Uber and Lyft drivers in Los Angeles strike over pay, working conditions

[sopas ej]

I wasn't sure where to put this story; but hey, if people can post about US states' GDPs here, I can post about Los Angeles Uber and Lyft drivers airing their grievances...

...which, by the way, I was wondering when this would happen; less regulation means more exploitation of workers, right?

From NBC News:


Uber and Lyft drivers in Los Angeles strike over pay, working conditions
“I’m drowning in this gig economy," one striking driver told NBC News.

March 25, 2019, 6:08 PM PDT
By Ben Kesslen and Ted Chen

Some Uber and Lyft drivers in Los Angeles held a 25-hour strike Monday to protest wage cuts and working conditions.

The work stoppage was spurred by Uber’s recent announcement of a 25 percent cut in drivers' pay per mile in Los Angeles and parts of Orange County.

Hundreds of drivers for both Lyft and Uber protested during the day outside Uber’s offices in Redondo Beach, Calif., according to Rideshare Drivers United, an advocacy group.

Sinakhone Keodara, 44, a Lyft driver, was among them.

“I’m currently homeless,” Keodara told NBC News. “I don’t make enough to get out of my situation, but I can’t walk away from Lyft. I’m trapped in an endless cycle.”

Uber said that with the changes to its fare rates, drivers will earn the same as in the fall.

“These changes will make rates comparable to where they were in September, while giving drivers more control over how they earn by allowing them to build a model that fits their schedule best,” Uber said.

Lyft told NBC News in a statement, “The vast majority of drivers use Lyft as a temporary source of extra money -- in fact, 91% drive fewer than 20 hours a week” and noted it has not changed its rates in 12 months.

Uber driver Suzanne Gersbach told NBC Los Angeles that “over the last three and a half years, almost every like six months, they continue to lower the incentives and the rates.”

Drivers for both rideshare companies say the fact that they have to pay to maintain their vehicles makes it difficult to earn enough to live on.

Keodara said he often works seven days a week and 14-hour days, but still finds himself sleeping in the car he’s renting from Lyft and skipping meals.

As a member of Rideshare Drivers United, Keodara helped organize the day’s action.

The group is calling for minimum pay that matches New York City's new rule that rideshare drivers get paid $28 an hour salary before expenses. Lyft and Juno are currently challenging that New York City provision in court.

The drivers' organization in Los Angeles also wants drivers to have “the right to organize without retaliation.”

[...]

Link: https://www.nbcnews.com/news/us-news...itions-n987276

[Docere]

Good. They are workers, not independent contractors or "entrepreneurs" or whatever.

[Pedestrian]

Let them do whatever they want. There are plenty of people wanting to do this work and if some portion of them aren't happy with what they are making, they should do something else.

Uber and Lyft are both losing money as they battle over market share. Lyft subsidizes each ride by about $2 out of pocket. So they have no money to hand to drivers and if one of them raised prices unilaterally to get more per ride they would lose business massively to the competition. So the deal for drivers is what it is. It is up to them to figure how to make more per ride by cutting their own costs or find another source of income. Actually, if some of them do quit, the balance of supply (of drivers) and demand for rides would tilt more in favor of the companies and drivers and maybe they could raise prices a bit. But as things, are, anytime I turn on the app in front of my residence in SF there are 6 or 8 drivers within a couple of blocks and generally I can get picked up in 2-3 minutes. That means the drivers have no leverage to get paid better.

[dimondpark]

Originally Posted by Pedestrian

Uber and Lyft are both losing money as they battle over market share. Lyft subsidizes each ride by about $2 out of pocket. So they have no money to hand to drivers and if one of them raised prices unilaterally to get more per ride they would lose business massively to the competition. So the deal for drivers is what it is. It is up to them to figure how to make more per ride by cutting their own costs or find another source of income. Actually, if some of them do quit, the balance of supply (of drivers) and demand for rides would tilt more in favor of the companies and drivers and maybe they could raise prices a bit. But as things, are, anytime I turn on the app in front of my residence in SF there are 6 or 8 drivers within a couple of blocks and generally I can get picked up in 2-3 minutes. That means the drivers have no leverage to get paid better.

It seems like none of the local Uber or Lyft drivers even live in the Bay Area. They come from sooofar away, like Sacramento, Merced, Los Angeles etc. I feel sorry for them.

