Uber Promised South Africans Better Lives but Knew Drivers Risked Debt and Danger

Uber Promised South Africans Better Lives but Knew Drivers Risked Debt and Danger

By Douglas MacMillan, The Washington Post

CAPE TOWN, South Africa — He had been a cop, a factory worker and a taxi driver, but at 44, Shaun Cupido had yet to find a path to prosperity. Murderous gangs ruled Manenberg, the apartheid-built township where he had spent his whole life, and he was sick of having to remind his three children to lie down and cover their heads every time they heard the pop of bullets.

Then, in 2017, Cupido found a job he thought might finally change his fortunes. Uber promised to let South Africans make their own hours and be their own bosses. He rented a car, began ferrying tourists around Cape Town’s waterfront shopping districts and cliffside resorts, and for a while, the money was good. He started to dream of building his own business operating a fleet of cars for the ride-hailing company.

But little by little, he said, Uber made changes to its service that lowered his pay and raised his risks. The company recruited new drivers to the city, flooding the streets with competitors and cutting Cupido’s daily number of customers in half. Trying to make up the difference, he logged 12-hour days and began driving in the sprawling slums of the Cape Flats, where many drivers were afraid to go.

“Hustling,” as he called it, grew even riskier after Uber began letting passengers in South Africa pay in cash as part of an effort to boost ridership. Cupido heard about drivers getting robbed and attacked, but he trusted his instincts for danger.

He folded a stack of bills inside his wallet and kept working long hours, unaware he was driving straight into an ambush.

In its bid to upend global transportation and make its investors rich, Uber sold drivers like Cupido on a vision of upward mobility. Years later, some drivers say they are worse off than when they started because Uber made policy decisions that deprived them of their ability to earn a living and heightened the risks of driving in some parts of the world.

The Uber Files is a rare look inside years of Uber’s internal deliberations made possible by more than 124,000 records that former Uber lobbyist Mark MacGann provided to the Guardian. It shared the trove with more than 40 news organizations, including The Washington Post. The joint investigation, coordinated by the International Consortium of Investigative Journalists, provides insights into how the company viewed its drivers. MacGann was the company’s head of public policy for Europe, the Middle East and Africa from 2014 to 2016.

Emails, presentations and text messages from 2013 to 2017 show Uber officials, led by then-chief executive Travis Kalanick, carrying out a business plan that proved to gradually undermine their own drivers. Top executives advised local managers around the world to spend millions of dollars on lucrative incentives for new drivers and then steadily raise Uber’s commission, depriving those drivers of income and increasing the money that flowed to Uber, the documents show.

In public, Uber repeated a message that its service empowered people to become “entrepreneurs.” In private email exchanges, company officials referred to drivers as a mass of “supply” whose low pay and minimal job protections were necessary for Uber to profit.

The documents, taken together with interviews of four former Uber managers and 20 current and former drivers, show that Uber created working conditions it knew would result in many drivers barely scraping by. Uber incentivized more drivers to sign up than were necessary, shrank driver earnings and built a system that rewarded workers for undertaking routes and schedules that put them at risk of harm in locations plagued by violence, the documents and interviews show.

In written responses to questions from The Post, Uber spokesman Gus Glover said drivers have found good economic opportunities using its app, even as their earnings fluctuate “as a normal part of business.” Because drivers may freely choose to work for different app-based services, Glover said, it is “fundamental that we endeavor to create conditions to retain drivers on the platform.”

Glover did not respond to questions about Cupido or any of the specific information contained in the Uber Files.

In a statement, Devon Spurgeon, a spokeswoman for Kalanick, said the Uber co-founder helped pioneer a new business model. “To do this required a change of the status quo, as Uber became a serious competitor in an industry where competition had been historically outlawed,” Spurgeon said. “As a natural and foreseeable result, entrenched industry interests all over the world fought to prevent the much-needed development of the transportation industry.”

She did not answer questions about Uber’s treatment of drivers, its business in South Africa or its rollout of cash payments.

The challenges for drivers are particularly pronounced in countries like South Africa, where extreme levels of unemployment and inequality give Uber access to a deep pool of laborers willing to endure challenging work with few benefits. One in three working-aged South Africans are unemployed — the highest jobless rate in the world among countries tracked by the World Bank.

