By Mariah Montgomery
If you’ve taken an Uber ride recently, you’ve probably noticed it cost a lot more than a few years ago. Why is that?
PowerSwitch Action, my organization, conducted the largest-ever study of rideshare fares to find out. We discovered a story of gaslighting and greed that squeezes drivers and riders alike — while funneling our money to banks and billionaires.
In March, Minneapolis passed an ordinance requiring rideshare corporations to pay drivers at least $1.40 per mile and 51 cents per minute. In a desperate attempt to block this pay floor, Uber and Lyft are threatening to leave the city, claiming the requirement would make rides too expensive for residents.
This argument — that higher driver pay would force big fare hikes — is one of Uber and Lyft’s favorite scare tactics. As drivers across the country have protested poverty wages and organized for better pay, the rideshare giants have trotted out this line again and again — in Connecticut, Chicago, New York, and Seattle, to name just a few places.
We decided to test that claim. Our team analyzed over a billion rideshare trips, comparing four years of data in Chicago and New York, the only two U.S. cities that make rideshare corporations report detailed trip data.
In New York, drivers overcame Uber’s fearmongering and won a minimum pay standard that took effect in February 2019. In Chicago, drivers are organizing but haven’t yet won pay protections. If Uber’s argument were true, fares should have gone up more in New York after the pay standard took effect.
In fact, the opposite happened. Over the four years we studied, Uber and Lyft raised fares by 54 percent in Chicago, where drivers have no pay protections. In New York, they only increased fares by 36 percent. The reality just doesn’t match Uber’s scare tactics.
So if fares went up more in the city without a pay floor, what’s causing these big price hikes? We looked at many possible explanations, but only one fits the data: pressure from Wall Street.
For years, Uber used money from the likes of Goldman Sachs, BlackRock, and Jeff Bezos to subsidize cheap rides and decent pay. But now that Uber dominates the market, its investors are demanding their cut. So Uber has jacked up fares and cut driver pay.
The strategy is working: just last month, Uber reported an annual profit for the first time ever — and promptly announced plans to give $7 billion to shareholders.
Letting rideshare corporations bully and bamboozle to get their way harms all of us. Riders are forced to pay more to get around, while drivers have to work long hours and still struggle to cover the bills. Falsely claiming that wage protections will drive up fares seems to be a tactic to pit drivers against passengers and obscure this massive transfer of wealth to Wall Street.
The good news is that communities are no longer falling for Uber’s scare tactics. In Minneapolis, the city council stood with the city’s drivers instead of giving in to Uber’s bullying. And in Chicago, drivers are organizing for an ordinance setting a living wage and protections against unfair deactivations — and have the support of a majority of the city council.
These fights are far from over — already Uber and Lyft are turning to the Minnesota state legislature, which could pass a law banning the Minneapolis ordinance from going into effect.
But when drivers and communities stand together, these cities are showing we can say no to Uber’s bullying, ensure drivers are paid enough to provide for their families, and shape a transportation system that serves us instead of Wall Street.
Mariah Montgomery is the national campaigns director at PowerSwitch Action. This op-ed was originally published at Inequality.org.
JimboXYZ says
Someone is always trying to leverage another’s capital & assets for their profits. Uber/Lyft has always been that friend we all knew that was a freeloader for transportation, backseat cargo. Only Uber/Lyft are strangers that the cab companies have always drove around for profit while screwing the driver. Drivers have always relied on tips with Uber/Lyft.
Pogo says
@Mariah Montgomery (and FlaglerLive)
Truly, sincerely, thank you.
I now await the predictable sermons concerning the Angel Adam Smith, and His host of the Holy Most.
