Uber Health: Not for Their Drivers

Natalie Shure

6 min read

We need to break the link between work and healthcare, not reinforce it

Early last month, the ridesharing colossus Uber announced that it had come across yet another type of automobile travel in need of disruption: the multibillion-dollar non-emergency medical transportation industry, or NEMT. "Uber Health" is positioned to dominate the fragmented private market in transportation to and from routine medical appointments, for patients who lack a reliable ride to their healthcare provider but don't need the urgent care services of an ambulance. The program has reportedly partnered with some 100 providers nationwide, and will presumably stake its claim on broad-as-possible swaths of public NEMT spending (around $3 billion from Medicaid alone, according to one estimate.)

In some ways, Uber Health is fulfilling an obvious need: that 3.6 million patients miss healthcare appointments each year for lack of adequate transit reflects an overlooked way that economic deprivation and geographic sprawl make even simple tasks unbearable. People who cite transportation problems as a barrier to healthcare access tend to be marginalized by definition: they may be too ill or disabled, live far from adequate facilities, or depend on intermittent public transit options. Certainly, ensuring that vulnerable patients are able to travel to their appointments should be a concern of any humane healthcare system, and Uber Health provides a technology and infrastructure for completing the task efficiently. Moreover, the company insists it will charge prices comparable to those of its flagship ride hailing service, and will bill providers rather than patients. (Presumably, many of these rides would then be reimbursed through Medicaid.)

But even if Uber Health positively affects one corner of a notoriously bloated economic sector, it's worth interrogating the company's role in the healthcare system overall. As the de facto vanguard of the so-called "gig economy," Uber has engineered a seismic shift in the way corporations drive down labor costs—a pesky overhead expense driven ever higher by employer-provided health insurance. While Uber is typically credited for "innovating" the taxi industry, its business model has always hinged on "innovating" technicalities of labor law to insist that its hundreds of thousands of drivers are not employees, but private contractors—a legal distinction now applied to some 54-68 million American workers, which effectually frees Uber, and the growing number of employers following in its footsteps, from the duty to provide health coverage.

Across countries, being misclassified as an independent contractor can diminish access to benefits and labor protections—but within the context of the United States' largely privatized social welfare system, the implications for health are particularly profound. The origins of the U.S. healthcare system, and its divergence from the European model, date back to World War II: with the conflict far from American soil, wartime manufacturing boomed. The Roosevelt administration quickly instituted a wage freeze, allegedly to protect the war effort by preempting work stoppages over pay at a moment when a workforce shrunken by departing soldiers wielded potentially powerful leverage over bosses. But factories desperate to compete for labor (and plum federal contracts!) and workers unable to negotiate over wages came up with a workaround: employer-provided benefits, most notably private health insurance plans.

From the government's perspective, this was a welcome stroke of luck—here was a serendipitous stopgap solution to civilian healthcare, which also stood to alleviate possible strife stemming from tightened homefront labor regulations. In 1943, the IRS rewarded this ingenuity by making employer-provided health insurance tax-free, which further facilitated its growth. Finally, in the post-war era, as conflict-ravaged European nations built humane, universal health systems and other social democratic programs from scratch, America's accidental employer-based slate of benefits was gradually entrenched.

In the decades since, access to such benefits has been overwhelmingly restricted to full-time employees, a designation Uber refuses to grant to its drivers (even as many report putting in 16-hour shifts). While this decision has promptedongoing legal challenges in the U.K. and a range of U.S. states, the company has continued to profit handsomely simply by pocketing money it would have been legally required to pay employees, but is exempt from paying to "private contractors." One 2015 analysis suggested these savings amounted to billions of dollars, and have surely ballooned since—not only in healthcare costs, but in reimbursements for vehicles, gas, and repairs that don't apply to contractors. In short, while Uber touts its boss-less, flexible, work-on-demand vision of labor, the company's success stems in no small part from waging legal and political war against the construction of an employer-based welfare state. Because most Americans still get health insurance through their jobs, Uber's redefinition of employment intimately impacts the lives of its U.S. workers—and their dependents—in a way it does not in the U.K., with its fully socialized National Health Service, or in other European countries that prorate access to benefits by the hour for all workers, with no separate designation for part-time or contractors.

The 2009 passage of the Affordable Care Act (ACA) initially held some promise for those concerned about the future of work and employee benefits, especially against the backdrop of the gig economy's meteoric rise. Among other things, the ACA regulated the individual insurance market to stamp out the slimy business practices that made it all but impossible for millions of people to enroll prior to the law, and also instituted income-based subsidies to defray the costs of premiums. The result was that Americans in non-traditional jobs could buy plans more easily than ever before, a development that wonks assured us would end the phenomenon of "job lock," where people feel trapped in jobs because they can't give up the health benefits. It's easy to see why a company like Uber would want to unlock people from their jobs, while not being on the hook for health benefits themselves, which helps explain why Uber has been such an enthusiastic champion of the ACA. This year, the company went so far as to voluntarily roll out its own outreach program during open enrollment, in a PR-savvy move to both mitigate Trump's funding cuts and sign up its massive fleet of driving "partners."

Years after its passage, we know that the ACA failed to level the playing field between employees and independent contractors: as it turns out, most individual market plans are little more than expensive, bare bones junk insurance that millions of patients can barely afford to use. A slim majority of Americans are still insured through employers, which offer far higher quality plans than those available on state exchanges. That means that "job lock" is still very much a thing of the present, and the drivers that Uber hopes will simply insure themselves remain nearly as vulnerable as they were before 2009.

That isn't to say that the solution here is a reconsideration of what constitutes an "employee." However disingenuous Uber may be in its messaging about work on-demand and being our own boss, people aren't wrong to want greater flexibility in their work conditions. Instead of reinforcing the link between work and social entitlements like healthcare, we should be untethering the one from the another by creating a unified public insurance pool in our system's place. Under a new public system, businesses could pay into an emerging Medicare for All program, the costs of which would be based on their overall revenue, not the number of full-time workers. Most analyses suggest this would actually benefit most businesses, whose taxes would be smaller than their sizable current payouts for employee healthcare. But gig economy titans like Uber have a serious stake in the status quo: by distorting workers' legal status, these companies hold onto millions they aren't paying into health benefits as the public steps in with ACA coverage plans. Of course, Uber isn't the only company advantaged by a large arsenal of workers who aren't entitled to benefits—low-wage work has long suffered a similar lack of security, but venture capitalists rarely give TED Talks cheering on its ascendance in the labor landscape. For far too long, the employer-sponsored insurance system has served to benefit firms like Wal-Mart, Uber, and McDonalds that treat their workers most harshly. By pegging contributions to the single-payer insurance pool to revenue rather than number of hires, we more fairly distribute these costs.

Uber's recent moves suggest it isn't exactly interested in Medicare for All: it's an outspoken advocate for the private multiplayer system entrenched by the ACA, which facilitates public subsidies to firms like Uber, allowing it to buy workers' labor at bargain basement rates. And Uber Health, while perhaps improving upon the current fragmented NEMT market, represents an arguably cynical desire to eke out new revenue streams within the public healthcare sector. Still—don't let anyone describe the program as Uber's "entry into healthcare." It's already been involved with healthcare all along. But there are some things they'd prefer not to disrupt.

Photo by By Sandeepnewstyle / Wikimedia Commons