Uber Drivers Protest Ahead of Friday's IPO
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.
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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.
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.