Related
https://www.google.com/search?q=rules+of+monopoly
TR says
Not really sure why anyone would want to do this type of work. It may bring in extra cash for the driver but if an accident happens it will cost them dearly. Think about it, insurance companies want you to tell them if the vehicle your insuring is for business or personal? (most will say personal because it is cheaper). Now you get into an accident while driving a “customer”. If the customers driver is at fault. The customer ends up suing the drivers insurance company and the driver, but the insurance company isn’t going to pay out because the driver wasn’t insured to use his vehicle for business. So then driver looses everything. The other problem I see is RISK. In today’s world you never know what kind of person you will be picking up. He/she could be a nut job and then you might end up hurt or killed. Not worth it to me.
A Concerned Observer says
This is beyond ridiculous! America does not need yet another law to regulate the ride share industry. Any government intervention to attempt to protect the drivers and riders and limit the income of the corporation and “Shareholders” will only result in lawsuits and counter lawsuits, further clogging our overburdened legal system. Everything these days seems to eventually rise to the Supreme Court. They have far more pressing problems to deal with.
The problem is simple; if the cost of a ride share becomes too expensive, don’t use it. If the drivers believe they are not making enough money, quit and seek some other means of income. When the drivers and riders go away, the greedy shareholders and corporations will die on the vine. As a side benefit, lawyers will have one less source of income and have to come up with creative commercials with riders, shareholders and corporations holding up cardboard checks from lawsuits! Problem solved.
Tina says
The only solution is to break up this Rideshare DUOPOLY with COMPETITION. We need better fair ones.
It’s time for drivers to FIGHT BACK AGAINST.CORPORATE GREED. Come together to CROWDFUND a new Rideshare.
We are already doing it here in Illinois/NWI. We mostly drivers and some passengers are CROWDFUNDING a new
Rideshare Subscription company set to LAUNCH THIS SUMMER.
Drivers keep 100% fare + cancellation fees and pay small monthly fee. Also there is private bookings on the app as well.
Passengers get Flat rates , Stable No SURGE PRICING and can take rides with PREFERRED DRIVERS.
All the people that contributed get discounted rides and free membership for months depending on how much they contribute.
All this started by a driver and with many donations as small as $20. It adds up.
If people want to contribute we still have 2 months to go. Help us in Illinois so we can be successful and spread across the country.
Steve E Einhorn says
The drivers need a pay floor, in my city pay per mile is a mere 40% of what it was 8 years sago, driver pay has been continuously cut year after year while customer price has gone up.
These companies manipulate the data to hide this, but fact of the matter is it takes more rides and more miles driven with higher expenses to make less money. When I started Surge pricing multiplied the customer cost of the fare and multiplied the driver pay.
Now it doubles customer cost while giving an extra $3.00 to the driver.
Thats a pay cut.
So I drive a taxii now, because it pays better than uber… in 2024! I go home with more money off less fares driven than when I did uber, which means less miles and gasoline, all the while i have less ambiguous and complicated insurance and my car is relativly safely parked at the company parking lot.
Sean says
You don’t know what you’re talking about about. Any insurance company of any size has a ride share rider on their policy. It is not expensive. The insurance Uber and Lyft provide are more than the average motorist has. It is a reason fares went up from the early days. If you think I don’t know we hat I’m talking about, I can show receipts from being hit by a drunk driver while driving for Uber. Being in a no fault state Uber paid everything except the deductible (which the drunk drivers insurance paid). The damage was slightly over $8000. I never once had to contact my insurance company. My rates didn’t go up.
I am also an analytical person who uses spread sheets to make decisions. Anybody who argues depreciation on my car don’t understand mileage expenses for business and for my phones ( needed for the business). I also wonder why people talk about wages per hour for drivers, but if you work at an office that is 30 minutes away from home, you are not getting paid for 5 hours of your time in a 5 day work week on commuting alone, and you don’t get to deduct a penny of the depreciation on your car.
More importantly, people who work at Kroger, McDonald’s, Amazon or any more traditional employee, work when they are told. You know when I work,? When I want. If I want for as long as I want. If you’re short on a mortgage payment at your job, can you just work overtime to make more just because you want to? So all the city council members in Minneapolis are playing a game of chicken with drivers jobs to make themselves look good, with zero risk to them. Council will get paid still.
