New legislation raised wages for delivery drivers in New York and Seattle, but unintended consequences have followed. Despite a new deal for Uber and Lyft to remain in Minnesota, new rideshare companies are expanding there.
In Massachusetts, Uber and Lyft drivers will see significant pay raises, but concerns about negative side effects remain. We break it all down for you.
Are Wage Increase Laws Crippling the Food Delivery Industry? 🍕📉
SOURCE – The Wall Street Journal (No paywall)
Delivery drivers in New York and Seattle got higher wages via legislation, but now they’re seeing fewer orders, according to a recent story from The Wall Street Journal.
Apps raised fees to offset pay increases in these cities. As a result, the higher fees and reduced shifts are causing drivers to protest, while small businesses suffer from fewer deliveries and increased customer complaints.
- New York City’s new wage laws require companies to pay couriers at least $19.56 per hour before tips, up from an average of $5.39 per hour before the rules went into effect.
- Uber Eats orders in Seattle dropped 45% last quarter after the company imposed a $4.99 fee per order to cover the new pay requirements.
- DoorDash reported a 1% reduction in overall orders in Q1 2024 due to the new laws in Seattle and New York City.
- Seattle officials are considering rolling back the new earnings standard after backlash from drivers, restaurants, and consumers.
Your take: Drivers, what are your thoughts? Would you exchange overall order volume and reduced numbers of shifts for guaranteed higher pay? Let us know by replying to this email! Your feedback may be included in a future edition of the newsletter.
New Rideshare Companies Continue to Expand in Minneapolis, Despite Uber and Lyft’s Dominance 🚗📈
SOURCE – Star Tribune
Several startup rideshare companies are moving ahead with their expansion plans in Minnesota despite a recent law mandating higher wages for drivers and Uber and Lyft staying in the state.
Although the dominant rideshare companies have over 10K drivers in the state, many drivers are signing up with these new companies due to the promise of increased flexibility and better earnings.
- A new law passed in Minnesota requires minimum pay of $1.28 per mile and 31 cents per minute for all TNC rideshare companies, guaranteeing a minimum wage for drivers starting in December.
- MyWeels has 250 drivers and plans a “preferred driver” program while addressing slower growth than anticipated. Wridz is onboarding drivers and awaiting approval to operate in St. Paul and at the Minneapolis-St. Paul International Airport. Moov has signed up more than 700 drivers and is adopting a local-focused approach, partnering with the University of Minnesota for internships.
Uber, Lyft Reach Settlement With Massachusetts on Driver Pay and Benefits, But Concerns Remain 🚗😬
SOURCE – Business Insider (No paywall)
Uber and Lyft drivers in Massachusetts are set to receive a significant pay raise, but some remain concerned about potential negative side effects.
A settlement agreement signed by the rideshare companies with the state mandates a minimum pay rate of $32.50 per hour for active ride time, paid sick leave, improved accident insurance, and health plans for drivers working over 15 hours per week.
- Massachusetts drivers will remain independent contractors, lacking some protections afforded to employees, as noted by our very own Sergio Avedian, senior contributor at The Rideshare Guy, who was quoted in the article. Sergio highlighted that while the settlement benefits many drivers, it might negatively impact top earners and increase competition, reflecting driver sentiments gathered from surveys.
- Despite the increased pay, the new rate only applies to time spent actively driving passengers, effectively reducing the hourly wage to $16.25 when accounting for wait times.
- The settlement can be seen as part of a broader trend of legislative efforts across states aimed at safeguarding gig workers’ pay and benefits, illustrated by similar agreements signed in Minnesota.
Uber Rolling Out Driver Safety Scores Ahead of September Launch 📊🚗
SOURCE – Show Me The Money Club on RSG YouTube
Uber has started calculating driver safety scores before its official September rollout, according to Show Me The Money Club on The Rideshare Guy YouTube channel.
These scores, which are already being beta tested in certain markets, will become a critical part of Uber’s “Advantage Mode” program, which will incentivize drivers for safer driving. Drivers will need a score of 75 or higher to qualify for Advantage Mode, starting September 2, 2024.
- As noted by Harry on X, Uber is partnering with Cambridge Mobile Telematics on the feature.
- Some drivers have noticed anomalies in their driving evaluations, such as being flagged for not using a phone holder — an issue they hadn’t encountered in years of ridesharing.
- Sergio and Chris say the new system will likely help Uber negotiate better insurance rates by demonstrating responsible driving within its fleet.
Small, but Mighty: Why It’s Still Worth Delivering for Grubhub 🚚☕
SOURCE – Quartz
Despite holding only 8% of the market, Grubhub has strategically positioned itself to outmaneuver larger rivals and land contracts with major brands, like Starbucks, Amazon, and Albertsons, according to a new analysis from Quartz.
Through these partnerships, delivery drivers benefit from a steady stream of orders placed through the partners’ native apps and websites, offering a more reliable workload.
- Grubhub’s ability to adapt and offer customized services has allowed it to secure significant partnerships, demonstrating the competitive advantage of smaller, more nimble players in the delivery space.
- Greg Buzek, president and chief AI officer at IHL Group, explains that smaller companies like Grubhub are more flexible and can offer tailored services, giving them an edge over larger competitors like Uber Eats.
QUICK HITS
🚗🤖 Harry just got officially onboarded on Waymo and compared rides between the service and Uber in Los Angeles. While Waymo was more expensive ($29 vs. $22) and had a longer ETA (7 min vs. 3 min), he found the experience comparable, noting that Waymo’s luxury vehicle might justify the higher cost for some. – @THERIDESHAREGUY ON X.COM
📉🚗 A screenshot shared on Facebook highlights significant driver oversaturation on Lyft in the Philadelphia market this week. With so many drivers competing for minimum fare rates, is driving rideshare still worth it in 2024? – @BLAZNLUKE420 ON X.COM
🌍🎉 Uber has surprisingly been included in Statista’s list of the world’s 500 most sustainable companies, securing the No. 192 spot despite its controversial history of worker exploitation and impacts on public transit. – SF GATE
Must Listen Or Watch RSG Content
Here are this week’s featured podcast episode and YouTube videos:
- RSG257: Rideshare Insider’s Take on DiDi, Uber and InDrive in Latin America
- Uber/Lyft Is Bridging The Gap Between Main Hustles
- Uber and Lyft Blaming Each Other As Drivers Get LOCKED OUT Of App
- Uber ADVANTAGE Vs STANDARD Mode With Driving Scores
- The Rideshare Guy en Español
- Make sure you Subscribe so you don’t miss out on future conversations and interviews!