[Pedestrian]

Originally Posted by dimondpark

It seems like none of the local Uber or Lyft drivers even live in the Bay Area. They come from sooofar away, like Sacramento, Merced, Los Angeles etc. I feel sorry for them.

Exactly, which means it must cost them a lot just to come into the city to work. But that's their problem--if they can't make money doing it, they should quit, but given how many there are they must be able to.

The fact that so few of them live in the city often means they don't even know how to get around it and they follow the ridiculous Uber app for routing instructions. I always ask my drivers now if they live in the city and if not I tell them a better way to go where I'm going than the Uber app does (more direct, less traffic).

[The North One]

uber and lyft are both going to crash since self driving cars aren't coming anytime soon to save them, GM needs to short sell it's lyft shares asap.

[SIGSEGV]

The worst thing about Uber/Lyft drivers is how many are scared to take Lower Wacker because their GPS's don't work down there. Maybe they should learn the basic geography of the city they drive in...

[Pedestrian]

Originally Posted by The North One

uber and lyft are both going to crash since self driving cars aren't coming anytime soon to save them, GM needs to short sell it's lyft shares asap.

Naw. I think they are going to remain like airlines. As of a couple of years ago (not sure if it's still true) airlines collectively have a net loss from the day the first commercial plane took off. Some years they make some money but other years they lose a lot and it all nets out to a loss.

But they remain in business and keep going. Lyft and Uber, like commercial flying on many routes, are a huge bargain for users and they will have all the business they can handle as long as they can get new shots of capital periodically (such as by selling more shares or debt).

Might as well admit I've asked my broker for a few Lyft shares. If I get them, I'm going to sell them as soon as I can without pissing him off (15 days or more).

[ocman]

Services like Lyft and Uber are too valuable to the way a lot of people get around cities work now, especially LA and SF. Those companies themselves may fail, but another iteration will take its place. It’s just a superior model to the taxi system which could never work in LA/SF.

[dave8721]

Originally Posted by ocman

Services like Lyft and Uber are too valuable to the way a lot of people get around cities work now, especially LA and SF. Those companies themselves may fail, but another iteration will take its place. It’s just a superior model to the taxi system which could never work in LA/SF.

But what if its a model that is impossible to make profitable? Would governments have to take it over and call it something like "public transit"? Things like mass transit are essential to cities but would never turn a profit, hence their being run by public agencies.

[the urban politician]

Taxicab companies are probably loving this.

I'm glad that Chicago doesn't depend on Uber (both for jobs and transportation) as much as so many of these "tech bro" cities.

If Uber collapses tomorrow, it will be like "meh"

[iheartthed]

Originally Posted by Pedestrian

Let them do whatever they want. There are plenty of people wanting to do this work and if some portion of them aren't happy with what they are making, they should do something else.

Uber and Lyft are both losing money as they battle over market share. Lyft subsidizes each ride by about $2 out of pocket. So they have no money to hand to drivers and if one of them raised prices unilaterally to get more per ride they would lose business massively to the competition. So the deal for drivers is what it is. It is up to them to figure how to make more per ride by cutting their own costs or find another source of income. Actually, if some of them do quit, the balance of supply (of drivers) and demand for rides would tilt more in favor of the companies and drivers and maybe they could raise prices a bit. But as things, are, anytime I turn on the app in front of my residence in SF there are 6 or 8 drivers within a couple of blocks and generally I can get picked up in 2-3 minutes. That means the drivers have no leverage to get paid better.

Drivers are equally as important to market share as riders. They need to be able to balance both if they're going to survive.

Profitability isn't really a huge issue for them now. Amazon didn't start turning a profit until about 4 years ago.

[iheartthed]

Originally Posted by the urban politician

Taxicab companies are probably loving this.

I'm glad that Chicago doesn't depend on Uber (both for jobs and transportation) as much as so many of these "tech bro" cities.

If Uber collapses tomorrow, it will be like "meh"

Uber won't collapse because that box has already been opened. If Uber collapsed then someone else would quickly swell up to fill the void.

[Pedestrian]

Originally Posted by ocman

Services like Lyft and Uber are too valuable to the way a lot of people get around cities work now, especially LA and SF. Those companies themselves may fail, but another iteration will take its place. It’s just a superior model to the taxi system which could never work in LA/SF.