“The vast majority of workers can’t walk away and go to another job because there is no other job,” said Darcy du Toit, a lawyer and emeritus professor at the University of the Western Cape, who researches labor conditions in the digital economy and helped a group of drivers challenge Uber for worker rights in a South African court.

Uber says it now has 20,000 drivers throughout South Africa, including delivery drivers for Uber Eats. Some say they struggle to make minimum wage, now equivalent to about $1.40 an hour, after sharing a portion of their earnings with Uber and rental car companies, and paying for expenses like gas. Some say they have been robbed by criminals, hassled during periodic government crackdowns against Uber and targeted by rival taxi operators who attack drivers to defend their turf.

In 2016 and 2017, Uber drivers in South Africa were burned when their cars were set on fire, both men victims of suspected attacks by taxi businesses, according to news reports. One died from his injuries, according to the reports.

“The Uber platform became a platform of crime, a platform of fear,” said Derick Ongansie, 66, a former Uber driver who helped organize driver protests and one of the drivers who mounted a legal challenge against the company. “Once you get into that vehicle, you either fear that the traffic cop is going to pull you over and impound your vehicle, or you fear the criminal.”

South Africa is one of the violent-crime capitals of the world, and workers in its volatile transportation sector had been targets of theft and violence long before Uber arrived in the country. The Post did not find data showing Uber caused a rise in crime in South Africa. However, the company’s policy decisions, such as enabling cash payments after previously rejecting the idea as less safe, exposed some workers — including many first-time drivers — to a level of risk they say they had not envisioned.

Stephan Swart, a former manager for Uber in South Africa who says he was briefed on internal management decisions about drivers from 2015 to 2018, said Uber knew requiring drivers to keep cash would make them more vulnerable to robberies. Uber rolled out the policy anyway, he said, because managers believed it would appeal to millions of South Africans who lacked credit or debit cards, boosting rides in the country by as much as 30 percent, and helping Uber compete with other forms of transportation, such as traditional taxis, that accept cash.

Uber did not respond to Swart’s claim but said the company has taken steps to improve driver safety in South Africa, including giving them the ability to reject cash transactions, more upfront information in the app about passenger destinations and a button that drivers can press to call emergency security services.

“Safety is and has always been a top priority for us, and we have invested heavily over the years in technology to help keep drivers and riders safe,” Frans Hiemstra, Uber’s general manager in sub-Saharan Africa, said in an emailed statement.

One night in 2019, Cupido was carrying about 700 South African rand, or roughly $50, when his phone buzzed with the name of his next passenger: Nadine.

Two men got in his car, saying their friend Nadine had ordered the ride. After a short drive, an argument ensued, and one of the passengers bludgeoned him in the head repeatedly with the handle of a knife. As blood streamed down his face, Cupido escaped the car and collapsed in the yard of a woman who saw him and called for help. The two men drove off with his rental car.

Lying in a hospital bed with stitches in his head, Cupido realized he was too scared to ever drive for a living again. He spent a month recovering from his attack, then took the first job he could find, working the graveyard shift at a factory downtown. “I just lost everything,” he said.

Uber, despite promising to help, refused to even pay for the pair of glasses Cupido broke during the attack, he said.

The company declined to answer questions about this incident, but it said all Uber drivers in South Africa are covered under its insurance program, which reimburses drivers for emergency medical treatments and lost earning opportunities.

‘Stepping stone’
When Uber came to South Africa in 2013, nearly two decades after the end of apartheid, it entered a society still profoundly divided by race, class and the economic prospects of its citizens.

By then, the company had raised over $300 million from investors and begun using that money to recruit an army of drivers in dozens of cities. Uber believed that when it put more cars on the road, it would reduce the average wait time for passengers, thereby generating more dedicated Uber customers.

Uber told some local businesses it aimed to have 10,000 cars on the road in Cape Town, a number some believed the market could not sustain, according to Yazeed Orrie, a former leader of a South African taxi industry council that met with Uber soon after the company arrived in the city.

“We said, ‘No, it’s not going to happen. We’ll all be out of business,’ ” said David Drummond, a taxi business owner and another former member of the industry council. “Instead of doing 10 trips a day, we’ll do one trip a day. It’s not sustainable.”

Uber’s Glover denied that the company stated an intention to bring 10,000 cars to Cape Town when it arrived in the city.

