Uber: the gig economy in practice

• A. Amazon
• B. Uber ✓
• C. IBM
• D. General Motors

Why: Uber, founded in 2009 and expanding rapidly in the early 2010s, popularized an on-demand model where independent drivers provide rides through a mobile app, making it a defining example of the gig economy.

• A. Gig work ✓
• B. Salaried employment
• C. Union labor
• D. Apprenticeship

Why: Gig work refers to short-term, task-based or project-based jobs performed by independent contractors, as opposed to permanent salaried employment with a single employer.

• A. The fax machine
• B. Smartphones with GPS and mobile payments ✓
• C. Dial-up internet
• D. Mainframe computers

Why: Smartphones with GPS allowed real-time location matching between riders and drivers, while mobile payment systems enabled seamless transactions, both of which were critical to app-based on-demand services.

• A. Full-time employees
• B. Independent contractors ✓
• C. Government civil servants
• D. Interns

Why: Platforms like Uber have generally classified drivers as independent contractors, which means they are not entitled to many traditional employee benefits such as guaranteed minimum wage, paid leave, or employer-provided insurance.

• A. Hyperinflation
• B. Widespread unemployment and underemployment that pushed workers toward flexible income sources ✓
• C. A surge in manufacturing jobs
• D. The complete abolition of labor markets

Why: After the 2008 financial crisis, high unemployment and weak job growth led many people to seek supplemental or alternative income through flexible platform-based work, helping the gig economy expand.

• A. It employs drivers directly as salaried staff
• B. It acts as an intermediary that matches riders with independent drivers ✓
• C. It owns and leases the vehicles used by drivers
• D. It operates as a public transit agency under contract with cities

Why: Uber's platform model connects riders seeking rides with independent drivers using their own vehicles, earning revenue by taking a commission on each trip.

• A. By charging drivers a fixed monthly subscription fee
• B. By selling advertising space inside the driver app
• C. By taking a percentage commission from the fare paid by the rider ✓
• D. By charging cities a licensing fee per vehicle on the road

Why: Uber keeps a service fee or commission from each fare, with the remainder going to the driver, which makes its revenue tied directly to trip volume.

• A. It lowers fares for all riders during rush hour to attract more customers
• B. It fixes prices at the same level in every city to ensure fairness
• C. It raises fares when demand for rides exceeds the available supply of drivers ✓
• D. It gives drivers a guaranteed hourly wage regardless of demand

Why: Surge pricing increases prices when demand is high relative to available drivers, which is intended to balance supply and demand and encourage more drivers to go online.

• A. Paper dispatch logs maintained by call center staff
• B. Satellite television broadcasts sent to each vehicle
• C. GPS location data combined with algorithms that assign requests ✓
• D. Manual route planning by a centralized team of dispatchers

Why: Uber relies on GPS to locate both riders and drivers, and algorithms use that location data along with other factors to pair requests with the most suitable nearby driver.

• A. Because drivers and riders must both be employees of the same company
• B. Because the platform's value grows as more riders and more drivers join, each attracting the other ✓
• C. Because the platform operates in two countries at the same time
• D. Because it sells both rides and food deliveries under one brand

Why: A two-sided network becomes more useful as participation on both sides grows: more drivers reduce wait times for riders, and more riders give drivers more trip opportunities.

• A. Whether the worker owns a personal vehicle
• B. The degree of control the company exercises over how, when, and where the work is performed ✓
• C. The number of hours the worker logs per week
• D. Whether the worker pays income tax on earnings

Why: Courts typically assess the level of control the employer exercises over the work itself, including how tasks are done, scheduling, and supervision. High control points toward employment, while genuine independence points toward contractor status.

• A. Taylor v Uber (2021)
• B. Aslam and Farrar v Uber (2021) ✓
• C. Deliveroo v CWU (2023)
• D. Hall v Lorimer (1994)

Why: Aslam and Farrar v Uber, decided by the UK Supreme Court in February 2021, found that drivers were workers under the Employment Rights Act 1996 and related legislation, entitling them to minimum wage and paid holiday. The case was brought at the Employment Tribunal and proceeded to the Supreme Court.

