It is hard to remember life before ride-sharing services Uber and Lyft arrived, but it was practically impossible to hail a cab outside of major metropolitan areas. Now the presence of these app-based services is a given, with nearly 4 million drivers in 700 towns and cities around the world. There is, however, ongoing tension between the contract employee drivers and the companies they work for.
May 8 Strike
As Uber prepares for its IPO in May, which is expected to put the company’s value at upwards of a $100 billion, the drivers and organizers Rideshare Drivers United are planning a strike on May 8 that will be observed by an estimated 4,200 drivers in Los Angeles area as well as thousands of others in metropolitan cities across the country.
The main complaint is that corporate employees stand to become billionaires and millionaires while they are barely making minimum wage after paying gas, maintenance and other expenses. New York raised it rideshare driver rate to $27.86 an hour so that their income would be above the $17 minimum wage after expenses, but many L.A.-based drivers claim that they are under California’s minimum wage.
There have also been complaints that drivers are working long hours to make ends meet, which has caused a 3% increase in the number of crash-related fatalities in cities with ride-sharing services.
The gig economy is currently a fact of life. Moreover, there is no doubt that the services provided would likely be insufficient if the companies brought on full-time employees. Nevertheless, the goal here is to raise awareness over with local and state governments so they can perhaps do what New York City has, in raising the rate. As of now, Uber drivers just took a pay cut from 80 cents to 60 cents a mile. Lyft also removed a surcharge where drivers could bill at a higher rate. The strike also asks for a pay rate that matches New York.
Uber tries to buy some goodwill
In front of the IPO, Uber has announced that it is paying a one-time bonus to drivers who completed 20,000 trips before April 7. They will get between $100 and $10,000, but this likely will not appease the drivers’ call for a higher wage.
Change will likely come
Changes to employment laws will likely come in the years ahead as these issues become more clearly defined. While employers who use contractors will need to stay up to date on these laws if they wish to remain compliant, a knowledgeable employment law attorney can help them craft a strategy to enables their companies to remain competitive.