Drivers are subcontractors, and if they are looking at striking, that's a signal that their pay isn't sufficient. Ride sharing providers encourage their contractors to perform accept tasks in a way that resembles full-time employment, but the message they recruit with is that "you're making extra money with your car, which is "free"". It's a bad deal because they pay $0.85/mi, and operating the car costs around $0.58/mi (which is a lowball estimate for livery use, and $0.23 of that is depreciation). When you factor in additional wear and tear, brakes, etc, full time drivers probably have another $0.10 of expense.
It's inherently exploitive, as Lyft subcontractors are working for cashflow and operating at a loss.
Where the money comes from is Lyft's problem. They can cut operational overhead, raise prices, reduce R&D science projects, take measures to eliminate unprofitable routes, etc. The usual reply is "robot cars are coming and this goes away"! That's not really right either -- there are no sentient robots driving around looking to be exploited, so they will need to own or lease those assets, which will depreciate at something like $0.50-0.75/mi (your robot cab isn't going to be cheap), and they will need to manage, insure and maintain the assets, which isn't cheap either.
Congrats to the folks who cash out. As amazing as ridesharing is, it's a fucked business.
This is not how the minimum wage works currently. This is not all Uber/Lyft's feet, it's a broader problem in the economy. I understand this is more complex than Uber flipping a "fair wages" switch.
The trick is essentially that at the end, the loan (or the shares that replace it) goes into default(become worthless).
This is an old, old game, and one that can be run for a few short years, before it all ends in tears, and "whocoodanode" (to coin an americanism). Let´s just hope there isn´t too much pension fund money tied up in all this.
Overall, they are losing money as a company. And if you divide that out by the number of rides, you can make it seem like they are losing money.
So to think they couldn't be cheating drivers because of that is like saying we know Donald Trump never cheated anyone in business from 85-95 because he lost money for every year that decade.
Minimum wage is the floor. If tips don’t bring your cash wage up to minimum, the employee has to get paid.
That's Lyft's problem, not the drivers'. They could always find more money by charging higher fares and maintaining a fleet of identical cars for drivers to rent, but then they'd just be a taxi company, not a "tech platform." If they want to keep offering VC-subsidized rides, that's fine by me. And when they run out, they can decide whether they want to stiff their drivers even more, or raise their fares.
And yes, the American tipping system needs to die.
It's not clear that they'd actually end up with more money as a company or more money for drivers this way. I'd expect they could pay many fewer drivers somewhat more, but total payments to drivers would be much less.