By on May 8, 2019

Uber and Lyft drivers from the world over are going on strike today to protest the company’s working conditions and pay. However, the careful timing of the event also appears to be aimed at torpedoing the brand’s fast-approaching IPO.

While Uber exists as a corporate middle man between riders hunting for a vehicle and drivers seeking a fare, the company’s official position is that both are customers. As Uber sees it, it’s providing both with access to its platform and thereby offering a service. But many drivers disagree and claim the only way to make a living is to work ludicrously long hours, which they believe should at least entitle them to be called employees and warrant some benefits. 

Initially, the gig economy was seen as a way to help individuals earn some side cash, but the broader push to employ individuals as “full-time independent contractors” has come under some criticism. Uber has already taken heat for reducing wages, effectively forcing anyone wanting to work 40 hours to up their level of commitment. But their role within the company (or lack thereof) means Uber has no reciprocal commitment to drivers.

Uber has said it’s aware of the complaints and plans to award cash bonuses (like Lyft) to more than 1.1 million drivers, with those living within the United States having the option to buy the company’s stock as part of Friday’s IPO. But that hasn’t appeased protesters, many of which cited the IPO as the tipping point for their collective actions.

The New York Times compiled a bundle of quotes from disenfranchised drivers planning to protest this week and the grievances are largely the same. They want better pay and benefits — especially sick days. “We have no sick leave, and are forced to drive long hours to make ends meet,” said Robin Thomas, 37, a full-time driver, who claimed to make between $8 and $9 an hour after expenses and vehicular maintenance.

From The New York Times:

Muhumed Ali, who said he had driven for Uber for four years, was among those protesting in London. He said driver costs continued to rise while wages dropped. He said he drove as many as 60 hours a week, up from about 40, in order to make enough money. He said he wanted Uber to increase fares to £2 per mile, about $2.60.

“It’s unfair,” he said of the public offering. “The bosses are getting billions in their pockets while drivers are living on poverty wages.”

Most complainants don’t appear terribly optimistic that Uber will change its ways, suggesting that they know the business eventually wants to replace them with self-driving cars. But that’s going to take longer than originally anticipated, meaning their sending a message that might not be in vain. But the protests have also been a bit of a mixed bag. Some cities have seen large groups of people holding flags and chanting slogans (usually outside of regional Uber offices) while others don’t appear to be affected at all.

Uber’s IPO may not escape unscathed, however. The company set a price range of $44 to $50 per share for its initial offer, giving the company a market cap as high as $83.8 billion. It believes that should allow it to raise about $10 billion in new investments. While early reports suggested Uber could be valued as high as $120 billion, analysts are less excited about the stock after Lyft’s IPO underperformed.

CEO Dara Khosrowshahi was offered an incentive to keep Uber’s valuation up once it goes public, with claims coming in that he’ll receive $100 million in stock bonuses if the company’s valuation manages to stay above $120 billion for 90 days. But this has further annoyed drivers who are complaining about low wages and was frequently referenced on signboards hoping to illustrate the difference between the haves and have-nots on Wednesday.

Gig Workers Rising, a group trying to represent independent contractors, outlined a list of demands. While unofficial, they give a general sense of what striking Uber and Lyft drivers want. Those items include a livable hourly rate (after expenses), benefits (disability, workers comp, retirement, health care, death benefits, and paid time off), and transparent policies on wages, tips, fare breakdowns, and deactivations.

[Image: MikeDotta/Shutterstock]

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32 Comments on “Uber Drivers Protest Ahead of Friday’s IPO...”

  • avatar

    Maybe it’s because I never think of Uber as a full time profession, but I have a hard time understanding these kinds of complaints when the drivers get to set when they work, where they work, and how much they want to work.

    Many of my uber drivers are retirees or college kids trying to make a few extra bucks; These are the people whom I’ve never heard complain.

    • 0 avatar

      It’s simple supply and demand. Apparently, there are a heck of a lot of drivers that are willing to work for Uber. Some of them are even willing to do it as their primary profession. If that number goes down, Uber will need to up the stakes.

