This week’s round up is a little bleaker than normal, but asks many important questions about the future of the gig economy – what has it promised us, and what does it mean when some people profit immensely while others are driven to despair? Also, senior RSG contributor John Ince covers the life cycle of being a rideshare driver, and a new Lyft partnership.
A Driver’s Suicide Reveals the Dark Side of the Gig Economy [New York Times]
Sum and Substance: Doug Schifter, a New York livery driver, said he killed himself to illuminate how ride hailing services have devastated taxi workers financially. …
The economic hardship that Uber and its competitors had inflicted on conventional drivers in New York and London and other cities had become overwhelming. For decades there had been no more than 12,000 to 13,000 taxis in New York but now there were myriad new ways to avoid public transportation, in some cases with ride-hailing services like Via that charged little more than $5 to travel in Manhattan.
In 2013, there were 47,000 for-hire vehicles in the city. Now there were more than 100,000, approximately two-thirds of them affiliated with Uber.
While Uber has sold that “disruption” as positive for riders, for many taxi workers, it has been devastating. Between 2013 and 2016, the gross annual bookings of full-time yellow-taxi drivers in New York, working during the day when fares are typically highest, fell from $88,000 a year to just over $69,000. Medallions, which grant the right to operate a taxi in New York City, were now depreciating assets and drivers who had borrowed money to pay for them, once a sound investment strategy, were deeply in debt.
On Monday morning, Doug Schifter, a livery driver in his early 60s, killed himself with a shotgun in front of City Hall in Lower Manhattan, having written a lengthy Facebook post several hours earlier laying out the structural cruelties that had left him in such dire circumstance. He was now sometimes forced to work more than 100 hours a week to survive, he said; when he had started out in the 1980s, a 40-hour week was fairly typical.
He blamed politicians — mayors Michael R. Bloomberg and Bill de Blasio, Gov. Andrew M. Cuomo — and their acquiescence to the rich for permitting so many cars to flood the streets. He blamed the Taxi Commission for the fines and hassles it imposed. He had lost his health insurance and accrued credit card debt and he would no longer work for “chump change,’’…
In response to Mr. Schifter’s death, Mayor de Blasio showed little sensitivity to the psychic harms of economic deprivation. “Let’s face it, for someone to commit suicide there’s an underlying mental health challenge,” he said. Uber did not respond to a request for comment.
For taxi drivers staring down an even bleaker future of driverless cars at a moment when Washington considers a weekly paycheck bump of $1.50 an occasion to break out the layer cake, it is hard to see where the metaphoric Prozac will come from.
My Take: Disruptions, like those wrought by Uber and Lyft, come with a cost. For every rideshare driver who’s earning extra income, there’s a taxi driver who’s earning less. And so what is society to do? Do we turn a blind eye and deaf ear to the plight of those who have suffered from the success of those who are creating the “sharing economy”?
Travis Kalanick, Uber’s recently deposed CEO, just sold about a third of his stock in the company for about $1.4 billion. Meanwhile, taxi drivers, medallion owners, their financiers are all feeling the financial pain.
The line in this article that sums it all up for me is from Mayor de Blasio, “Let’s face it, for someone to commit suicide there’s an underlying mental health challenge,” he said. Uber did not respond to a request for comment.”
To deny the clear connection between economic health and mental health is a perfect example of self-deception. The victim here was driving 100 hours a week to make ends meet and had driven more than 5 million miles in his career as a taxi driver. Meanwhile, TK is down in Miami, partying with beautiful women, squandering some of the billions he just accumulated on his stock sale.
Scandal-plagued Travis Kalanick back to his partying ways [Page Six]
Sum and Substance: Ousted Uber CEO Travis Kalanick was back to his partying ways in Miami over the weekend after testifying in a California court just a few days earlier. The tech exec — who was criticized in his CEO days for giving his staffers crude frat-guy party tips for a Miami retreat — was spotted on Friday at a South Beach club with a table of pals till 4 a.m., ordering up about $10,000 worth of booze and surrounded by beautiful women.
Kalanick — who on Tuesday took the stand in the Waymo v. Uber trade secrets trial in San Francisco — seemed in a celebratory mood by Friday night, spies said. “Kalanick was with a large group and enjoying himself at the nightclub,” said a witness at hot spot Rockwell.
Kalanick knows a thing or two about partying in Miami. In a controversial memo sent to Uber employees back in 2013 — known infamously in tech circles simply as the “Miami letter” — Kalanick advised staffers: “We do not have a budget to bail anyone out of jail. Don’t be that guy,” as well as, “Do not have sex with another employee UNLESS a) you have asked that person for that privilege and they have responded with an emphatic ‘YES! I will have sex with you,’ ” and “There will be a $200 puke charge.”
Last year he was caught on video in an embarrassing verbal tirade with an Uber driver, and resigned as CEO in June after an investigation uncovered a culture of sexism and bullying at the firm. Reps for Uber and Kalanick did not get back to us.
My Take: I see TK as a sign, a symptom and a symbol of a societal tragedy. How is it that we’ve created a system that economically empowers people like TK – people who seem to operate without any appreciable trace of integrity while we devastate those who make the success of the TKs of the world possible?