Uber recruited its first drivers in Cape Town, a city of roughly 4 million people, by approaching taxis and offering the drivers cash payments equivalent to roughly $400 to join the app, according to Swart. Cape Town’s earliest Uber drivers were also rewarded with about $4 per trip in driver subsidies, an incentive that managers saw as “aggressive” but necessary to build the city’s initial supply, according to an internal presentation given to Uber’s regional managers in January 2015.

One of the locals who signed on was Ongansie, a former trucker, who became an Uber driver in 2014. “The money was too good,” he said. “We’d do 3,000 rand a day just driving around.” That was about $290 a day before expenses.

Uber has long promised drivers they will make good money. In a 2014 submission to the South African government, part of the Uber Files, the company said it “not only creates more jobs for more people, it creates better paying jobs.” In public statements, Uber executives sometimes pointed to a body of academic research by economists — some affiliated with Uber — whose work showed that Uber helps drivers become more productive and thus make higher hourly wages than traditional taxi drivers.

Another group of independent academic researchers has argued this research often failed to account for one of the company’s key advantages over taxis: a mountain of outside financing it was willing to spend sweetening driver earnings and lowering prices for riders. Over time, Uber pulled back these subsidies, increased its commission and multiplied the number of drivers on the platform — altering the financial picture for drivers who came to rely on the app, documents and interviews show.

“That happened all the time. You’d lure the drivers in with subsidies, and over time you cut back on that,” said one former senior Uber executive interviewed by The Post. The person spoke on the condition of anonymity to discuss internal company matters.

Uber’s Glover told The Post that incentives and referrals are a common way for companies to grow their business. “As the market has matured we have adjusted these incentives accordingly,” he said.

By the end of 2015, Uber had tapered off most subsidies for drivers in South Africa, but new drivers were still signing up in droves, company emails and interviews show. Uber implemented a waiting list for new drivers in the country, which helped it limit the number of cars on the road and the negative impact on driver earnings, said Swart and one other former Uber manager in South Africa, who spoke on the condition of anonymity to discuss internal company matters.

Citing the strong driver numbers, the pricing team in Uber’s San Francisco headquarters sent emails to regional managers overseeing the Middle East and Africa operations in December 2015, saying it looked like a good time to raise the company’s commission to 25 percent of every ride, up from 20 percent.

The regional managers pushed back, warning that taking from drivers could backfire. These managers argued that “if we push partners to 25% we are putting pressure on [drivers’] earnings and the risk is that this will end up with protests again and union formation around our drivers,” Joanne Kubba, a public policy manager for Uber’s Middle East and Africa operations, wrote in one email.

Kubba declined to answer questions about this exchange.

Uber raised the commission, helping South Africa become one of the company’s most lucrative markets. Despite losing money in its global business for much of its existence, Uber became profitable in Johannesburg 14 months after launching there — its fastest city outside the United States to turn a profit, according to a 2015 management presentation. Another document shows Uber turned a profit in Cape Town by March 2015, within two years of launching.

As Kubba predicted, driver protests became a regular feature of life in Cape Town. Crowds of drivers swarmed Uber’s local offices in the downtown waterfront. But because Uber’s senior leaders refused to raise drivers’ pay, there was little the local managers felt they could do, according to Swart, who at the time oversaw driver recruitment.

Once a year, Swart helped organize “engagement days” for drivers, where Uber served hot dogs and held question-and-answer sessions. “We would do these phony baloney sort of events to prove that we look out for the drivers,” Swart said in a recent interview, his first about his experience at the company. “We would listen to drivers and hear their concerns, but you often felt like, ‘Yes, we hear it, but what can we really do about it?’ ”

Swart now runs Lularides, a start-up helping unemployed South Africans find work at app-based delivery companies.

Glover, the Uber spokesman, said the company regularly meets with drivers to hear their concerns. Driver earnings “are affected by factors such as seasonality and the macroeconomic environment (cost of living, fuel etc),” he said in an email. “We closely monitor these changes and review prices accordingly to ensure that driver economics remain healthy.”

In his third year driving with Uber, Ongansie, the former trucker, says he made about one-third as much in earnings as his first year. After expenses — including gas, insurance, cellphone data and car maintenance — his hourly pay often came out to less than $1 an hour.

