May 22, 2019
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Uber and Lyft drivers strike for pay transparency – after algorithms made it harder to understand

Mark Lennihan | AP
Mark Lennihan | AP
Uber drivers protest next to the Charging Bull statue in New York's financial district, Wednesday, May 8, 2019. The protests arrive just ahead of Uber's initial public stock offering, which is planned for Friday.

SAN FRANCISCO – Uber and Lyft drivers across the country were planning strikes and demonstrations in multiple cities Wednesday to lobby for better pay and transparency.

The demonstrations, which could prove disruptive to riders and raise the profile of movements to secure better driver pay and benefits, highlight a contradiction: technology has long promised to bring more transparency, but the algorithms that decide how much drivers get paid have increased opaqueness over their income.

Demonstrations and some strikes were expected to take place in at least eight cities, including New York, Chicago, Boston, Minneapolis, Philadelphia, San Francisco, Los Angeles and Washington. Work stoppages were planned for only some of those cities, however, and it was unclear if they would have a direct impact on wait times or passenger fares. The actions precede Uber’s initial public offering, scheduled for Friday and expected to raise about $9 billion.

Organizers from a broad spectrum of groups are calling for a range of demands including greater job security, a livable income, more transparency in the ride-hailing companies’ fare systems and a cap on the companies’ commissions to guarantee that drivers receive 80 to 85 percent of a fare.

“It’s really hard to figure out how much you’re actually making at the end of the day, especially after all your expenses,” said Moira Muntz, a spokeswoman for the Independent Drivers’ Guild, which represents 70,000 ride-hail drivers in New York City. “That’s a major piece of the transparency issue.” She added that drivers’ pay has declined as the companies have taken a bigger portion of riders’ fees.

Both Uber and Lyft have launched “upfront” pricing in recent years, showing passengers the estimated cost of a trip to avoid the surprise fares that could accompany pricing that surges with demand. But unlike a traditional taxi meter system, which pays drivers a set portion of the passenger fare, drivers are instead paid according to time and mileage regardless of the ride’s price, leading to consternation about the gulf between the companies’ cut and theirs. Previously, the companies gave drivers a percentage of the total fare.

Uber argued in its stock filing this month that its decision to decouple passenger fares from driver pay was one of the reasons to invest in the company. It helps avoid guaranteeing fares to drivers, something that can pad profits. However, the company also may eat losses if they need to compensate drivers more than a rider is willing to pay.

The new system has frustrated many drivers, who say their paychecks have decreased as it’s made it harder to capitalize on driving hours when passengers are willing to pay more.

“It used to be the passenger pays ‘this much’ and you get ‘this’ percentage of it,” said Steve Gregg, 51, an Uber driver and an organizer with Gig Working Rising, a labor group that is helping arrange the protest in front of Uber headquarters in San Francisco. “They eliminated that. What they really did is create opportunity for a much higher degree of manipulation.”

Gregg said that his pay has dropped to roughly $900 a week for 60 hours of work after expenses, from $1,200 for 40 hours two years ago. He attributes that in part to the change in fare structure, as well as lower distance-based rates.

Uber said it provides “full transparency” on rider fares and driver earnings on each trip, giving drivers the option to see their distance and mileage-based calculations within the app including trip-by-trip and total earnings. The system is akin to an itemized receipt, however, not a live taxi meter. The company added that it has worked to provide consistent earnings, stronger insurance protections and fully-funded four-year degrees for drivers.

Lyft said drivers’ hourly earnings have increased over the past two years, and drivers take home more than $20 per hour on average — though the company did not provide a median wage as an example of how that figure translated across its contract workforce. A strike ahead of that company’s IPO in March had a negligible impact on wait times and fares.

Drivers planned to gather in front of Uber offices in some of the chosen cities early in the morning to protest. Drivers in some cities will log off the app for between two and 12 hours, depending on the city. In other cities, organizers advised passengers to boycott the apps between certain hours in solidarity.

Many drivers have put in long hours already this week to help make up the hours, according to organizers.

 



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