• A. Full unfair dismissal protection and redundancy pay
• B. Entitlement to national minimum wage and statutory paid holiday ✓
• C. Guaranteed pension contributions from the employer
• D. The right to join a trade union with full collective bargaining rights

Why: The intermediate 'worker' category gives access to key protections such as the national minimum wage, paid annual leave, and protection against unlawful deductions from wages, but not the full suite of employee rights like unfair dismissal protection.

• A. Because contractors are legally barred from earning more than employees
• B. Because classifying drivers as contractors can reduce costs such as employer national insurance, holiday pay, and minimum wage obligations ✓
• C. Because employment law prohibits companies from using mobile applications
• D. Because contractors cannot be terminated by the platform

Why: Contractor classification typically removes statutory obligations including minimum wage guarantees, paid holiday, pension contributions, and employer social security payments, which significantly lowers platform labour costs.

• A. The platform sets the price for each trip
• B. The worker can freely accept or reject jobs and may send a substitute to perform them ✓
• C. The platform monitors the worker's location through an app
• D. The platform can suspend the worker's account for poor ratings

Why: The genuine ability to refuse work and to delegate it to a substitute indicates the absence of personal service obligations, a key hallmark of independent business activity. The other options reflect control indicators that tend to point toward employment or worker status.

• A. Human supervisors manually assigning shifts to drivers each morning
• B. Software systems that automatically allocate tasks, monitor performance, and influence worker behavior through ratings and incentives
• C. A legal framework that sets wages for independent contractors
• D. Customer service departments that handle driver complaints

• A. A fixed fare set by local government for every trip
• B. A discount offered to riders during off-peak hours
• C. Fares that rise automatically when demand exceeds available driver supply in a given area and time
• D. A fee charged to drivers for using the app during busy periods

• A. It determines the driver's tax bracket
• B. Platforms may reduce access to trip offers or deactivate drivers whose acceptance rates fall below thresholds
• C. It sets the base fare for each trip the driver completes
• D. It is used only to calculate insurance premiums

• A. Algorithms always pay workers more than hourly wages
• B. Pay is opaque, so workers cannot easily predict or verify how their earnings are calculated
• C. Algorithms require workers to join a union
• D. Algorithms prevent any form of customer discrimination

• A. Drivers choose their own routes and set their own prices for rides
• B. Drivers are required to wear uniforms and follow a fixed schedule
• C. The company argues drivers control when and whether they work, which it uses to justify contractor status
• D. Drivers are paid a fixed monthly salary regardless of hours worked

• A. Fuel and vehicle maintenance
• B. Vehicle insurance premiums
• C. Paid holiday and sick pay
• D. Depreciation of the vehicle

Why: Because drivers are classed as independent contractors rather than employees in many markets, they do not receive paid holiday or sick pay. Fuel, maintenance, insurance and depreciation are all costs they must cover from their own earnings.

• A. The driver's take-home pay after all deductions
• B. The total amount paid by the rider before the platform takes its commission
• C. The fixed monthly fee drivers pay to access the app
• D. The tax levied on each completed trip

Why: The gross fare is the full amount charged to the passenger. The platform then deducts its commission or service fee, and the remainder goes to the driver, so the gross fare is always higher than what the driver actually receives.

• A. Because drivers are paid only for trips, not for time spent waiting for requests or travelling to pick-up points
• B. Because the app automatically doubles the fares for passengers
• C. Because drivers must pay a fee to passengers for each ride
• D. Because earnings are always paid in arrears after a full year

Why: Drivers are generally paid only for the active trip portion. Time spent logged in but waiting for a request, and unpaid travel to pick-up locations, reduces effective hourly earnings even when trip income looks healthy.

• A. Guaranteed predictable working hours
• B. Income volatility and uncertainty about future work
• C. Access to employer-funded pension schemes
• D. Mandatory fixed rest breaks set by the platform

Why: Gig work often comes with irregular income and no guaranteed hours, which creates financial stress and uncertainty. Stable hours, pensions and mandated breaks are more typical of employment arrangements, not gig work.