Some drivers say they had no choice but to keep driving because they were locked into costly rental car agreements. Uber partnered with WesBank, a local bank that offered financing for car rentals to South African Uber drivers based on the number of kilometers they drove, even when no passenger was inside the vehicle, according to WesBank.

At an event announcing the partnership, Alon Lits, Uber’s then-general manager for sub-Saharan Africa, described the rental agreement as “a stepping stone” for drivers. “It becomes an ecosystem for drivers to work towards self employment and ownership,” he said in a video of the event posted online by WesBank. WesBank later scrapped the partnership because, after Uber began accepting cash payments, many drivers failed to pay off their loans, according to Chris de Kock, who stepped down as chief executive of WesBank in June.

“It could be that the business case for drivers did not allow enough to cover all expenses,” de Kock said in an email, adding that he didn’t remember enough about the specifics of Uber driver earnings, so he “cannot say for sure.”

Glover did not respond to specific questions about the WesBank partnership, but he said Uber has worked with a number of financial institutions to give drivers access to vehicles at affordable rates. “It is important that these financial offers work for drivers, and we have therefore reviewed and changed the offers when they have not,” he said.

Lits, who left Uber in 2020, declined to comment.

Robberies, hijackings, murder
When Elize Faivelowitz’s phone rings, it usually means something bad has happened to an Uber driver in Cape Town.

The owner of Prodriver Placements, an independent business that manages a fleet of Uber cars and a team of drivers, Faivelowitz gets frequent calls informing her that her cars have been impounded by the city, that her drivers have been assaulted or robbed, or, occasionally, something worse.

“This is a dangerous business,” said Faivelowitz, 51. “You will possibly get hijacked, and you can get murdered.”

As ride-hailing became a ubiquitous mode of transportation in South Africa, it also became a source of opportunity for criminals. When gang members in the unruly Cape Flats discovered they could bring a car containing cash to their doorstep with the touch of a button, they began robbing ride-hailing drivers on a daily basis, according to Dail Andrews, a state advocate who this year won the convictions of two gang members of murdering a driver with a brick during a 2019 robbery.

And when Uber cars began siphoning customers from the local industry of minibus taxi operators, those companies launched a campaign of violent intimidation, kidnapping Uber drivers, holding them for ransom, and, in multiple instances, burning ride-hailing cars with the drivers inside, according to news reports and interviews.

Makhosandile Tumana, a spokesman for the South African National Taxi Council, which represents minibus operators, denied that the industry is responsible for any attacks against Uber drivers.

Timothee Nduwimana, a 32-year-old Uber driver in Cape Town, said taxi drivers held him hostage earlier this year when he was picking up passengers during a taxi driver strike. The taxi drivers took Nduwimana from his vehicle and held him somewhere private, he said, warning him they would burn his car if his boss — the person from whom he rented the car — didn’t send the equivalent of about $300.

“They started to slap me. Then, when the boss heard how I was crying, he sent the money,” Nduwimana said.

Uber drivers all over the world have faced vicious attacks. At least 50 workers for app-based ride and food delivery services have been killed in the United States in past five years, according to Gig Workers Rising, a driver advocacy group. In countries including France, Switzerland, Belgium and Portugal, Uber’s executives tried to exploit incidents of violence against drivers in the company’s efforts to publicly discredit the taxi industry, documents show.

In its responses to The Post, Uber acknowledged past mistakes in its treatment of drivers but said no one at the company wanted violence against Uber drivers. In markets such as South Africa and Brazil, where there is a history of violence, Uber developed extra features designed to ensure the safety of riders and drivers, the company said.

Uber declined to comment on Nduwimana’s story or on the Gig Workers Rising report.

In 2016, Uber began requiring some drivers to accept cash for payment in a few countries including South Africa, where, according to the World Bank, roughly 40 percent of adults lacked credit or debit cards. Two people who were senior executives at the time said the strategy sparked an internal debate about the wisdom of making drivers potential targets of crime in places where robberies were common. Both former Uber executives spoke on the condition of anonymity to discuss internal company matters.

The policy contradicted Uber’s marketing and lobbying messages, which had said for years Uber was safer than traditional taxis because it used no cash. Less than two years before launching cash payments, Uber had even lobbied the South African government to ban cash payments from inside ride-hailing services, according to a draft of the proposed rules Uber executives circulated in October 2014.

