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7 min read

    7 min read

    City councils have a lot of power to say what can and cannot happen within city limits, and we are beginning to see what this type of local control could look like in Los Angeles, CA. RSG senior contributor Sergio Avedian outlines the latest proposal from the LA City Council to regulate rideshare drivers.

    Safety of passengers as well as drivers comes up every time either a passenger or a driver gets killed. Unfortunately, Uber and Lyft have not been able to come up with a concrete solution to this problem. Granted, it is a very difficult task to achieve considering the sheer scale of rideshare industry these days. Close to 10 million rides take place on a daily basis on both platforms. Guaranteeing safety 10 million times is likely impossible – but local governments want to see if they can help.

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    Local Regulation of Rideshare Drivers Sought by L.A. City Council Committee

    A Los Angeles City Council committee (Transportation Commission) is exploring ways to more closely monitor Uber and Lyft drivers at the local level. The move comes after three L.A. women, who alleged they were sexually assaulted by men posing as Uber drivers, filed a lawsuit against Uber, claiming the company did not do enough to warn them.

    Officials with the Los Angeles Department of Transportation (LADOT) said that the explosive growth of ridesharing companies has been very fast and difficult for the city government to keep up with. They also say that the companies are unregulated and that there has been increased concern about rideshare congestion, as well as crimes committed by Uber and Lyft drivers.

    Jarvis Murray of the Los Angeles Department of Transportation, who is in charge of the For-Hire Regulation and Policy Department, said the growth of Transportation Network Companies, or TNCs, has been fast and difficult for the city government to keep up with. “Their rapid rise – and essentially unregulated rise – have led to increased congestion, as well as an increased concern related to crimes committed by TNC drivers, including sexual assault. Despite these issues, local jurisdictions have been unable to obtain any data related to TNC operations, drivers or even driver conduct,” he said.

    Los Angeles City Councilman Mike Bonin, chair of the committee, said TNCs looked enticing a few years ago, but he now has many reservations about the companies and that “it’s not clear if it’s a net benefit to Los Angeles or our mobility objectives.”

    The California Public Utilities Commission is in charge of regulating ridesharing companies but has thus far issued no regulations on the issue. It is estimated that there are over 120,000 drivers for Uber and Lyft in the Los Angeles area. The committee is considering local tracking and regulation of drivers, including through a driver registration program and expanding business license requirements.

    One issue many have with Uber and Lyft and other companies is that they may not do a thorough enough job screening drivers. Drivers typically undergo only a minimal background check and do not have to pass drivers’ tests. This can lead to reckless drivers or even criminal drivers who prey on passengers.

    Rideshare Drivers United Steps In

    Rideshare Drivers United, a local drivers group, has rapidly grown in size to the largest driver-only (6000 strong) organization in the country. I received this email from them the day before the Los Angeles City Council meeting, granted it was on short order but I decided to tag along.

    I met Nicole Moore (Organizing Member of RDU) at the City Hall steps. During a short interview, she mentioned that they would take this opportunity to talk to the Los Angeles City Council members about the difficulties Los Angeles rideshare drivers are facing. They would also reiterate their backing for the California Senate bill AB5 and ask the council for their support of the bill.

    RDU has been able to set up protests, and they were responsible for the 24 hour strike in May of 2019 before Uber’s massive IPO.

                                      RDU Members at L.A. City Hall steps

    RDU Members at L.A. City Hall steps

     

    RDU members inside the chambers

    RDU members inside the chambers

    Five members, including Nicole Moore were allowed to make a minute long public comment during the session. Before the council session started, they were handed a piece of paper and the mood in the room became very upbeat – I even heard a few cheers.

    When I got a hold of this document, I discovered the reason for jubilation. It was a Los Angeles City Council resolution sponsored by two councilmembers in support of the CA Senate bill AB5. I took a picture of it and I apologize if the below image is blurry.

    L.A City Council Resolution in support of AB5

    L.A City Council Resolution in support of AB5

    This is just a resolution by the Los Angeles City Council. For such short notice, I was surprised by the RDU members who showed up and sacrificed their earnings for the morning rush hour. This is a group to follow – they have a clear agenda and they want to be heard!

    City of El Monte (Los Angeles County) Council Drafting a Law for Rideshare Drivers to Be Paid $30/Hour

    In Los Angeles County, where the minimum wage is currently $14.25 an hour, studies suggest that Uber and Lyft drivers often make far less. In El Monte, an industrial city east of Los Angeles, the city council just unanimously voted to change that, telling city officials to begin drafting a law that would guarantee drivers a minimum of $30 an hour.

    While other cities like NY have set minimum wages for rideshare drivers, this would be the highest in the country, and it comes after pressure from the Mobile Workers Alliance, a project from the Service Employees International Union, Local 721. $30 per hour could be considered lavish, but it’s calculated to provide drivers with $15 an hour to cover the costs of operating their cars and another $15 in take-home pay.

    Coral Itzcalli, an organizer for the union, says that drivers have to cover the cost of gas, frequent oil changes, rideshare insurance and other expensive maintenance due to thousands of miles logged by rideshare drivers. Uber and Lyft have done a fantastic job shifting all those costs to their drivers. How many drivers save enough money to replace their car when its deemed junk after a couple of years?

    “California is one of the most expensive states to live in,” says Itzcalli. “Housing is very, very expensive. Many of these folks are just one paycheck away from being homeless. We already have a homeless crisis. It is something that we all feel is urgent, because we cannot continue to allow these companies to drive our communities to the ground.”

    As reported in FastCompany, city officials will have 120 days to develop the new ordinance, which will likely require another vote.

    Lyft, in response, offered a boilerplate statement that didn’t address El Monte specifically and wouldn’t say what they calculate the hourly rate of drivers in El Monte. The company offered some broader figures, including:

    • In California, drivers makes $30 an hour for “booked hours,” the time between when a driver books a trip and when they drop the passenger off.
    • In the greater Los Angeles area, the company says drivers spend roughly 90% of their time “booked,” which would mean a roughly $27 per-hour wage before expenses like gas and depreciation.

    El Monte is a very small city, push comes to shove Lyft and Uber will suspend operations in that area. Come on Los Angeles, follow NY’s lead!

    What do you think? Will other cities follow NY TLC minimum wage rules like El Monte? Do you support rideshare drivers making $30 per app on hour?

    -Sergio @ RSG

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    Sergio Avedian

    Sergio Avedian

    Sergio has been driving Uber and Lyft for about three years. He has over 4500 rides on both platforms, mostly on Uber. Sergio has a degree in finance, and worked on Wall St. for over eighteen years. In his free time, he still trades stocks and derivatives for himself and a few friends. He is also a PGA certified golf instructor, teaching golf is his passion. Sergio is married with two wonderful kids who take the rest of his afternoons/weekends between their soccer practices and golf tournaments.