• A. To reduce the total number of drivers on the road at peak times
• B. To increase fares when demand exceeds available driver supply, encouraging more drivers to be available
• C. To ensure all passengers pay the same fare regardless of demand
• D. To guarantee drivers a fixed hourly wage during busy periods

Why: Surge pricing raises fares when demand outstrips supply. The higher price is intended to attract more drivers onto the road and balance supply with demand, though it does not guarantee a fixed wage for drivers.

• A. Full-time salaried employees
• B. Independent contractors versus employees ✓
• C. Government civil servants
• D. Volunteer community workers

Why: Much of the regulatory conflict around Uber concerns whether drivers should be classified as independent contractors, which limits employer obligations, or as employees, which would entitle them to minimum wage, benefits, and other protections.

• A. Surge pricing caps
• B. Operating licensing requirements ✓
• C. Congestion tolls on private cars
• D. Taxi medallion auctions

Why: Many cities require ride-hailing platforms to obtain operating licenses or permits, which can include conditions on driver background checks, insurance, data sharing, and accessibility, giving local governments a direct tool to shape platform activity.

• A. To eliminate the need for insurance coverage
• B. To ensure drivers earn a baseline income after expenses, addressing concerns about low and unpredictable earnings ✓
• C. To increase the number of taxi medallions issued
• D. To prevent drivers from using smartphones

Why: Minimum pay rules, such as those adopted in cities like New York and Seattle, aim to guarantee drivers a floor on earnings per trip or per hour, responding to criticism that algorithmic pay can fall below a livable wage once unpaid waiting time and vehicle costs are considered.

• A. The price of gasoline in the city
• B. Traffic congestion and the need for accurate trip and mobility data for planning ✓
• C. The number of restaurants near airports
• D. Local property tax rates

Why: Cities often require ride-hailing firms to share trip data so planners can understand traffic patterns, congestion effects, and service coverage, since platforms otherwise hold this information privately and it is essential for transport policy.

• A. Uber sets identical rules everywhere by federal law
• B. Local governments have varying legal authority, political priorities, and labor market conditions, leading to a patchwork of rules ✓
• C. Cities are prohibited from regulating any transport service
• D. All gig economy platforms are banned in every country

Why: Regulatory authority for transport often sits with cities, states, or national governments depending on the country, and each jurisdiction balances consumer access, driver welfare, taxi industry interests, and congestion goals differently, producing a patchwork of rules.

• A. Gig economy ✓
• B. Bureaucratic employment
• C. Salaried retainer work
• D. Cooperative labour

Why: The gig economy refers to labour organised through digital platforms that connect workers with short-term, flexible tasks, such as driving passengers or delivering food, typically paid per job rather than through a fixed salary.

• A. Independent contractor ✓
• B. Shareholder
• C. Apprentice
• D. Volunteer

Why: Uber has historically classified drivers as independent contractors rather than employees. Courts and regulators in several countries, including the UK Supreme Court in 2021, have challenged this classification, debating whether drivers qualify for employment protections.

• A. Managers manually assigning shifts using spreadsheets
• B. Software systems that allocate tasks, set pay, and monitor worker performance automatically ✓
• C. A union-negotiated pay scale
• D. Government regulation of platform prices

Why: Algorithmic management uses software to assign jobs, determine pay rates, evaluate performance through ratings, and sometimes deactivate workers, often with limited transparency about how these decisions are made.

• A. Guaranteed lifetime employment
• B. Flexibility to choose when and how much to work ✓
• C. Automatic access to pension schemes
• D. Fixed hourly wages regardless of demand

Why: Many platform workers value the flexibility to set their own hours and work around other commitments, though this often comes with income instability and fewer guaranteed protections.

• A. Workers will be required to join trade unions
• B. Autonomous vehicles and automated systems could reduce demand for human drivers and couriers ✓
• C. Platforms will begin offering permanent contracts to all workers
• D. Customers will stop using digital services

Why: Self-driving technology and automation threaten to displace platform jobs such as driving and delivery, raising questions about retraining, income security, and the long-term viability of gig work for those who depend on it.