Mostly we agree but certainly taxis could work if they (1) got a propper mobile app like Lyft and Uber have that lets you call a cab, tells you how much the trip will cost and shows you where your cab is and when it should arrive; (2) did away with artificial and far too restrictive limits on the number of cabs; and (3) let you prepay with a credit card so no cash required.

It's those 3 things that opened a space for Lyft and Uber: There were too few cabs and the ones there were all clustered around downtown hotels waiting for trips to the airport, and if you called the cab dispatch you had no idea when or IF your cab was coming or how much it would cost--and when you did arrive you had to fish cash out of your pocket.

[the urban politician]

Originally Posted by iheartthed

Uber won't collapse because that box has already been opened. If Uber collapsed then someone else would quickly swell up to fill the void.

Of course, but that entire space just may not end up being as profitable as we once thought. That especially occurs if we lose the economies of scale that benefit an entity as massive as Uber is.

[Pedestrian]

Originally Posted by the urban politician

Of course, but that entire space just may not end up being as profitable as we once thought. That especially occurs if we lose the economies of scale that benefit an entity as massive as Uber is.

What makes it unprofitable is COMPETITION. If one of the competitors drives the other one out of a market, the remaining one can raise prices (and drivers' incomes) and be highly profitable. So they won't both go away but it remains to be seen if one of them will come to be so dominant the other completely folds; or perhaps Uber will dominate some markets, Lyft others.

One difference between them is that Uber is trying to find other sources of revenue to allow it to continue the price war with Lyft. Uber Eats is one example as are their overseas efforts as in their just-announced purchase of a Middle Eastern car share outfit. Lyft may have to do something similar or give up though it does have the advantage of not carrying the negative image Travis Kalanik created for Uber.

[iheartthed]

Originally Posted by the urban politician

Of course, but that entire space just may not end up being as profitable as we once thought. That especially occurs if we lose the economies of scale that benefit an entity as massive as Uber is.

The space will be profitable because it has consolidated, and will continue to consolidate. Uber and Lyft are fighting in this space for what Peter Thiel calls the "last mover advantage". One will win and the other will be the also-ran. But the livery industry will probably not ever again in our lifetime be fragmented again into locally focused entities.

[badrunner]

They'll make their money by selling users' dining/shopping/traveling preferences and location tracking data to advertisers, if they're not doing this already.

[edale]

Originally Posted by iheartthed

The space will be profitable because it has consolidated, and will continue to consolidate. Uber and Lyft are fighting in this space for what Peter Thiel calls the "last mover advantage". One will win and the other will be the also-ran. But the livery industry will probably not ever again in our lifetime be fragmented again into locally focused entities.

Even is Uber is able to drive all the other ride share companies out of business, they will still face competition as long as people own cars and public transit continues to exist. It's not like people will continue using Uber like they do today if fares increased significantly. People might continue to take it to special destinations like the airport or something, but will find other ways to get to most of their destinations.

[Pedestrian]

Originally Posted by edale

It's not like people will continue using Uber like they do today if fares increased significantly. People might continue to take it to special destinations like the airport or something, but will find other ways to get to most of their destinations.

The elasticity of demand, which is what you are describing, is obviously the challenge for them. But they only need a few more dollars per ride to be profitable. In San Francisco that might take the typical ride within the city--not counting airport trips and transbay trips--to maybe $10 from $8 or so. I don't think that would make me stop using them. Maybe I might be willing to wait a few more minutes at bus stops but when I have to get somewhere in a hurry it definitely won't stop me.

Investors who attended (the IPO "roadshow") expressed concerns about the company’s path to profitability, given that Lyft’s $911 million loss last year was the biggest of any other U.S. startup in the 12 months preceding its IPO, according to S&P Global Market Intelligence.

The company has worked to assuage these worries by emphasizing how it is working to get costs down, some people said. One way it plans to do so in the near-term is by lowering insurance costs—currently one of the biggest expenses for Lyft—as it gains greater scale, the company’s executives told investors in presentations. Lyft executives also outlined that longer-term, the adoption of autonomous vehicles could be a boon to its bottom line.

https://www.wsj.com/articles/lyft-to...s&page=1&pos=4