Weekly Roundup: Massachusetts’ Uber and Lyft Deal Leaves Many Drivers Unsatisfied

A settlement between Massachusetts and the rideshare companies promised better pay and benefits, but drivers and advocates are skeptical about its impact. Just how was Uber able to achieve increased profitability? A New Jersey couple’s lawsuit against Uber may make you think twice about agreeing to arbitration. We break it all down for you.

Massachusetts’ Uber and Lyft Deal Leaves Many Drivers Unsatisfied 🚕😞

Mass Uber Lyft Deal
Mass Uber Lyft Deal

SOURCE – Fast Company

Massachusetts struck a deal with Uber and Lyft to boost driver compensation and benefits, but the agreement left many drivers dissatisfied. The settlement, while improving some conditions, notably sidestepped the crucial issue of whether drivers should be classified as employees or independent contractors — a distinction that carries significant implications for workers’ rights and protections.

  • The settlement, brokered by Attorney General Andrea Campbell, establishes a minimum pay rate and offers limited benefits, mirroring similar legislation in states like California.
  • However, the agreement blocks the attorney general’s office from pursuing the classification issue in the future, leaving drivers with limited options to seek employee status.
  • The settlement requires a minimum pay of $32.50/hr for the time between ride assignment and drop-off and includes provisions for paid sick leave, family leave stipends, and health insurance contributions.
  • A ballot measure for November, endorsed by Campbell, proposes a path to unionization for rideshare drivers without addressing classification, but some drivers have concerns about the measure’s implementation and effectiveness.

Uber’s Road to Profitability Represents A Costly Journey for Drivers 📈💸

How Uber became profitable
How Uber became profitable

SOURCE – MarketWatch

In a MarketWatch podcast, RSG Senior Contributor Sergio Avedian and Columbia Business School Executive in Residence Len Sherman detail just how Uber, once a poster child for money-losing startups, was able to turn a corner towards profitability by cutting driver earnings.

  • In 2023, Uber reported a net profit of $1.9 billion, which Sherman calls “one of the greatest turnarounds in history,” after the company had cumulative losses of nearly $33 billion through 2022.
  • Sherman attributes this turnaround to a new driver-pay policy and sharp increases in consumer prices. Avedian says the introduction of “upfront fares,” along with an auction-based driver selection process, allows Uber to potentially pay drivers less while lacking transparency in fare determination.
  • Uber maintains that its profitability stems from revenue growth outpacing costs as trip numbers reach new highs.

Uber Arbitration Ruling Challenges Drivers’ Legal Recourse ⚖🤔

Uber arbitration
Uber arbitration

SOURCE – The New York Times

A New Jersey couple’s lawsuit against Uber over injuries sustained in a car crash has been complicated by the terms-of-service agreement linked to an Uber Eats order. The couple’s lawsuit against the company was halted by a court ruling enforcing an arbitration agreement their daughter seemingly accepted when ordering a pizza on Uber Eats with her mother’s account.

  • Georgia and John McGinty of Princeton, N.J., were seriously injured in an Uber crash in March 2022 with severe spine, rib, and arm injuries.
  • A New Jersey appellate court reversed a lower court’s decision, upholding that arbitration was valid since the terms-of-service agreement was agreed to, though indirectly.
  • The McGintys contend they were unaware their daughter had agreed to such terms and are considering further legal challenges.
  • Uber emphasizes that users agree to arbitration terms when signing up for their app, as highlighted in the appeals court’s decision. This ruling underscores just how Uber’s arbitration agreements limit users’ rights to jury trials, which not only hurts users but also prevents drivers from getting justice through appropriate channels.

Pennsylvania Bill Proposes Benefits for App-Based Drivers, But Some Advocates Are Skeptical 🏰🤨

Pennsylvania
Pennsylvania

SOURCE – Penn Live

A new bill in the Pennsylvania Senate seeks to provide limited benefits to app-based drivers, sparking debate among labor advocates over worker classification. The bill would require Uber, DoorDash, and other gig economy companies to contribute 4% of a driver’s gross pay to a “portable benefits account,” which can be used for various expenses, including health insurance and retirement.

  • However, the bill also classifies these drivers as “independent contractors,” a move criticized by labor advocates who argue it prevents workers from being recognized as employees with full benefits.
  • Critics, like Sally Dworak-Fisher from the National Employment Law Project, label the bill as a “Trojan Horse,” asserting that it locks drivers into a contractor status, undermining efforts for full employee rights and protections.
  • The bill cleared the Senate Banking and Insurance Committee mostly along party lines, raising concerns about its impact on fair wages, working conditions, and unionization efforts.

Ex-Border Patrol Agent Reveals Info About Fraudulent Uber Eats and DoorDash Accounts 🕵🔍

Illegal Uber DoorDash accounts
Illegal Uber DoorDash accounts

SOURCE – YouTube

In this week’s episode of “Behind the Wheel,” RSG Senior Contributor Sergio Avedian sits down with Trent, a former Border Patrol Agent, who exposes the use of fraudulent courier accounts within the system. Discover how unsuspecting individuals are exploited and learn about the ways Uber and DoorDash benefit from these fraudulent practices. You’ll definitely want to catch this week’s interview!

QUICK HITS

  • The University of Southern California in Los Angeles offers free shared Lyft rides to students. An op-ed from one of the students encourages them to speak with their drivers in an effort to humanize them. – Daily Trojan
  • Uber has announced a new partnership in the autonomous vehicle sector, this time teaming up with Avride, formerly known as Yandex Self-Driving Group. As part of a multiyear agreement, Uber customers will soon have the option to enjoy rides and receive takeout deliveries via Avride’s autonomous vehicles. – The Verge
  • A TikToker documented his DoorDash driver completely wrecking his Dunkin order because he didn’t leave a tip. The TikToker said “he didn’t have enough money to leave a tip,” which begs the question: why are you ordering delivery when you don’t have enough money to tip? Thoughts, drivers? – Daily Dot
  • Uber is now offering a new feature for Cape Town, South Africa users: the ability to book a safari adventure right through the app. While there’s no confirmation on whether the company plans to serve a driver to a lion, one might wonder if the reduced earnings are feeding them to the financial wolves instead! – Uber

Must Listen Or Watch RSG Content

Here are this week’s featured podcast episode and YouTube videos: