They say seeing is believing, so Uber driver Chad Rutan of Newport Beach, California, decided to put the ride-sharing giant to the test. He already knew that Uber was a “fun and relaxing” way to make extra money in a cash-hungry economy. But was the company’s offer of paid college tuition too good to be true?
With his graduation from Arizona State University—a journey he interrupted before his junior year in 1984 to become an entrepreneur—Rutan had his answer. Now 60 years old, he can thank Uber for making his educational dream a reality.
Not everyone in his family knew what Uber had done, Rutan said, noting the graduation came as a surprise for his father and stepmother, an ASU alumni. But they got the point when he approached in cap and gown and handed them an invite to the May 9 ceremony. As for the secretiveness, he explains, “I did not want to let anyone down again, especially me.”
In an interview with Flexible Work News, Rutan credited the Uber scholarship with helping him overcome financial obstacles to finally earn his bachelor's degree in liberal studies from ASU's College of Integrative Sciences and Arts. Despite skepticism and his initial doubts that “there had to be a catch or something,” he said, “when my first bill came for tuition and it was paid, I knew this was an opportunity to complete something I stopped 40 years ago.”
Not only was his experience covered by Uber and ASU, except for textbooks and few fees, but his B+ average improved his school record as well. Too bad, he said, that Uber doesn't also cover post-graduate courses, as Rutan has been admitted to Thunderbird School of Global Management, also in Arizona, in pursuit of a master's in management and leadership.
A paid scholarship, of course, is not the only reason Rutan has been driving for Uber for some six years with 12,000 rides under his belt.
“I have enjoyed the flexibility of it,” he said. “It allows me time to do other things that need to be done. And I get to meet some great people. I don’t really drive at night so I have met some amazing people when they are ‘normal’ (ha, ha) and have been fortunate to build two amazing friendships from it. They are now two of my best friends.”
But the opportunity to make extra cash is not as lucrative as it once was, and California’s regulations are a major reason, he said. “Everything that California has done, combined with what Uber has done, has decreased what drivers are able to make now,” he said.
For the same time spent behind the wheel, drivers find their earning potential shaved by almost half of their potential four to five years ago. “It has decreased each year with the COVID year being the exception because bonuses were high due to less drivers,” he said.
Rutan expects that Proposition 22, which California voters approved in November 2020 to provide health benefits and guarantee minimum earnings, does offer a measure of protection. But it is his view that Prop 22, awaiting a Supreme Court ruling this year, would never have been necessary if not for Assembly Bill 5, which Governor Gavin Newsom signed into law on September 2019. According to the California Department of Industrial Relations, the bill addresses the employment status of workers considered independent contractors by a hiring entity. This applies not only to ride-sharing companies but many other industries as well.
“It was typical California overreach and because of that, Prop 22 was created,” Rutan said. "And I understand Uber has to protect itself but the only thing that has happened is Uber drivers are receiving less potential income due to the operational costs Uber must now cover.”
His other suggestions for Uber—he is a graduate now—are to offer more driving incentives, restore the minimum for short rides and let drivers retain the entire $5 fee charged clients for cancelled rides.
In a 2021 survey gauging their reaction to Prop 22, California drivers for platforms including Uber, Lyft, DoorDash and Instacart overwhelmingly reported benefits. At least 88% of respondents said Prop 22 had been “good for them” with 76% experiencing an increase in pay, according to a September 2021 report from Protect App-Based Drivers and Services. The majority—84%—would even recommend a law like Prop 22 for other states, the report said.
The future of Prop 22 depends on the Supreme Court, which is expected to issue a ruling later this year, after lower courts both declared it unconstitutional in August 2021 and overturned that ruling at the appellate level. Prop 22 classifies transportation and delivery drivers as independent contractors and “provides historic and important protections and guarantees to workers in California,” according to Uber’s website. "Since its passage in 2020, California drivers and couriers have received more than a billion dollars from the minimum earnings guarantee and additional benefits from Uber— a testament to the impact this law continues to have."
As per Uber, benefits include healthcare up to $489.54 a month for those in need, compensation equal to at least 120% of minimum wage and 0.35 for each active mile, plus accident insurance to cover medical expenses and lost income of up to $1 million for job-related sickness or injury.
Appreciative of his scholarship and the opportunities it may open, Rutan said, "I don't want this to come across negative at all. I am extremely grateful to Uber for my ASU degree and providing an avenue to generate some revenue. I enjoy it and speak highly of my time with Uber. But as our ability to make money decreases, it will discourage many from joining or they will be looking elsewhere."