Uber drivers across the pond are going on strike, but would that work in the US? Plus, senior RSG contributor John Ince covers how Lyft is pursuing an IPO and how they’re helping drivers pitch their entrepreneurial ideas in this week’s round up.
UK Uber drivers to stage 24 hour strike over pay and conditions [Techcrunch]
Sum and Substance: A UK union that represents the interests of Uber drivers has called a 24 hour strike for tomorrow.
Ride-hailing giant Uber may not be comfortable thinking of the people who do the driving on its platform as workers but, in 2016, a UK employment tribunal ruled against its classification of a group of then current and former drivers as independent contractors after they brought a legal challenge; and again in 2017 when Uber lost its first appeal against the tribunal ruling….
Today one of the unions that campaigns on behalf of individuals providing labor on so-called ‘gig economy’ platforms, the Independent Workers Union of Great Britain (IWGB), announced the strike action by Uber drivers.
It said Uber drivers are demanding an end to unfair deactivations (described by the union as ‘de facto dismissals’); an increase in fares to £2 per mile (vs the current rate of £1.25p/m in London); a 10% reduction in commissions paid by drivers to Uber (currently 25% for UberX); and calling for Uber to immediately apply the tribunal judgement and implement “employment conditions that respect worker rights for drivers, including the payment of at least the minimum wage and paid holidays”.
My Take: Ridesharing is a messy business and for the life of me I can’t figure out why investors are still throwing so much money at this space. Uber is losing money and drivers are striking because they’re barely making minimum wage. Nobody is happy in this picture, except the early investors and employees that cashed out their investment in the Softbank deal.
The situation is getting worse, not better, as regulators sink their teeth into the ridesharing giants, as drivers get organized, and as the limitations of self driving cars become more apparent with each iterative step. I’m not sure this industry is going to have a happy ending… either for the companies or the drivers. (See article below)
Uber Driver’s Death Marks Seventh For-Hire Driver Suicide Within a Year [The New York Times]
Sum and Substance: About two dozen people gathered outside a Washington Heights subway station on Sunday afternoon to remember an Uber driver who became the seventh for-hire driver in New York to commit suicide within the last year. The mood at the vigil turned from somber to anger in less than 30 minutes.
Fausto Luna jumped in front of an A train on Sept. 26 at the 175th Street and Fort Washington Avenue station. He is the first Uber driver this year to commit suicide in New York City. The other six drivers drove yellow taxi cabs or for livery or black car services.
As ride-sharing vehicles have upended the taxi market in New York, taxi drivers have been hit with increasing debt despite working longer shifts, leading to incredible stress and depression for some. But those financial hardships are not limited to cabdrivers. Uber and other ride-hail drivers have also complained about low pay and unending competition as more people sign up to drive…
My Take: The words that ring out to me in this article are “prison of poverty” because that’s exactly what it is. Drivers, whether they be cab drivers or rideshare drivers, are on a treadmill, driving beyond the limits of their endurance attempting to keep the numbers working in their life – the rent payments, the car payments, food, car repairs etc.
The hollow statements from Uber’s marketing department don’t do much good to alleviate the situation. It’s the gross disparities of wealth that are so stark. It doesn’t help that many passengers treat drivers like second class citizens. I don’t know where the solution is here, but I do know that this situation is unsustainable – for drivers – and for the companies they work for.
Lyft Asks Banks for Pitches to Underwrite 2019 IPO [Bloomberg]
Sum and Substance: Lyft Inc., the second-largest U.S. ride-hailing company, has asked banks to submit formal pitches to underwrite an initial public offering next year, people familiar with the matter said.
Evaluating IPO bankers and issuing formal underwriter mandates is the next step in what could be the first of several listings by ride-hailing businesses. Lyft is targeting March or April for the offering, said the people, who asked not to be identified because the matter is private.
Larger rival Uber Technologies Inc. has said it too is aiming to list next year. San Francisco-based Lyft has been working with IPO adviser Class V Group LLC to help steer decisions involving the listing process, including hiring bankers, people familiar with the matter said in August.
My Take: While Uber attracts most of the attention, Lyft has quietly been laying the foundation for its own 2019 IPO. The big question is who goes first. From all indications, Lyft will be the first out of the gate and in an increasingly uncertain economic environment, that could be a distinct advantage. With a $15 billion valuation in its most recent funding round, investors will likely want a premium over that in an IPO. Whether they get it or not will largely be a matter of timing.
Lyft Creating A Shark Tank-Like Experience For Its Drivers (In A Good Way) [Forbes]
Sum and Substance: Incredible ideas have come from rideshare. Along with Uber-for-everything, there’s nearly every service and tool to improve the workaday lives of all the gigmasters hustling for all of those conveniences that can now be booked with a swipe on a phone. On-demand dog-walkers (Wag!, Rover), car washers (Spiffy), food and convenience store runners (Postmates), restaurant-to-your-home deliverers (DoorDash), and kiddie carpool alternatives (Kango, HopSkipDrive, Zūm).Plus, of course rideshare drivers want to earn more, save money on gas, find parking, shield themselves from liability, identify areas with the most demand, avoid accidents as they go from one client-of-the-moment to the next, get paid for a day’s work as soon as possible and take advice from other drivers about how to do all of the above.
Fortunately for this growing class of micro-laborers, all of those functions exist via apps, websites, hardware and even center console-strapped vending machines. Uber drivers can make their back seats into tiny convenience stores for a captive (and hopefully hungry) clientele and take a percentage on sales…
Even where they don’t have an idea specifically for the gig economy, many ride-hail drivers choose to live as contractors for the flexibility to pursue their bold ideas on their own time. That’s where Lyft’s latest initiative comes in. The pink mustachioed powerhouse positioning itself as the community-oriented total mobility solution opened a pitch competition to its drivers. Right now Lyft Pitch isn’t culling talent from its own labor pool to launch mobility concepts for integration with its own services. Not yet.
Lyft Marketing Manager Kate Glantz, who conceived of the contest in July 2017, said, “We’re agnostic to their ideas. They don’t even need to be fully-fledged businesses. What really struck us from [our internal survey last year] is that nearly one in five drivers, or 18%, is an entrepreneur.”…
It’s part of a larger effort by Lyft to secure opportunity for drivers, rather than compete in the modern mobility niche over maximum convenience and minimum price for customers. “So much of our marketing efforts tend to focus on passengers and we’ve really been, as a company, embracing marketing on both sides,” Glantz said. “What’s something that has the impact to affect tens of thousands?” Lyft drivers must apply for the Shark Tank-esque pitch slam by Oct. 21. If you’re not a current Lyft driver and just need a little seed cash, you can still apply to become a driver in order to enter the competition as long as your new driver application is approved before Lyft Pitch applications close.
My Take: I kind of like this idea. Here Lyft is actually facilitating drivers to help advance their careers. Okay, the odds of winning this are infinitesimal. But it’s a nice gesture. Here’s the link to apply.
Readers, what do you think of this week’s round up?
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-John @ RSG
Latest posts by John Ince (see all)
- Uber’s Ambitious and Expensive Plan to Get Self-Driving Technology - March 16, 2019
- Does Uber and Lyft Value New or Experienced Drivers More? - March 13, 2019
- Who’s Making Money from Lyft’s IPO? - March 9, 2019