Uber & Lyft tricked you. You may not realize it, but you’ve been duped. This issue is close to my heart, because when ridehail companies offer dirt cheap rides that don’t reflect the true cost, people choose cars over other forms of transit. Getting in a ridehail car is really easy, and somehow it’s affordable. But really…it’s not. The ridehail companies have been pumping VC money and subsidizing rides for years so you would think these rides are affordable. Now you’ve built your life around the ridehail model, and as we all know, change is hard.
Well, in California, change is coming. New legislation called AB5 has made stricter rules on who can be called an “independent contractor.” Uber & Lyft have tried to fight it in court, but the courts have not relented. Now these companies are calling upon the masses (and lots of money) to help pass Prop 22, which essentially makes a new category for ridehail (aka rideshare) drivers so they can continue to avoid paying for full benefits. Let’s not get tricked by the ridehail companies again and let them get away with it. Vote No on Prop 22.
Cheap Rides Are Addicting
App based ridehail rides have been artificially cheap for years, and that has led people to become dependent on these services. People have forgone other forms of transit, and maybe gotten rid of their car, bicycle, or public transit pass. With so much time passed, people have expected these rides to be the norm, but these cheap rides result in most drivers getting less than minimum wage. This lifestyle dependent on cheap Uber & Lyft rides is not sustainable. I love cheap rides like the rest of us, but not when the human drivers can’t make a living. Sorry, self-driving cars are just not here yet. Cheap rides are addicting, but it’s time to break away and build healthier transportation habits.
I’ve seen this coming for years. I worked for a rideshare company as a developer and saw the subsidies rolling in as we offered sub $10 rides for the first time. I drove for 3 different companies to get the full driver experience, spending too much time for too little money. I could tell this wasn’t going to last. This is why I’ve limited my ridehail usage unless absolutely necessary. I rode my bike or the bus instead. I didn’t want to become dependent on a company business model that wouldn’t stand the test of time.
There are moments when a Lyft provided e-bike (in cities like NYC, Bay Area, and more) could cost MORE than a Lyft. It’s clear that this does not reflect the true economics of a ride in a car and a ride on a bicycle. It has been found that bicycles represent an economic gain to society at large, while cars represent an economic loss. This is no doubt still true today, and there’s much more than just economic benefit when it comes to riding a bike. As a daily user of the bicycle, I know it’s more than just easy transportation. It has the power to enhance your happiness, your health, and your community.
I want ridehail to reflect its true cost so people can see more clearly the benefits of the bicycle and public transit. If more people used these services, more investment would follow, which could influence our cities into becoming more people friendly and environmentally friendly happy places.
Gig Drivers Are Not Independent
When I worked for the ridesharing company Sidecar, Uber & Lyft were in their infancy. I joined Sidecar because they treated their drivers with more respect and gave them more control. We had a destination filter to only pick up riders going to a certain destination area (maybe the driver’s home!). We had pickup filters so drivers could choose how far they wanted to drive for a potential pickup. And most importantly we had price multipliers so drivers could set their own prices based on the default fare.
If these were all true in the Uber & Lyft model, classifying them as independent contractors would make more sense…especially because they can set their own prices! However, because Uber & Lyft could set stable (low) prices by misclassifying workers and subsidizing these prices with loads of funding, Sidecar was unable to compete.
With the passing of AB5 in California, Uber has begun to experiment with allowing drivers to set their own fare and other features that should’ve existed years ago. But to make sure this progress continues, we need to vote No on Prop 22. With drivers having more control over the prices, there will be a much different dynamic in the market between riders and drivers, and this may reduce the number of drivers on the road.
Something to note about the future of ridehail apps is that there must be fewer drivers. Right now, the system is able to somewhat sustain many more drivers and provide them with less money. If more drivers are paid a living wage, there will be less money available, resulting in fewer drivers. In my opinion, this is a good thing. There will be some growing pains as some drivers find other work, but for the drivers who stay, it can turn into a better job. It’s like a class action lawsuit where everyone gets $10. To make a positive lasting impact on people’s lives, drivers need a living wage.
Driver Flexibility is a Myth
One of the main arguments for keeping the status quo is that drivers have more flexibility, meaning they can work and not work whenever they please. If you dig down into what this really means, you’ll find some real problems underlying this myth of flexibility.
In an ideal world, flexible schedules allow people to spend more time with family or doing things they love. In the real world, flexible schedules allow drivers to work multiple jobs because none of the jobs are providing enough income on their own to provide a living wage. This doesn’t seem like a good thing.
In an ideal world, drivers could work at whatever time worked for their schedule. In the real world, drivers have to be constantly aware of the current surge price and demand levels so they can work exactly at the right moment. This is not working on your own schedule, this is working on a specific schedule set by demand, but ever changing and not always easy to predict. You may think this is easy, but this requires lots of mental effort and an always on mentality, not to mention having to work at odd hours. This doesn’t feel like real flexibility.