      At the same time, if these independent contractors want to “strike”, they can certainly do that. It’s their part of the equation.

  • avatar

    So much complaining. You can’t have your cake and eat it too. Self employment comes with many advantages and privileges, as well as down sides.

    I’ve been self-employed for 12 years and have rarely worked less then 50 hours a week, with no benefits to speak of. But that’s ok, I love what I do and enjoy the flexibility.

    One of the privileges of self employed folks is to say no to a client. It sounds like what the people protesting should do. Say no to Uber and go do something else. You’re free.

  • avatar

    uber is a bully company that does nothing but lose money, hires idiots that actually think they can make money providing the “service” that uber sells them, laughable!

  • avatar

    This is what happened when you go into a business you understand nothing about, main problem, you have to decide who is your customer, the driver or the rider, if price is too high, riders will complain, if the price is too low, drivers will complain, so you end up with cheap prices and drivers that are unhappy.
    Uber and Lyft keep throwing money at drivers just to make them happy so they can keep the price of the ride low.
    Now, when drivers start to complain about pay per hour, Uber stopped taking new drivers in NYC and also start to deactivate drivers with low ratings so there will be more trips per driver.
    I don’t really care about all these drivers, the business for them was OK til Uber and Lyft came to this business, I blame only the drivers for ditching whatever they did before, even if it’s driving for a different company, this business is not sustainable as it is now, no body making money and the the only beneficiaries are the riders.

    • 0 avatar

      In free societies, all businesses exist to serve customers. Not employees. And certainly not “investors,” regulators, ambulance chasers and all manners of busybodies with nothing better to do than run around having opinions about how others supposedly should be forced to act.

      • 0 avatar

        And in free societies, the first and foremost responsibility of the business is to the owners/shareholders. Not the employees.

        Employees are cannon fodder. They have no stake in company, or skin in the game. Each employee is free to leave at any time and can be replaced at any time.

        Once they, the employees, buy into the company and become co-owners or shareholders, THEN, and only then does that alter the equation.

        Generally, that also alters the employee/shareholder’s ‘tude; like “am I going to protest against myself or go on strike against myself?”

        ESOPs. Greatest things for employee harmony since toilet paper.

        • 0 avatar

          highdesert is absolutely right about ESOPs. There are a multitude of case studies about the effectiveness of these arrangements, and the positive effect it has on the bottom line.

          When employees take an ownership stake and start to actually tie the success of the business to their own individual actions – it’s amazing to watch the efficiencies and attention to detail that results.

          I have read that ESOPs are increasing in popularity of late; Anecdotally, I have two clients of mine that converted to ESOPs and the net effect has been very positive.

        • 0 avatar

          Formally, you are right. But in practice, if anything other than serving the customer is prioritized, the business is bypassed.

          The extent to which that does not happen, is solely a measure of lack of living in a free society. So, the absolute only way to achieve your responsibility to shareholders, is to do nothing but focus on serving customers.

          Assuming freedom for all parties, that is. Once you can instead lobby someone to restrict customers’, potential competitors’, and others’ freedoms; to route around you, despite you no longer being the absolute best price/performance provider; for one harebrained, self serving, cooked up reason or another; things obviously change. But then we are no longer talking about free societies.

  • avatar
    CKNSLS Sierra SLT

    I don’t understand why one would thrash (wear out) their car for $9.00 bucks an hour-when McDonalds here is currently paying $13.00.

    • 0 avatar

      Hint: flexible work hours. McD’s isn’t going to allow you to work Monday evenings from 7-10.

      There are many Lyft/Uber drivers for whom driving is a “side hustle”.

      The concept of the gig economy is sound – work when you want, earn extra money, etc. The fact that it is needed the problem.

      • 0 avatar

        etherpuppet –

        The “gig economy” is great for people who desire flexibility, or to make a little extra cash on the side. Lots of retirees love doing it for a few hours a day to get them out of the house.

