Contents:

6 min read

    6 min read

    In this week’s roundup, senior RSG contributor John Ince covers how drivers could potentially beat Uber at their own game, plus how price-conscious passengers are affecting drivers in New York City.

    doordash

    How Drivers Can Beat Uber at Its Own Game [New York Times]

    Sum and Substance:  By forming their own corporation, ride-share workers could win leverage over companies that refuse to consider them employees. …

    Uber and other ride-sharing companies are locked in all-out battle with their drivers over what might seem like a fairly straightforward question: Are they employees of the companies or not? …

    The line between “employee” and “independent contractor” status is dangerous territory for drivers, who have undertaken several recent collective actions protesting the company and its working conditions …

    My Take:  This NY Times op ed piece by Boston College Law Professor Hiba Hafiz makes an interesting point, but I don’t see this ever going beyond the op ed stage. Like many academics, the article’s author doesn’t seem to realize just how disorganized drivers are. Drivers can’t even organize a truly effective protest much less organize themselves into a corporation or any other legal structure.

    The real impediment here is that drivers don’t have the communication tools that Uber / Lyft have. The TNCs have the email and phone lists. Drivers don’t… and for that reason this proposal is just a pipe dream.

    Uber drivers and other gig workers in California could get better pay under proposed law [USA Today]

    Sum and Substance: SAN FRANCISCO – Gig economy workers are increasingly ubiquitous, shuttling us to appointments and delivering our food while working for Uber, Lyft, DoorDash and others.

    Thanks in large part to the app-based tech boom emanating from this city, 36% of U.S. workers participate in the gig economy, according to Gallup. But not all gigs are created equal, Gallup adds, noting that so-called contingent gig workers experience their workplace “like regular employees do, just without the benefits of a traditional job – benefits, pay and security.”

    That could soon change. California lawmakers are weighing what is considered a pro-worker bill that, if passed into law, would set a national precedent that fundamentally redefines the relationship between worker and boss by forcing corporations to pay up.

    Big companies such as Uber and Lyft, as well as some workers concerned about losing the flexibility inherent in their gig jobs, have raised concerns about the bill. But supporters of Assembly Bill 5, which has passed the Assembly and awaits Senate approval before it can go before the desk of Democratic Gov. Gavin Newsom, say it’s time to end an exploitative relationship and start providing better pay and some benefits to gig workers.

    My Take:  If this article is right, then we are truly at an inflection point in this industry. Slow but surely this bill is working its way through the California legislature and, like most legislation, the wording is in a constant state of revision as negotiations proceed. The bill in this extra strength form represents such a fundamental shift that we really don’t know if the TNCs will survive this shift.

    If the companies don’t survive, it’s not because the drivers were too greedy. It’s because the companies and their investors never really thought through their business model.

    Uber, Lyft Ridership Pace Declines in NYC After Fares Rise [Bloomberg]

    Sum and Substance: Rising prices among New York City’s major ride-hailing apps may be deterring the most price-cautious passengers.

    Uber Technologies, Inc. completed 15.9 million trips in May in NYC — that’s down 8% from March, according to a Bloomberg News analysis of data from the city’s Taxi and Limousine Commission. At the same time, Lyft Inc. made 4.7 million trips, which is 17,000 fewer than its peak in March. The slowdown comes nearly six months after city officials passed the nation’s first minimum wage rule for drivers of the companies, pushing up prices for passengers as a result.

    Slowdown or Blip? – Following the wage rule, both Uber and Lyft announced that riders will see increased fares as a result. The rise in prices appears to be affecting the company’s most price-sensitive consumers. For Uber, the impact of increased fares has been most visible in the growth of pool trips — the most affordable trip option — where one shares a vehicle with other riders, according to an Uber spokesperson.

    During a May earnings call, Uber CEO Dara Khosrowshahi acknowledged the price hikes affect trip numbers but said the business remains resilient.

    My Take:  The big market question hovering over the industry has always been this – just how price sensitive customers are, and now we have a data point. Yes some passengers are price-sensitive – just as Uber and Lyft have been saying.  This fear, that passengers will find alternatives to the heavily subsidized fares should the level of subsidy be decreased, appears to have been real.

    This fear of losing passengers and declining growth rates has been the underlying rationale behind all the price cuts that have made this gig so much less attractive. So if passengers leave the platform, how does that affect profitability? That’s the next big question here – the one that determines just how long these companies can sustain the illusion that they’re sound businesses.

    Here’s what actual Uber drivers have to say about ‘Stuber’ [Mashable]

    Sum and Substance:  A movie that featured the ride-hailing app Uber prominently came out over the weekend, and even its name strongly hints that Uber plays an important role in the story.

    Stuber stars Kumail Nanjiani (he’s in the satirical HBO show Silicon Valley) as an Uber driver named Stu who goes on an epic adventure when a police detective played by Dave Bautista gets matched to his ride. Of course, the cop uses the Uber and Stu to track down a killer. Drama ensues — all while in an Uber.

    So there’s more to the plot than just ride-sharing, but still, real Uber drivers might notice some problems with how their livelihood is portrayed on the big screen.

    The Rideshare Guy blog founder Harry Campbell was invited to the premiere last Wednesday in Los Angeles, but he said he wasn’t consulted in the making of the movie or for any advice to make it more realistic. Uber said it wasn’t contacted for the film and didn’t have any comment, now that it’s out in theaters.

    “It was definitely cool to see [an Uber driver] featured so prominently in a mainstream movie.”

    Campbell mapped out what the film gets right and very wrong about driving for Uber. He blogged about the film’s accuracy, pointing out problems with the cancellation policy, deactivation, rating system, and destination inputs. He also called out Stu for driving a Nissan Leaf, which would need to be recharged too often to make sense for an Uber driver. Also every time he received a one-star rating Stu was alerted, which doesn’t happen in real life.

    In an email to Mashable, Campbell commended the movie for showing a realistic passenger-driver relationship. “I think every Uber driver can relate to the passenger who gets into the front seat but then stays silent, or the drunk guy on the cusp of vomiting,” he said.

    My Take:  Nice to see our own Harry Campbell get such a prominent role in this review.  Have you seen the movie?  What did you think of it?

    Readers, what do you think of this week’s round up?

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    -John @ RSG

    John Ince

    John Ince

    John Ince is a former Fortune reporter and Wall Street banker. He has about 1,000 rides under his belt driving part time for Uber and Lyft.  He’s writing a book about his experiences entitled:  Travels With Vanessa:  A Rideshare Driver Tries To Make Sense of It all - For a sneak peak visit the link above.

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