New IDG Analysis Exposes How Ride Hail Apps Are Gouging Riders and Drivers
New York, NY — After years of pay cuts, New York’s ride-hail drivers are finding it harder and harder to make ends meet. The Independent Drivers Guild, a Machinists Union affiliate which represents and advocates for more than 60,000 of these drivers, has garnered over 8,000 signatures on a petition to increase driver pay and end price gouging in the ride hail industry.
The Guild also released a new analysis of driver pay which found that drivers are making significantly less than they were just a few years ago — and companies are pocketing more. The Guild also found that drivers are working longer and longer hours in an attempt to make up the difference, but are still unable to make ends meet. The Guild report proposes corrective policies to end price gouging and raise driver compensation by 37 percent to levels to promote safe driving and bring income in line with prior pay rates.
“After offering attractive rates at the outset, Uber and Lyft repeatedly reduced driver pay and hiked their cut of each fare, violating and voiding rider and driver agreements again and again. They have slashed the earning potential for drivers dramatically and redirected the profits from New Yorkers’ labor out of our community and into the coffers of privately held multinational corporations,” said Ryan Price, Executive Director of the Independent Drivers Guild.
“Uber and Lyft really pulled a bait and switch on riders and drivers alike. Riders are being overcharged and drivers who already invested their savings and took out loans to join the industry have been left with little choice but to work longer and longer hours to try to make ends meet. Action is needed for the protection of our community and the safety of our streets,” said Sohail Rana, a driver and member of the Guild’s Pay Organizing Committee.
A recent Independent Drivers Guild (IDG) survey of New York City drivers found that 73 percent of workers who had been in the industry for at least a year reported their financial well being was worse now than had been previously and 73 percent of drivers worked more than 10 hours on their most recent shift.
More than 8,000 drivers have signed on to a petition in support of the three major tenets of the Guild’s proposal:
1. A minimum pay raise for New York City drivers of 37 percent across all platforms including Uber, Lyft, Juno, and Via. That would make the pay rates for UberX minimally: $2.3526 per trip, $1.6145 per mile, $0.3229 per minute.
Currently, drivers’ mean work day of 11 hours is 37 percent above 8 hours: the basic right of a maximum work day. A minimum pay scale based on a 37 percent increase over current rates would also return driver compensation to be nearer the rates offered a few years ago.
Here is a side by side comparison of a sample five mile, thirty minute Uber ride in New York City in 2013, today and under the IDG’s proposal:
|Rider Pays||Driver Pay|
*Passenger fare is no longer bound to actual mileage or minutes traveled.
2. A maximum commission. Currently, apps can charge passengers more than double what a worker is paid, and the Guild’s report has examples of just that. Uber and other companies must not charge passengers over 25 percent more than the worker is paid. This would prevent price gouging and return commissions to the maximum rates previously detailed in user agreements.
3. Return trip to NYC pay (known in the industry as “deadhead pay”)—drivers must be paid for the trip back to New York City while no passenger is in the car. Failure to pay drivers for return trips is unfair and costly to workers and puts workers’ compensation insurance and other insurance coverage in jeopardy.
The full report and proposal to improve pay is available at drivingguild.org/progress
The Guild’s pay proposal comes on the heels of its victory winning a tipping option for all for hire vehicle drivers in New York City. As a first step to addressing years of pay cuts, members of the Independent Drivers Guild organized and won a New York City law and a Taxi and Limousine Commission rule which forced Uber, Via and all black car companies to offer a tipping option to their apps or other payment methods. The Guild’s proposed rule was greenlighted by the city in April 2017 and by the end of July Uber added a tipping option to the app for drivers in New York City (its largest U.S. market) and across the nation. In the Guild’s tipping rule proposal, the IDG also called for broader pay protection rules and the city’s Taxi and Limousine Commission noted its agreement that regulatory pay protections were needed in its official response.
Since its launch in May 2016, drivers with the Guild have won important protections and app improvements. Ongoing efforts include an open enrollment outreach campaign to help drivers sign up for health coverage as well as efforts to improve restroom access for drivers in Manhattan and at area airport lots.
Drivers who wish to learn more about the IDG can visit DrivingGuild.org or text DRIVE to 64336 to learn more (msg and data rates may apply).
The Independent Drivers Guild is a Machinists Union affiliate representing more than 60,000 app-based drivers in New York City. We are Uber, Lyft, Via, and Juno workers united for a fair for-hire vehicle industry.