Oh and as an aside, during the pandemic, the bonuses offered by both companies took my gross well over $100k per year on about 50k miles driven. My tax rate is far lower than a person who has a salary of $100k
Sean says
Risk? You mean like the risk of being a school teacher at Sandy Hook? Maybe the risk of construction on the Key Bridge in Baltimore? Maybe the risk of attending music festivals in Vegas? Or is it the risk of getting on a Boeing airplane that scares you?
Rodriguez Garcia says
This ride shared company are getting away not giving the amount $1.40 miles and .51 cents because they don’t want to do it. This price is good and could be great for the two party mean driver and riders. Only thing the ride share company need to do now to get money still provide low ride fairs is by charging a monthly cost for there app. This will help them pay there bill and still give great service to everyone.
Stan says
What bs. You can’t just say ‘one city had earning floors and look what happened’…. Because you don’t present the numbers. The floor could be $0.01 per mile or a million bucks per mile. Since you hide the truth I’m guessing that floor in NYC was quite low.
But year, complain about banks getting money. You know, the people who operated Uber for years at huge losses. Why should they get anything for their investments, right?
Jeff t says
If this is true, wouldn’t Uber be making money? They are not. This is a simple fact that cannot be refuted.
William Desantis says
I recently took a uber from my house to the city during the weekday which was 15.00 dollars for 6.7 miles. But when I took the same ride on a weekend the fare was
47. 00, please this is ridicolous. Of course I refused the ride. It’s getting way out of hand and then they require a tip too. Bill from Pa. I’ve decided to get a moped, Unfortunately some other customers will have to deal with the insane pricing.
Manuel R Velez says
Uber steals money from drivers through “Trip balance” if the trip balance is $50 (for this example) and if their system of travel through GPS takes you on toll road or if you’re headed to the airport they subtract toll road and airport fees from the trip balance and not “ADD” it to the trip balance. I have the evidence. Then when you try to get that money back from the use of the toll road and airport fees you have “10 days” to claim it, if not they will keep the money and continue to steal money from drivers.
John Jacob says
The ride share business is taking advantage of the drivers. Companies should have more integrity. I admire companies like Costco that limit the amount of markup they have on products and their loyalty is to there employees and customer base.
Thank goodness that cities like Minneapolis are putting there foot down and saying, “No you can not do business in our city unless you protect our citizens.” :)
Frank Tankana says
Comedy is not a career path you would ever want to pursue. It requires a person to be entertaining .
Problem solved .
Jason Reynolds says
You know it’s easy for you to say, ” just quit if you don’t like it”.that like any other job isn’t that easy to just ,”quit” since some of us have made this our main source of income that pays to put the food on the table for our kids the gas in the car to take them to school etc.etc.if you think it’s so easy to ,”just quit” leaving bills unpaid,food unbought and our little lives to go on about their normal school and learning activities that we so provide for them. I say to whoever said this ill ,”just quit” the same day you “just quit” your main means of support and let’s which one of us benefits quicker or better. Want to make this a test?no?good because it’s more then just a test.it would scree our families both the same,so that is why we can’t, “just quit”.
Kibrom Fisehatsion says
Greed. in one word
FlaglerLive says
Uber had revenue of nearly $10 billion in its last quarter and net profits of $1.43 billion. Uber is making money.
Barbara says
Less than a month ago, my trip took me on the PA Turnpike. I was paid the toll amount by Uber right away when the trip ended. I will have to then pay it when the bill from the Turnpike arrives in my mail. Maybe there has been a change in the way Uber reimburses for reimburses for toll roads. I prefer this to submitting receipts to Uber and waiting for them to pay.
La says
Uber is stilling money from the rider’s also paying drivers way less need to bring a lawsuit filed by for this
Samefull uber distorting people’s life