Uber in India: Managing a fleet of ‘Micro-Entrepreneurs’

Abstract

Advancements in digital technologies have facilitated the growth of online gig economy that entails independent contractors performing gigs for a specific organization/client/customer via a technological platform. This case illustrates the multiple forms of contentions between labor and organizations in the gig economy. Using the case of an app-based ride-hailing company, Uber, that considers its drivers as “micro-entrepreneurs,” this case highlights the various sources of conflicts between the drivers and the management. The case also delineates how Uber handled the pressure to grow by attracting a huge base of drivers in India by promising them “entrepreneurial” work, high income and freedom of being their own boss, and the flexibility to work at a time and place of their choice. Lured by such appeal, many workers left their previous jobs, invested in a car and started driving with Uber. However, once the company gained a large enough driver base and the pressure for profitability started mounting, it started reducing driver incentives. Also, to ensure efficient and effective service, it laid down cancellation penalty, complex algorithmic management and levied other forms of fees which the drivers considered unfair. This engendered dissatisfaction among the drivers resulting in widespread protests and strikes. This also led to the rise of unions in different cities. With time, the frequency of planned strikes as well as spontaneous outbursts in Uber offices only increased. Through this case study, students would get to learn: 1) About the emerging forms of conflicts between labor and firm in the new age of gig economy 2) To analyze the sources of such conflict and the underlying competing pressures; and 3) To evaluate the costs and benefits of various options available to companies in resolving such conflicts.