        I see nothing wrong with that at all. People trying to rely on gig jobs as full time employment, then complaining about not having the same benefits as a full W-4 employee are what bother me.

  • avatar

    Isn’t joining Uber/Lyft voluntary? Don’t the drivers know exactly what they’re getting paid? So, it seems they’re complaining about an agreement they entered into freely but don’t like the terms. Any other contract, if you don’t like the terms you don’t enter into it!

    • 0 avatar

      The problem is that Uber and Lyft change the terms at their discretion, and there is no recourse other than to quit. I started driving 3 years ago and was earning $.825 per mile. 2 driver rate cuts later and now I earn $.605 per mile. Also, 3 years ago Uber took a flat 25% of the fare as their “service fee” for my use of their app. Now their service fee varies wildly and can be 40-50% of the fare.

      In 2018 I increased my total fares on Uber by $5,000. But Uber kept $3200 of my extra work, while I got $1800 of it. That’s how drastically the scales have been tipped towards the companies and away from the drivers (who take all the risk and do all the work)

      Yes, drivers can and do vote with their feet. In my market, the last rate drop caused enough drivers to quit that Uber and Lyft introduced driver bonuses into my market, which had never exist during the first 2 1/2 years of me driving.

      For the life of me I don’t understand all the hate towards drivers, the “just quit if you don’t like it” mentality. No one seems to mind union workers striking for better pay and benefits.

      • 0 avatar

        If enough drivers give up driving for Uber, Uber will have to reconsider. Pricing is directly related to the amount of drivers available compared to the amount of rides requested. You are not employed by Uber. You choose when you are available. Everything is entirely voluntary. You choose to do it for as long as as it makes sense to you.

      • 0 avatar

        dw –

        While I appreciate the struggle, you’re free to find employment elsewhere. If enough drivers do that, Uber and Lyft will be forced to change.

        The reality is that neither of these companies has yet to demonstrate that they will ever be able to turn a profit, so the big question is: will either be viable, absent investor dollars?

        • 0 avatar

          hreardon, you are asking the right question. Or at least, half of the right question. Investor cash being burned up is part of how Uber (and Lyft) has captured market share.

          The other part is that Uber’s entire vehicle fleet has been provided for them by drivers. The drivers pay to maintain the fleet. The drivers provide parking for the fleet. The drivers provide their IT hardware (phones). These are massive costs that are borne by the drivers. The difficult thing is that many of these drivers don’t seem to be very good at accounting these expenses against their earnings. That is one reason for high turnover, when drivers get disillusioned after realizing their finances don’t improve as much as they expected when they started driving for Uber.

          This is also a poorly understood flaw in the scheme to replace all drivers with robot cars. If drivers are cut out of the equation, who will provide Uber with the vehicle fleet, maintain the fleet, and park the fleet? Even if the technological problems were solved, the capital costs would be gigantic.

          All this to try to get a monopoly in the taxi business, which isn’t really all that profitable except in certain very limited areas?


  • avatar

    I have talked to a few Lyft drivers (stopped using Uber because I had some technical issues with their app) and many of them stopped driving for Uber because Lyft was giving them better treatment.

  • avatar

    I do not get it- if they want to have fulltime job – work for taxi cab company. The idea of ride sharing has nothing to do with full time and even part time employment. It is just sharing the ride occasionally while you are driving to real job. It reminds me idiocy of UAW – the same attitude of entitlement that brings American companies down. UBER is not profitable so what do you think they will pay you more? Do they teach math in public schools these days?

    • 0 avatar

      You bring up a very good point. The other question is why anyone would buy shares in a company that has never made a profit and apparently needs to pay their “employees/contractors” more.

      • 0 avatar

        Anyone why buys shares in either Uber or Lyft needs to have their heads examined. They are nothing more than glorified Taxi companies.
        At some point cities will give in and allow any company with an app to operate and competition/flavor the week demand will kill them off.
        Their only hope of being profitable was self-driving cars. By the time either of these companies get that operating 20 other companies will be in that space already.

