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A week after Uber celebrated its first year of profitability, hitting a staggering $1.1 billion in operating profit for 2023, many of its drivers walked out on strike over their pay.
The walk-out, which took place on Valentine's Day, included thousands of drivers who feel they do not receive a fair share of the fees the company charges its customers. “Whatever calculations and algorithms they're using, it's useless,” said Nicole Moore, President of Rideshare Drivers United, one of the unions organizing the strike.
The official statement from Rideshare Drivers United cites “the significant decrease in pay” its riders have “all felt this winter.” Placing this claim in the context of Uber’s higher-than-forecasted operating income of $652 million over Q4 makes for uncomfortable reading.
But Uber isn’t the only company to face recent criticism for the compensation and rewards it has offered to workers amid eye-watering profitability and business success.
Already in 2024, HR Grapevine has reported on two high-profile cases of disappointing rewards for workers from Apple and Sephora.
Apple launched its Vision Pro headset at the beginning of February with a strong level of success. During the pre-sales period for the product alone, it sold over 200,000 units, starting at around $3,500 in price. It rewarded those who worked on the product with a picture of the headset. “Is that a picture/picture frame? Wouldn't a nice gift be... a Vision Pro?,” enquired a Twitter user.
Meanwhile, in the world of beauty, Sephora made Uber’s record-breaking profit look paltry with a staggering $10 billion profit recorded in 2023, shattering company records. The company acknowledged it couldn’t have reached this level of profitability without “the dedication and efforts of all employees.” The reward for employees? A ‘stale’ cookie adorning the company logo. “Ten BILLION...and they give us stale cookies,” said one employee. “They really don't reward us for the work and mental energy it takes to be a Sephora employee,” wrote another. The company also came under fire for including a note warning employees not to share information on the cookie publicly, which some took as an admission the company knew the reward was far from compelling.
These are just three examples from an industry-wide trend. Year-end bonuses awarded to U.S. employees fell by 21% last year from an average of $2,730 in December 2022 to $2,145 in December 2023. It prompts the question, are workers entitled to demand better compensation and rewards when their companies are recording levels of profitability?
Pay and promotions | Worker confidence drops as unease grows
Well, where these one-off rewards are concerned, it's arguably unfair to take a specific gesture – positive in intention, if slightly tone deaf – and make a sweeping generalization about a company’s entire pay and rewards policy.
And whilst some workers are disgruntled, such companies argue they are continuously working to make sure their employees are being properly compensated. Sephora, for example, says its record-breaking profits mean it can “continue to offer highly competitive benefits and pay, performance bonuses, education, brand perks, training products, gratis, and substantial product discounts to our employees."
However, organizations cannot ignore situations where workers feel their pay is unfairly low, particularly amid a cost-of-living crisis. In Uber’s case, for example, Gridwise Analytics found that average monthly gross earnings for Uber drivers fell 17% last year. With a billion-dollar profit on the books, it's easy to see why workers feel the ride-hailing app their pay isn’t fair.
It’s encouraging to see some companies taking a more intentional approach to protecting the financial wellbeing of their employees. Delta Airlines, for example, announced it paid out $1.4 billion in its profit-share scheme - more than Uber’s entire profit for the last financial year – to its 100,000 workers, clocking in at around $1,400 per employee.
Should companies be more like Delta and actively reward their employees when profits are high? Or is Uber entitled to its view that workers are fairly compensated? Let us know in the comments.