We’ve created a world where it’s perfectly acceptable to ignore anything but your own self-interest. As Uber’s guiding force, TK was fatally flawed by his inability to control a voracious appetite for power and pleasure – at the expense of those who were empowering him. TK’s now infamous line, “Some people refuse to take responsibility for their own shit,” simply ignores the broader consequences of what he’s doing.
Party on, TK. I’m sure the beautiful women on your left and your right will love you for it. Meanwhile the divisions in society between rich and poor grow ever more pronounced. Uber drivers now sleep in their cars at night, while TK and his merry band of early investors celebrate the home run they just hit with a major liquidity event in the Softbank sale of stock. Another bottle of Dom Pérignon please.
Confessions of an Uber driver: How I lost and found my soul [SF Gate]
Sum and Substance: Uber provides incentives to lure drivers, but not all of them think the sacrifices are worth the rewards. My mother-in-law first suggested I try driving for Uber. It seemed a dubious proposition — living in Novato, I suspected the economics of driving to San Francisco (where the rides are) might not make it very lucrative. And I shared the opinion that Uber drivers can’t get a job doing anything else. Because that describes me, I became an Uber driver.
As I developed routes and strategies, I loved that Uber was so flexible: I could start and end at any time, and go wherever I chose. Early mornings and evenings were the busiest and most profitable times to drive. My lifestyle skews toward mornings, so I drove the a.m. rush hour. I needed to be on the road by 6 to miss the traffic. If I ran late, the consequence was a soul-crushingly slow commute, and the realization that only drivers who made it to San Francisco were making any money.
As I got better at it, Uber began offering weekly bonuses. One week, Uber dangled a particularly juicy carrot: Complete 80 trips a week, and make $200 extra — four weeks in a row, another $1,000. Being in a financial hole, I committed myself to the incentive. Because I was averaging about 60 trips a week, I had to expand my hours, and six days a week turned into seven. I drove 16 days in a row to get the $1,800. The money saved my bacon, but it also established a pattern that would have costs I wouldn’t realize until later. …
I ran numbers to see what I was actually making. Uber’s skill in carrot-wielding revealed itself here as well — I averaged around $16 an hour. I began to see myself as a small cog in a very big machine, one in which drivers weren’t really human beings, but a commodity to be replaced, like a burned-out bulb.
The best part of Uber — the ability to turn the money on and off — became the worst part. If I considered taking a day off, I asked myself if it was worth leaving $140 on the table. Usually, it wasn’t. So I continued.
My days got bleaker. I started cussing out drivers, not caring if passengers rated me lower. My wife began to harp on my constant crankiness, making it worse.
One Saturday, I picked up a passenger in San Francisco. Looking for oncoming traffic and seeing none, I turned and pow! — I was in an accident….
My car now too mangled for Uber, I headed back to Marin. I was on the Golden Gate Bridge where it occurred to me that I don’t need to do this anymore. So I decided to stop.
Ever since, I’ve experienced an exhilarating rush of freedom. I no longer have a source of income, but I’m not obsessed with it anymore. My wife feels she has her husband back.
For a long time, I felt like a hamster on a wheel. I’m happy to report that I’m enjoying life as a free-range hamster.
My Take: I’m sure many drivers will identify with this personal story of someone who lives and drives in my home territory. His metaphor of the hamster running on the treadmill seems especially apt for the automated management techniques that Uber uses to motivate its drivers. I’m glad this driver has gotten his freedom back … but I wonder how he’s making ends meet now.
Lyft shops for drivers on used-car lots [Automotive News]
Sum and Substance: Lyft is now partnering with used-car dealerships to get more drivers on the road.
The ride-hailing giant announced this month that it is teaming with the National Independent Automobile Dealers Association, a trade group for independent used-vehicle dealers, to pair potential drivers with cars. Lyft will pay dealerships for successful references, let drivers’ earnings go directly to vehicle payments and offer a service dubbed Lyft Concierge to let dealers summon a ride for customers whose vehicles are being serviced.
The partnership is part of Lyft’s strategy to continue booming growth by putting potential drivers in cars they can afford. For dealers, it lets them experiment with the retail model by allying with a Silicon Valley giant.
Editor’s Note: Buying a brand new car, given how quickly they depreciate, has never been a good idea for rideshare drivers. Renting or leasing can also be expensive, especially if the terms of your lease limit the number of miles you can drive.
Enter: used car dealerships. As the article points out, 3 to 4 year old cars often make much more financial sense – plus, those cars are usually in good enough shape to pass Lyft inspections and be new enough to qualify to drive. It seems to make sense for Lyft to partner with used car dealerships, but will it make sense for drivers?
Readers, what do you think of this week’s round up?
-John @ RSG
Latest posts by John Ince (see all)
- Is a Major Change in the Gig Economy Around the Corner? - February 16, 2019
- 7 Reasons Why Uber and Lyft Drivers Are Quitting Rideshare! - February 11, 2019
- The Letter That Forced Kalanick to Leave Uber - February 9, 2019