Photo by Drew Angerer / Getty Images  "I compare it to a traditional employee who is called to the office every 60 days and told," Hey, your wages are cut, click here, or you'll be fired. " Jeff Perry, a Lyft driver for nearly three years, reported Bloomberg .
Uber and Lyft built platforms employing millions of drivers and distributors, but both companies do not consider these employees full-time or part-time. Instead, they are classified as independent contractors. You can set your own schedules and drive for any app you want. As contractor, basic benefits such as employee compensation, health insurance and paid time off are missing. Nor can they negotiate together for higher wages or improved working conditions.
Lyft said in its recent IPO that potential investors would have to be classified as employees "to potentially change our existing business model significantly" and warned of a possible "monetary risk" has not yet been published, it will probably be a similar language contain.
The courts have largely agreed that their drivers are not considered employees.
Fortunately for both companies, the courts have largely agreed that their drivers do not count among the employees. Motorists have experienced few victories in their legal struggles against their classification as contractors. And the US Supreme Court has recently issued a ruling that strengthens employers' power to force workers to use individual arbitration instead of collective actions, further reducing the ability of motorists to challenge their status.
Prior to his IPO, Lyft ran a number of driver satisfaction programs: free bank accounts, an expanded car rental program and discounts on vehicle maintenance and repair. Uber has also tried to be driver-friendly by highlighting product updates such as in-app tipping, a redesigned driver app, and a reward program for high performers. There seems to be some nervousness that the driver problem could, so to speak, cast a shadow over the public debuts.
Uber and Lyft plan to grant some of their drivers cash bonuses to enable the drivers to buy the Stock. It's a complicated workaround for a problem for rider-sharing companies that can not give their drivers a stock because the SEC rules prevent private companies from offering shares to freelancers.
"Hopefully, this move from Lyft will bring some more income into the pockets of participants in the gig economy job market, but I do not expect that this is in many cases a big dollar amount," said Micah Rowland, COO of Gig Economy recruitment and recruitment platform Fountain. Rowland fears that this move could even backfire when the stock price collapses or when motorists create tax bills that they can not afford.
It would be a mistake to assume that every driver wants to be classified as a full-time employee, Lyft's chief operating officer Jon McNeill said in an interview last week. "The vast majority of our drivers are part-time," he said. "You know that statistics only emphasize the fact that they make money in different ways. Many of them have full-time jobs. And that is complementary. Some combine many part-time jobs because they want the flexibility to set their own schedule. An employment classification would obviously run counter because it would not allow them this flexibility. "
" An employment classification would obviously contradict this because it would not allow them such flexibility "
The question of whether motorists would trade this flexibility for employer-provided health insurance or the drivers they talk to. Professional drivers who travel 10 or more hours a day for app-based businesses would likely reclassify their flexibility, the student traveling the weekend to make ends meet, probably not
in New York City's drivers are being put to the test after a Lyft driver suicide killed over the weekend, with the ninth-rented driver in the city taking his own life since the end of 2017. The driver's death came after Lyft sued the city on the introduction of rules that set a higher hourly wage ceiling for hail drivers Lyft argued that the law would give Uber an unfair advantage because it's bigger and has more tariffs. A judge dismissed the company's offer for a restraining order.
Investors are not worried about the driver's upheaval, perhaps because they assume that such workers will soon be outdated. Both Uber and Lyft are working on self-propelled technology, with the goal of replacing human-powered vehicles with automated vehicles. Per-mile costs are falling, passenger demand peaks, and hail companies are demanding rewards.
But the technology of self-driving has blatant problems, not least that it is still years, if not decades. Legislators are increasingly skeptical about autonomous vehicles after several serious accidents. If all technology and regulatory issues can be solved, robotic taxi fleets still have to be funded, which adds to the cost of ownership – and it's unclear what those costs would be.
"We have had net losses in the past and may not be able to achieve or maintain profitability."
Lyft reports that $ 911 million was lost last year and warns that it will never be profitable. "We have historically experienced net losses in the past and can not achieve or maintain profitability in the future," the company said in its filing with the Securities and Exchange Commission. Uber will probably say something similar in his filing; The company loses around $ 800 million per quarter.
Ride hail companies face a major crash due to these losses, says Hubert Horan, a consultant with 40 years experience in the management and regulation of transportation companies, a 17-part investigation of Uber's financial situation for Naked Capitalism
]. Horan argues that Uber uses "established narratives and propaganda techniques that obscured (or distracted attention from) the evidence of the lack of competitive economics and terrible financial results." If both companies end up raising the money they hope for, this Problem "simply switches from current investors to new public shareholders.
The drivers are also on the hook for these rising losses. The only advantage that Uber and Lyft may have is the lack of financial acumen of motorists. They do not understand the full cost of using their cars and therefore give the riding companies a bargain. There is some evidence supporting this idea. Ridester recently released the results of the first study, which found that UberX drivers earn less than $ 10 an hour. At McDonald's, they would do better.
Horan argues that Uber and Lyft would have to cut costs even further ($ 3 billion or $ 1 billion) to appease shareholders. "Once they become public, they will undoubtedly do anything to further reduce wages for drivers," Horan said in an e-mail. "And also raise prices and reduce service."
Analysts point out that boarding has a low barrier to entry, meaning that it is very easy for new companies to get to market with their own products and prices that are cheaper than the established ones. Lyft says it has a market share of 39 percent, but that's no guarantee.
"Uber and Lyft can not offer a taxi service as cheap as a typical yellow cab company," Horan continued. "The idea that one day they will be so low that they can compete with transit and car owners, is a deception."