why I’m here today. I have a voice, and therefore I have a responsibility to help fix what I helped to break. Disruption can be creative, but it doesn’t have to be destructive. Human decency is not a zero-sum game. Margaret Atwood once wrote: better never means better for everyone, it always means worse for some. Respectfully, it falls to this Committee, to this Parliament, and the Member States, to ensure that tech innovation and platform work can mean better for all.
Thank you for allowing me to contribute to your work.
Wow. For once, I have no snarky comment or pedantic nitpick. Just wow.