SALT LAKE CITY — While ride-hailing giant Uber is setting up for a Thursday IPO that is expected to lead to a $90 billion valuation, drivers around the country are reportedly preparing to stage strikes against the company on Wednesday, demanding better wages, better benefits and the right to organize.
Driver's from Uber competitor Lyft, which staged its own public stock launch last month, are also participating in the labor actions, which are mostly focused in large U.S. metro areas, including New York, Los Angeles, San Francisco, Chicago, Washington and Boston.
An Uber spokeswoman told the Deseret News Tuesday that the company wasn't aware of any Utah drivers participating in the work stoppage efforts. Lyft declined to respond to inquiries about what its Utah drivers had planned for Wednesday.
Numerous drivers' coalitions were planning actions, including Rideshare Drivers United. The group is asking its 4,400 Los Angeles-area members to participate in a 24-hour work stoppage and plans to picket Los Angeles International Airport and hold a noon rally "where drivers will speak about the impact of withering wages (and) other abuses inflicted by Uber and Lyft as both companies launch their IPOs."
In a press release, Rideshare Drivers noted Uber had recently cut the per-mile driver's compensation by 25 percent and is demanding minimum compensation of $28 per hour before expenses or $17 per hour post-expenses.
One Los Angeles Uber driver noted how big a role airport transportation plays in the company's overall ride volumes and is demanding fair compensation.
“Uber estimates that 15 percent of their revenues come from airport pickups” said Karim Bayumi, a Lyft driver who frequently works at the Los Angeles airport. “We provide an essential service, but Uber and Lyft investors are only ones reaping the benefits. Our picket and rally will show that ride-share drivers will not be invisible— we demand justice.”
An Uber spokeswoman said the company was working toward improving wages and benefits for its approximately 3 million drivers worldwide.
“Drivers are at the heart of our service — we can’t succeed without them — and thousands of people come into work at Uber every day focused on how to make their experience better, on and off the road," the spokeswoman said in a statement. "Whether it’s more consistent earnings, stronger insurance protections or fully funded four-year degrees for drivers or their families, we’ll continue working to improve the experience for and with drivers.”
The company also noted inits S-1 filing with the U.S. Securities and Exchange Commission that it funneled $300 million back to some 1.1 million longtime drivers via an appreciation program in late April.
In response to a Deseret News request for comment on the labor actions, a Lyft spokesman declined to weigh-in on what he knew about potential strikes by Utah-based Lyft drivers, but did said say Lyft's compensation rates had been moving up, and that the average wage was over $20 per hour.
"Lyft drivers’ hourly earnings have increased over the last two years, and they have earned more than $10 billion on the Lyft platform," the spokesman said. "Over 75 percent drive less than 10 hours a week to supplement their existing jobs. On average, Lyft drivers earn over $20 per hour.
"We know that access to flexible, extra income makes a big difference for millions of people, and we’re constantly working to improve how we can best serve our driver community."
While Uber has also cited studies showing its U.S. drivers were earning between $18-$20 per hour, a 2018 analysis by the Economic Policy Institute came to somewhat different conclusions.
Lawrence Mishel, a distinguished fellow with the institute, found that "after accounting for Uber’s commissions and fees and vehicle expenses, and taking into account the cost of a modest package of health insurance and other benefits equivalent to those earned by W-2 workers, Uber drivers earn the equivalent of $9.21 in hourly wages — less than what is earned by 90 percent of all other wage and salary earners."
Mishel also pilloried the notion that gig economy workers — independent contract or freelance workers — were becoming a significant economic force.
"The low pay and small economic weight of Uber and the gig economy overall, coupled with the fact that Uber drivers and other gig workers are mostly working on a part-time basis as a way to earn supplementary income, argue for a change in perspective,” Mishel said in his report. “There is a lot of hype around Uber and the gig economy. But in any conference on the future of work, Uber and the gig economy deserve at most a workshop, not a plenary.”
Joyce Beebe, a Rice University public finance fellow at the school's Baker Institute for Public Policy, recently completed research on the "sharing economy." In a statement, she predicted the chances of drivers at Uber and Lyft making any headway on their wage demands, even with the threat of labor actions, were slim.
“Uber and Lyft are unlikely to increase drivers’ minimum wage to $28 simply because of the May 8 strike,” Beebe said. “The success of their business models attributes, in a large part, to the independent contractor classification of their drivers.”
Beebe noted ride-hailing companies have an even greater responsiblity to control costs once they enter the public markets and become beholden to stockholders who are seeking returns on their investments.16 comments on this story
“The companies may offer to increase drivers’ pay on a one-time bonus basis or in small increments, but remember, although Uber is a tech unicorn, it is still deep in red, losing over $1 billion in 2018,” Beebe said. “After the IPO, Uber will face pressure from investors and the market to show financial improvements, which makes substantial increases in drivers’ pay unlikely."
Correction: An earlier version incorrectly stated the Uber IPO would raise $90 billion in new capital for the company. The stock launch is expected to result in a valuation for the company of about $90 billion.