When the U.S. economy began to reopen earlier this year, ride-share companies Uber and Lyft found themselves in a pickle: Rider demand was approaching pre-pandemic levels, but drivers were still logged-off. In an effort to bolster their fleets, the companies began offering cash rewards of a size drivers hadn’t seen in years: Uber earmarked $250 million for bonuses in April; Lyft, which hasn’t disclosed its payout budget, gave drivers $800 just to return to the app and awarded $2,000 to new recruits in some cities.
Carrol Chang, Uber’s chief of driver operations for Canada and the United States, told the Wall Street Journal earlier this month the shortage, expected to last until at least September, was a “reckoning.”
“This is a moment of deep introspection and reflection for a company like ours to pause and say, ‘How do we make the proposition for drivers more attractive longer term?’ ” she said.
Chang’s MBA-tastic statement reads more like a copy-paste from How to Win Friends and Influence People than genuine repentance. Last week, Mission Local tested just how all that introspection and reflection translated into dollars and cents — taking a series of Uber and Lyft rides and comparing their receipts with the receipts drivers are shown.
Out of 20 rides taken by the staff, drivers received only 52 percent of what riders paid, on average. To a layperson, that might suggest that Uber and Lyft were pocketing about 48 percent of fares — significantly more than the 25 percent Uber has long claimed to skim off the top (Lyft makes no such guarantee, though most people expect the two competitors take a similar cut).
What’s more, the Uber app appears to be misleading drivers on those numbers. After a driver finishes a ride, the Uber App presents a cost breakdown, showing how much the rider paid and how much Uber took home as a fee. However, those numbers appear to be incorrect. In a YouTube video, Mission Local’s David Mamaril Horowitz held his phone next to the phone of his driver, James Allen, after completing a trip across the city. Though Horowitz paid $20.11, the Uber app showed Allen that Horowitz had only paid $16.81.
To a layperson, that sounds a lot like a lie.
Responding to the Mission Local story on Friday, Uber spokesperson Zahid Arab attributed the discrepancy between the costs riders see and costs drivers see to the fact that California riders pay a marketplace fee and a “driver benefits fee.” This “driver benefits fee,” however, is a charge Uber and Lyft placed on riders after the passage of Prop. 22 to pay for drivers’ new, few benefits.
In a statement to SF Weekly, Arab said with driver incentives included, San Francisco drivers are making a median $46 per hour. When asked why drivers don’t see the same charges as riders on their App, Uber said “drivers see breakdowns that apply to them on the trip.” Lyft did not respond to a request for comment.
For months, many drivers have been saying the companies’ records of low pay and worker mistreatment have discouraged them from returning to the apps. Making a living in San Francisco by just driving rideshare requires most drivers to work over 40 hours a week, seated, without many available public restrooms, navigating some of the most congested roads in the country.
On top of that, drivers report being denied bonuses or even having their accounts deleted after disgruntled riders leave unfavorable reviews, or worse, falsely accuse them of driving under the influence. Uber and Lyft rolled out a safety program earlier this year to protect riders against assault, but that offers no protections for drivers.
Plenty of drivers turned a blind eye to these indignities. Then came Prop. 22. The California proposition solidified gig workers’ classification as independent contractors and was mostly funded by gig companies. In fact, the proposition was the most expensive in California history, with companies like Uber, Lyft, and Doordash spending over $200 million on the campaign. After California voters approved the proposition, drivers received a few benefits not typically awarded to independent contractors — namely a small healthcare subsidy and insurance protections. However, they are left unable to collectively bargain, and without the full-time benefits awarded to salaried employees of the very same companies.
Drivers and unions sued to overturn the proposition in January, saying the bill was unconstitutional because it prohibits the state legislature from granting workers the right to organize, and renders drivers unable to collect worker’s compensation. Returning to Uber and Lyft after the two companies alone spent over $108 million on Prop. 22 was, for many in California, a bridge too far.
“To pass Prop. 22, they promised a lot of things to the driver, but now what is happening is they didn’t respect their promises,” says San Francisco-based Uber and Lyft driver Rabin Karki-Doli. “Day by day, they’re decreasing our earnings, they’re forcing us to work in any city they send us, and they don’t consider that we are human.”
In its defense, Uber consistently points to a survey conducted last year that claims 82 percent of drivers supported Prop. 22. However, drivers who sued the company last year have labeled Uber’s messaging to drivers about Prop. 22 as “false and misleading.”
The PRO Act, first introduced to the House of Representatives in 2019, may punch some holes in Prop. 22. The bill, which passed the House and is now in the Senate, would reclassify independent contractors as employees for the sake of worker organizing, prevent employers from being able to replace striking workers with those who are non-union, and penalize companies that violate labor laws. Rideshare Drivers United, a Los Angeles-based organization that advocates for app-based workers, held rallies in Los Angeles, San Diego, and San Francisco in March to show support for the act. This coming Wednesday, July 21, the same group is hosting a statewide strike for driving for better payment, benefits, and the passage of the PRO Act.
On July 14, Vermont Senator Bernie Sanders confirmed parts of the PRO Act would be in Senate Democrats’ $3.5 trillion reconciliation bill. Though it’s unclear which parts of the act are included, a number of provisions could throw a wrench in Uber and Lyft’s business model — which recently has been challenged by a resurgent taxi industry — and which is dependent on classifying drivers as independent contractors.
“The PRO Act will allow drivers to be united,” explains Karki-Doli, who participates in actions organized by Rideshare Drivers United. “The rights of drivers unions will be supported under the PRO Act, and I hope that that means they can go through every detail, and find ways for us to make a better earning doing this.”