If someone enjoys working two or more jobs and only working at peak demand hours when most people are having dinner or sleeping, that’s fine. But don’t call that flexibility.
More info and sources on flexibility in Further Reading.
Breaking the Ridehail Habit
So should you stop using ridehailing apps entirely? Not quite. If it exists, and it’s subsidized by someone else, why not use it? However, be aware that this is special pricing. It’s like the first year of your internet service when it’s cheaper, but eventually it will become full price. One way to prepare yourself is to start tipping more generously if you can afford it. Another option is to experiment going a bit longer without ridehail and see what happens.
Next time you compare prices between Uber & Lyft, how about you also go to Google Maps and check how long it takes to get there on a bike or transit? Maybe you’ll discover that it takes 20 minutes by bike and 15 minutes by car. Add on the waiting time and it’s the same!
If you’re serious about trying to get around by bicycle, see if you can make a schedule out of it so you keep it consistent. Once a week or every day, try to run an errand by bike. This can work out the kinks of any problems you may find like locking your bike, finding routes with mapping software, flat tires, and other issues that may arise. There are also many resources online and perhaps with your local cycling organization to help get you started riding a bike in urban environments and other useful tips.
Live a Sustainable Life
It’s time to live a more sustainable lifestyle. Part of this means not supporting the unsustainable business practices of the ridehail companies. This is not just environmental, but also social and economic sustainability. The politicians are finally taking away this car friendly subsidy, and it’s a great time to build healthy transportation habits.
Once the ridehail companies follow the rules of AB5, the market can sort itself out to finally arrive at the true cost of these rides. Vote No on Prop 22 to help this happen and share this post with others who may find it useful (share buttons are on the left side of this page).
It may be hard to imagine a world without these ridehail services as they are now, but the world can become even better with more support of systems like public transit, better biking infrastructure, and other micromobility services that have arrived on the scene in the past 10 years. Maybe these haven’t taken off because ridehail is still keeping us in the past with just more advanced taxis.
Vote No on Prop 22 and happy biking!
If you’re interested in more information, there’s a lot of reading on this topic. Here are a few articles I found useful:
https://www.theguardian.com/commentisfree/2020/aug/24/gig-economy-uber-lyft-insecurity-crisis – This article discusses Uber & Lyft among AB5 and the gig economy in general. It also examines how healthcare and other benefits are tied to full time employment in the first place. Should they be?
https://usa.streetsblog.org/2020/08/26/the-real-reason-buses-were-losing-riders-even-before-covid-19/ – Low wages for ridehail drivers is actually a form of car subsidy reducing public transit use.
https://www.wired.com/story/uber-lyft-flee-california-austin/ – What happened in Austin when Uber & Lyft left? Spoiler alert, nothing really. A bunch of other companies came in and filled the gap while following the rules. More money went into local companies instead of to the big companies based in the Bay Area.
https://www.theguardian.com/commentisfree/2020/aug/22/all-hail-the-california-court-that-put-the-brakes-on-uber-and-co – More information on the gig economy’s unsustainable independent contractor model.
Uber CEO Dara’s opinion article where he clearly states driver’s aren’t treated well enough, but he still argues for the elusive “flexibility.” Here’s a quote from his article, where he says Uber would employ less people. Yes, but at least the people employed would have full time living wages! Again, this is where it is OUR responsibility as consumers to deny support for this unsustainable business model.
“Why not just treat drivers as employees? Some of our critics argue that doing so would make drivers’ problems vanish overnight. It may seem like a reasonable assumption, but it’s one that I think ignores a stark reality: Uber would only have full-time jobs for a small fraction of our current drivers and only be able to operate in many fewer cities than today. Rides would be more expensive, which would significantly reduce the number of rides people could take and, in turn, the number of drivers needed to provide those trips. Uber would not be as widely available to riders, and drivers would lose the flexibility they have today if they became employees.”Dara. Uber CEO
There is a research study touting the benefits of flexibility, but I think it has many problems (I do not know who funded it). They look at patterns to make assumptions about the use of flexibility, but this doesn’t take into account the kind of psychological tricks and bonuses that are given to the drivers to keep them working, nor does this study have any qualitative data from human drivers themselves. It just takes aggregate data and makes assumptions about it. Assumptions that I think are wrong. At the end of this short article about it, they even clearly admit that this is not an ideal work situation and “not necessarily reflective of a typical worker’s preferences.” Gig economy flexibility is bullshit without independent price control.
https://www.vice.com/en_ca/article/d3ae7y/weworks-implosion-shows-how-softbank-is-breaking-the-world – Learn more about Softbank, one of Uber’s biggest investors, and how it skews markets with its unfathomable investments in visionary (also read as: unprofitable and sometimes unrealistic) companies. This article was written right after WeWork imploded, but has lots of Uber specific references.
https://www.theguardian.com/society/2013/nov/01/secrets-worlds-happiest-cities-commute-property-prices – What results in a happy city? It’s not a secret, it’s more bicycles…and fewer cars.