Drivers for the rideshare companies are seeing much of their pay go to expenses while Lyft and Uber prepare for their IPOs

For over a year Rob Mead has worked as an Uber driver in Reno, Nevada, to supplement his income as a public sector worker. Now he’s wondering if it is worth it. “After gas, added monthly rideshare insurance, wear-and-tear, constant oil changes and taxes that $300 for 30 hours of work I thought I made in a week actually averages down to about $90 after expenses,” said Mead.

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“A few weeks ago I drove four passengers in a one-hour period. I looked at my profits and I made only $12 It was snowing, traffic was crazy and I basically risked my life to make that $12. After expenses I made $3.75 that entire hour.”

Mead’s wages contrast sharply with the fortunes that the executives at the rideshare companies Uber and Lyft are about to reap. This week Lyft started its investor roadshow as it prepares for its stock market listing. Lyft’s cofounders, Logan Green and John Zimmer, stand to make hundreds of millions from the sale, currently valued at $23bn. Uber plans to follow Lyft’s initial public offering (IPO) in April – a share sale estimated to be worth $125bn that will create a new generation of millionaires and billionaires from its executive class.

Both companies plan to use some of that money to develop autonomous vehicles – technology Lyft has conceded is likely to lead to the “loss of income to human drivers”.

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Uber and Lyft are planning to give some long-term drivers money to buy stock, granting them access to the hotly anticipated IPOs. But only a minority will be eligible and in the meantime drivers are organizing for better wages rather than bonuses.

“I’m not interested in what stingy package they’re going to offer,” said James Hicks, an Uber driver in Los Angeles for about four years. He has not heard anything from Uber regarding stock grants for drivers, but said he had recently had his pay slashed by the company. “You can’t tell me a billion-dollar company can’t afford to pay their drivers when all they really need to worry about is marketing and upkeep of the app.”

Facebook Twitter Pinterest James Hicks, an Uber driver in Los Angeles for about four year: ‘You can’t tell me a billion-dollar company can’t afford to pay their drivers.’ Photograph: Dan Tuffs/The Guardian

According to Uber, there are currently 900,000 active Uber drivers throughout the United States (and close to 3 million globally), many of whom have reported often making less than minimum wage and struggling to cover the expenses associated with driving.

A May 2018 report published by the Economic Policy Institute found the median wage for Uber drivers after expenses and fees is $9.21 an hour. The low pay and high expenses have resulted in high employee turnover. An April 2017 report found only 4% of Uber drivers continue driving for the rideshare company after one year on the job.

“If I didn’t owe so much on the car I bought just to do Uber I would stop driving for them,” said Baron Migs, who has worked in San Francisco, California, as a full-time Uber driver for three years. Uber recently changed the bonus scale for drivers, a move Migs said drastically reduced his pay. His Uber employee account has been hacked twice, and Migs spent several weeks without pay while the issue was sorted.

Efforts by drivers across the United States to organize and push for better working conditions and wages have been met with significant resistance from the companies.

Transportation network drivers have no rights or protections on the job Beverley Brakeman, UAW region 9A director

“Transportation network drivers have no rights or protections on the job,” said Beverley Brakeman, the director of United Auto Workers (UAW) region 9A. The UAW is currently backing a bill in Connecticut to increase wages for rideshare drivers and protect them from retaliation for organizing to improve working conditions.

The companies have hired well-paid lobbyists to kill the bill, she said. “I’m confident the drivers will prevail as they advocate for a level playing field with other transportation workers and seek to make a living wage for their families.”

In 2015, Seattle became the first city to pass an ordinance to allow rideshare drivers to unionize, but it has faced ongoing legal challenges from Uber and the US Chamber of Commerce to invalidate the law.

“What we’ve seen is the combination of Uber and other corporate interests, the US Chamber of Commerce and the Trump administration in a sense ganging up on this effort to unionize,” said the Seattle city council member Kshama Sawant, who was involved in passing the ordinance in 2015. “No matter what law we succeed in passing in city hall, we know Uber is not going to lie still. Obviously they will go after it yet again and again.”

Sawant said her office is focusing on meeting with and organizing Uber drivers to build a movement of rideshare workers similar to the one in New York City, where drivers have won several victories due to their organizing efforts.

Facebook Twitter Pinterest Members of the Amalgamated Transit Union protest in support of Uber and Lyft drivers in New York on 27 September 2016. Photograph: Drew Angerer/Getty Images

In January 2019, New York City enacted a $17.22 minimum wage after expenses for all rideshare drivers. The Independent Drivers Guild, which represents around 70,000 rideshare drivers in New York City, estimate the wage increase will boost the annual salaries of drivers by $9,600. The wage increase is the first in the US for rideshare drivers and comes in the wake of a July 2018 report commissioned by the New York City Taxi and Limousine Commission that found nearly 20% of rideshare drivers receive food stamps, 40% receive Medicaid and 16% have no health insurance.

“This raise is long overdue,” said Aziz Bah, a rideshare driver for five years currently working for Uber, Lyft and Juno. “Drivers are making more money and spending some of that time to work less and spend time with their families, so that makes a big difference.”

New York’s success has encouraged other drivers to act. In Los Angeles, 2,700 rideshare drivers are currently organizing themselves under Rideshare Drivers United to fight for higher wages, a grievance procedure against deactivation and for rideshare companies to recognize the union to negotiate with them on behalf of drivers.

“There is no reason this job should be the fastest-growing low-wage job in America,” said Nicole Moore, who has driven for Uber and currently for Lyft while organizing with Rideshare Drivers United. “Some days we’re lucky after expenses to make $8 an hour.”

She doesn’t expect the companies’ share sale to benefit drivers.

“Uber is getting ready for their IPO, they want to look really good for their investors, and are creating situations where people may be put on the street homeless because they can’t pay their rent,” added Moore. “That’s why we’re organizing.”