Weekly Round-Up: Uber Appears To Be Ripping off NYC Cab Drivers

Bill Ackman stirs the pot by accusing Uber of shortchanging NYC cab drivers on tips. Plus, Lyft rolls out new earnings features with a touch of controversy, and more drivers report sub-$3 trips.

We break it all down for you.

Is Uber Actually Ripping Off NYC Cab Drivers? 🚕🗽

Is Uber Actually Ripping Off NYC Cab Drivers?
Is Uber Actually Ripping Off NYC Cab Drivers?

Influential hedge fund manager Bill Ackman called out Uber CEO Dara Khosrowshahi for allegedly ripping off New York City taxi drivers by not allowing them to keep tips. Uber claims tips are passed to its partner, Curb, which should transfer them to drivers within a day.

  • Ackman ordered a yellow cab via Uber and tipped $5, but the driver’s screen showed no tip received. Uber admitted that the driver’s screen didn’t refresh to show post-trip tips.
  • Khosrowshahi responded to Ackman’s post on X.com, saying that Uber passes on 100% of the tips and is working to remove the delay on the Curb integration.
  • Uber started its partnership with Curb in 2022 to include New York City taxis within the Uber app and has since expanded the program to other cities, including Los Angeles.
  • Popular internet humorist Trung Phan poked fun at Ackman’s text to Khosrowshahi.

Harry Campbell’s Take: Bill’s a little upset that Dara didn’t text him back

Respond to Harry’s post on X.com

Sergio Avedian’s Take: There’s a lot more to this than meets the eye! As the voice of rideshare drivers nationwide, I urge you to accept my invitation to appear on Show Me the Money Club, Bill!

Respond to Sergio’s post on X.com

Is Lyft’s New Earnings Per Hour Calculation True Transparency or Just More Gamification? ⏰💰

Is Lyft's New Earnings Per Hour Calculation True Transparency or Just More Gamification?
Is Lyft's New Earnings Per Hour Calculation True Transparency or Just More Gamification?

On this week’s episode of Show Me The Money Club, Sergio, and Chris discussed a new feature being rolled out by Lyft in certain markets that offers information on how many dollars per active hour drivers are making. However, Sergio argued that Lyft’s representations of drivers’ potential earnings are unrealistic.

  • SMTMC received screenshots of the new feature being available in markets such as Chicago and Las Vegas. In one screenshot, Lyft claims the driver is making $29.75 per hour, and in another, $31.70 per hour.
  • What Lyft isn’t explaining is that the advertised earnings are for active hours, not online hours. The chances of a driver actually earning those amounts within an hour are virtually impossible, considering drivers are being utilized at an all-time low and are not receiving guaranteed ride requests.

“There is no chance the hourly rates Lyft is displaying are going to be reached by any driver. Even with auto-accept on, it’s very rare to hit that number,” said Sergio during the show.

Uber, Lyft Drivers Seeing More Sub-$3 Trips 💵💵

Uber, Lyft Drivers Seeing More Sub-$3 Trips
Uber, Lyft Drivers Seeing More Sub-$3 Trips.

It’s no secret among the driver community that trip earnings are declining. As documented by RSG for months, both Uber and Lyft drivers have reported an alarming number of trips paying $3 or less. Now, this story is making national headlines in a new Business Insider article.

  • Eight ride-hailing and delivery drivers shared screenshots with Business Insider showing trips ranging from five to 15 minutes that paid at or below $3, excluding tips. This includes drivers from Arizona, Cleveland, Houston, Fort Lauderdale, and Orange County.
  • Gridwise data indicated that, in 2024, fewer than 1% of completed Uber and Lyft trips paid drivers below $3, excluding tips. However, over 36% of completed deliveries on apps like Uber Eats, DoorDash, and Grubhub paid less than $3 before tips.
  • Our very own Sergio Avedian was interviewed for the article, noting that such trips often result in unprofitable outcomes due to driving expenses. Short trips involve frequent braking and accelerating, which adds wear and tear to the vehicle.

Lyft CEO David Risher Admits Past Pay Issues, But Are Drivers Seeing Real Improvements? 🤔💰

Lyft CEO David Risher Admits Past Pay Issues, But Are Drivers Seeing Real Improvements
Lyft CEO David Risher Admits Past Pay Issues, But Are Drivers Seeing Real Improvements.

Amid reports of sub-$3 trips, Lyft CEO David Risher confessed in a Fortune podcast interview that the company’s driver pay was previously not competitive. Risher acknowledged that prioritizing Wall Street over drivers led to uncompetitive pay rates.

  • Over the past year, Risher stated that Lyft has made several changes to boost driver earnings. He highlighted Lyft’s commitment to ensuring drivers retain at least 70% of passenger payments after external fees.
  • Despite these claims, on the April 24 episode of “Show Me The Money Club,” hosts Sergio and Chris argued that the earnings guarantee doesn’t hold up in practice.
  • Risher also mentioned that Lyft has reduced the pick-up time difference with Uber from several minutes to just 10 seconds, potentially allowing drivers to complete more trips.

What do you think? Do you agree with Risher’s statements in the podcast? Have the changes Lyft implemented led to increased earnings for you?

Reply to this email, or post a comment to share your thoughts! One lucky driver will have their comment featured in next week’s Roundup newsletter and receive some RSG swag!

Does Rideshare Have An Insurance Problem? 🚙💥🚗

Does Rideshare Have An Insurance Problem?
Does Rideshare Have An Insurance Problem?

Many drivers do not carry the proper insurance necessary to do rideshare, according to insights from Insurify.

  • More than 26% of rideshare drivers don’t even tell their insurers that they drive rideshare. This could be because the average rideshare driver pays an additional $300 on average than a non-rideshare driver for the same coverage.
  • This is concerning because the rideshare companies only offer comprehensive commercial insurance coverage when the passenger is in the vehicle.
  • If you’re interested in learning more about affordable rideshare insurance options, check out our partner, Voom!

QUICK HITS

🍕 Delivery drivers, get ready to make a stop at Costco! Uber Eats is adding Costco delivery. – AXIOS

⚖️ A Houston-area Lyft driver has filed a lawsuit against the company after being kidnapped and sexually assaulted at gunpoint by a rider. – CLICK2HOUSTON

📢 Hundreds of Uber drivers have staged a protest in Birmingham, England, to protest against pay and conditions. – BBC

🚌 A grassroots effort to tax Uber, Lyft, and Waymo to fund public transit is threatened by a competing broader tax measure backed by key city leaders. – THE FRISC

🥂 This summer, Uber will offer an all-inclusive Champagne tour for up to four passengers on Fridays and Saturdays for a flat fee of €200 in a new program called “Bubbles.” – FOOD & WINE

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