“Unlike traditional taxi and charter/shuttle operators who are required to carry large sums of cash, Uber drivers operate on a cashless system and are therefore at far less risk of robbery,” the draft proposal said. Prohibiting cash would “ensure that drivers are safer,” the document said.

Drivers again protested, demanding the company remove cash payments from the app, according to interviews and news reports. In 2017, Uber made cash optional for drivers. But many drivers, including Cupido, continued to use the cash feature, because it helped them find more daily trips and gave them some money to use at the gas pump.

As part of an effort to stop criminals from creating fake, untraceable accounts, Uber in 2017 began requiring all passengers with no credit cards to verify themselves using social media profiles, the company said. But Teresa Munchick, a former Uber driver who helped lead a driver advocacy group in South Africa, said this measure was ineffective, because she and other drivers continued to see riders with obviously fake names.

After Uber launched cash as a payment option in Sao Paulo, Brazil, in 2016, attacks or robberies involving Uber drivers in the city rose tenfold — from an average of 13 a month to 141 a month — according to a Reuters report, which cited data obtained from a public information request.

In his responses, Glover said Uber’s “original model” focused on card payments, but as the business grew, “we introduced cash payments in order to be inclusive and offer mobility options to as many people as possible.”

Uber acknowledged in its most recent annual filing with securities regulators that the use of cash with its services “can increase safety and security risks for Drivers and riders, including potential robbery, assault, violent or fatal attacks, and other criminal acts.” Cash-paid trips accounted for seven percent of all money spent on Uber rides and goods last year, the filing said.

Glover said Uber improved its verification process last year, when it started requiring passengers to upload a photo of themselves the first time they take a trip using cash. Uber declined to comment on the Reuters findings. At the time of the report, the company said it had seen a rise in safety incidents but was unsure whether that was the result of added dangers or the surge in business that resulted from the introduction of cash payments in the country.

A ruling overturned
A driver uprising is gathering momentum around the globe. Uber drivers are demanding better pay and job protections, arguing the company illegally classified them as independent contractors to avoid giving them benefits. In recent court rulings in Britain, Switzerland and France, drivers have prevailed.

But in South Africa, little has changed. In 2017, the country’s labor tribunal found a group of former Uber drivers were “economically dependent on the ability to drive for Uber” and were therefore Uber employees. But the next year, following a legal challenge by Uber, the ruling was overturned because of a technicality. The drivers had signed contracts with Uber BV, the company’s Netherlands-based holding company, but had lodged their complaint with Uber SA, its South African subsidiary — invalidating the tribunal’s ruling.

“Uber, like other major platforms, litigate with vast resources to defend their business model,” said du Toit, one of the lawyers who worked on the case. “This makes it difficult, if not impossible, for most workers to challenge them in the courts.”

As the coronavirus pandemic dried up tourism and gas prices climbed, many drivers found it even harder to make a living. This March, drivers in Johannesburg and Durban shut off their ride-hailing apps for three days to protest for better pay, calling on ride-hailing companies to reduce their cut to 10 percent. Uber kept its commission unchanged at 25 percent.

An annual study of 12 app-based platforms for drivers and other tradespeople in South Africa by Fairwork, a joint research project of the University of Oxford and the Berlin Social Science Center, found Uber’s treatment of workers ranked lower than that of six other companies operating in the region. Uber, unlike some other companies, did not guarantee workers the local minimum wage, did not provide clear and transparent terms of their employment and did not give them the freedom to collectively bargain.

Glover said Uber increased the cost of fares in December 2021 and again in March 2022 to reflect the rising price of fuel. Uber did not comment on the Fairwork study.

Recently, Cupido returned to the place where he was assaulted, a quiet suburban street where kids played in the yard of a nearby elementary school. For three years, he had replayed the incident in his head, wondering whether he could have done something to avoid the attack and processing the trauma with his wife, his kids and a therapist.

Being there, he said, made the pain come rushing back. “It brings back the agony.”

The threat of gang violence still hangs over Cupido’s community of Manenberg like storm systems. On days when it looks clear, he walks his 13-year-old son home from school. On days when the neighborhood erupts with shooting, he drives to school in his car.

Cupido has given up on his dream of entrepreneurship. He’s resigned to live in Manenberg, working nights at the factory, coaching soccer for the local youth and trying, as best he can, to keep his kids out of danger.

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