Uber’s Miserable Driver Wages In India – But That’s What A Poor Country Means

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Uber is being accused of exploiting its drivers in India. To which Deardrie McCloskey’s comment, that the only thing worse than being exploited by a capitalist is to not be exploited at all, seems appropriate. For the actual complaint is that the drivers, despite working hard all hours, make very little after they’ve paid for the cars and fuel etc. That is, the income accruing to their labour is low.

But that’s what it means to be in a poor country. Earnings from labour are very low. That’s actually the definition. A place with high labour rates is a rich place, a poor place has low pay.

Consider this. India’s median wage is something like £4 or £5 a day. But there’s a complication here, that’s in the formal and regulated economy. In which some vast number, 70 to 90% or so, don’t participate. The average wage across all of that economy, the unregistered and the formal, is likely lower.

At which point, well, what do we think of this?

It is 3pm. Kumar has been on the roads of the Indian capital since 9am without a break. He will continue driving until 9pm or 10pm. This is his routine, seven days a week. “When I get home my daughter is asleep. My life is spent in this car,” he says. Kumar is an Uber driver in Mumbai. But the dream he and thousands of other drivers were sold by the company has turned sour. The past few weeks have seen Uber drivers – and those who drive for Ola, the domestic cab aggregator company – on the streets protesting about their conditions, calling their work “slavery”, and demanding that the government intervene. Uber entered the Indian market in 2013. Kumar was one of many poor, semi-literate Indians who left their jobs to join up, taking out a loan for a car, and expecting to significantly increase their earning potential.

OK. So, what would we expect a semi-literate to be making in an economy where the formal economy provides a £100-ish a month income?

And the incomes are astonishingly low: The State also has whopping 79.53 per cent of households (73.93 lakh) whose highest earning member earns less than Rs. 5,000 income while 15.63 per cent households (14.52 lakh) have income between Rs. 5,000 and Rs. 10,000. The proportion of households earning over Rs. 10,000 is about 4.68 per cent (4.35 lakh). Lakh is an Indian (from Sanskrit, I think) unit of measurement meaning 100,000. So we have 7.4 million households, in just this one state, living on prime earner’s income of less than 5,000 rupees a month. For the country as a whole that is 180 million households (and these are not one or two person households either). At which point we want to work out what 5,000 rupees is and at the official exchange rate that’s $83 a month.

India’s a poor place. Taxi driving is not a notably well paid occupation anywhere. The semi-literate aren’t likely to be high earners in anything approaching a modern economy. Semi-literates driving for Uber in a poor country like India make not much money. What the hell’s the surprise here?