      • 0 avatar

        Thats how you make money in boom economy. At some point music stops of course and someone looses big way.

  • avatar

    I do not understand the model at all. I can’t understand how these guys can earn a living. Just today I had a Lyft ride of 9.2 miles, 31 minutes (not counting the driver’s time coming to pick me up) for $19.18 (before tip). Gas today in L.A. is $4.25/gallon. Auto wear and tear, insurance, maintenance, traffic tickets are all on the driver’s dime. After the booking app’s “fees” and then a split of the remainder, how is there enough money left to make out??
    The only way the “gig” economy will work out is with free health care for all, including medications, and some sort of guaranteed minimum wage for workers or independent contractors.

    • 0 avatar

      I find it a lot easier to figure out how and Uber driver cn come out ahead, than Walmart can be profitable selling stuff which is pretty darned complex, made on the other side of the world, shipped halfway around the planet, packed and unpacked, cleared customs, put on shelves and checked out, all for almost nothing at all. How the heck do all the people involved make anything from it?

      Free enterprise has a way of bringing out efficiencies which can be pretty hard to grasp intuitively.

      I have no doubt most people would not be able to make it as Uber drivers. But the ones who end up sticking with it, are exactly the ones for whom it makes the most sense.

    • 0 avatar

      gasser – of course if Uber was forced to provide free health care and $15+ minimum wage, and perhaps even make a profit for shareholders, your $19.18 fare would need to be raised to $32.95 (or $42.38) and would you and most other current users still take Uber at that price?

  • avatar
    Master Baiter

    If the skill you bring to the market is piloting a car, which can now nearly be accomplished by a hunk of silicon and some software, you have little right to complain about your compensation.

  • avatar
    Tele Vision

    I knew a guy who made CDN$500/weekend running an illegal cab with his opulent 1990’s Buick. No tax/commission/fees.

  • avatar

    Working conditions and benefits? Your office is your car and you can work as much or as little as you like.

  • avatar

    To all the dummies protesting; You started your own business, and so you’re a “Sub”. Don’t call yourself an employee. It make no difference if you’re a driver, tile setter, roofer, carpet layer, etc. You and your car are “materials and labor”.

    Yeah no one’s gonna hand you anything. You now have to hustle. Advertise on every media, Craigslist, facebooking, OfferUp, bulletin board, paper, flier, handout, spread business cards around, etc. Don’t stop at just moving bodies, deliver docs/parcels, process serve, etc, Use your imagination.

    Meaning don’t just sit there and cry about it. Or get back to McDonald’s and beg for your old job back.

  • avatar

    As someone who drives very, very, very, part-time, here is what has drivers upset (for me, I’m meh, whatever).

    Both Lyft and Uber have dramatically reduced the amount a driver is paid during surge pricing, which has resulted in a significant pay cut for drivers while padding lousy balance sheets for both companies.

    A greatly, oversimplified example.

    Regular Trip – say 5 miles in an urban setting during non-surge:

    Fare: $18.00
    Driver Gets: $12.00-ish

    Surge Trip – same route – 5 miles in an urban setting:

    Fare: $27.00
    Driver Use to Get: $20-ish
    Driver Gets Now – $14-ish with $2 of that being a “ride bonus for picking someone up in a surge area)

    That adds up over the hours. Again, the above is very simplified as the math is a base rate, plus time and mileage at whatever that city/region charges. In Puget Sound, for example rates in King County (Seattle/Bellevue) are much higher than Pierce County (Tacoma)

    I only drive Lux/Premium and can make about $50 an hour gross. It creates a ton of tax write offs for us that the new tax laws don’t impact (since SALT is capped and we don’t quality for personal exemptions)

    I would say anyone who thinks the job is easy has never tried it. My hat is off to anyone who does this for a full time living, and I’m thankful I can do this when I feel like it. Going out and driving (which I like) for a few hours and meeting new people (which I like) and getting paid $50 an hour to basically ferry them to nice restaurants, galas, or the airport is better than sitting on the couch watching TV on an early Saturday evening.

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