If Lyft wants to decide when their drivers are working, there's a process for this:
1) Hire employees
2) Give them a schedule
3) Pay them hourly plus mileage
They are contractors because they do not have any set obligation for time. Rate of pay or overall pay has nothing at all to do with that. According to the IRS they do not have a set schedule and they are contractors (that is 1099, not W2).
So they are contractors. What does that have to do with pay? Absolutely nothing. You want x and are willing to pay y. Maybe there’s an opportunity for me to negotiate for z, maybe not. Either way none of that has anything to do with the actual form of employment. Even if I were a salaried employee working 40 hours a week the company has a budget of $40,000 a year and that’s all they will pay. If I demand $45,000 they’ll just tell me no - they simply don’t have the money.
In this case Uber offered you $x. You agreed to $x. You have no schedule, which is the perk of the job vs driving a cab, where you will have a schedule. Need to take the kids to school or a doctor’s appointment? Well, work that around your work schedule.
And as for your third point... Uber already charges me for both time and mileage. I don’t see any problem with them paying their drivers based on both... but from the drivers I’ve talked to they already do. I can’t speak for any other service at all.
When did they agree on $X? There's no contract between the drivers and Uber stating they they will work for a given amount.
The app sets rates based on supply and demand. Uber offers them $X. The drivers decide they don't want to work for less than $Y. If demand is sufficient, Uber eventually offers them $Y.
Surge pricing is basically a negotiation between company and driver. Just because the drivers have found a case in which they have extra leverage doesn't make it wrong or fraudulent.
I'm not sure where the line is between the two. But given that the market in question is the drivers' labor — and the ongoing question of whether the drivers are employees or contractors of these multi-billion dollar companies — I'm inclined to consider this "labor organizing" rather than "price fixing".
The value of x was established under different circumstances. What's wrong with bumping that to 1.5x as soon as you have the power to do so?
When the cab industry was "the system", Uber and Lyft beat the system and made money. Now the drivers are beating the Uber/Lyft system and making money.
Viva disruption.
EDIT: Actually Uber/Lyft beat the cab system and lost money, but that's another kettle of fish.
This is not true. Uber and drivers did not sign any contract specifying set rate.
Every ride that is offered to drivers has price based on supply/demand. Drivers are free to cancel jobs if they feel the offered rate is too low.
I never said they agreed to an hourly rate, I said they agreed to a rate, and they did.
I'm not saying they're not contractors, I'm saying if Uber wants drivers who will work at a specific constant rate instead of signing out and demanding surge rates before they'll sign back in, then that's too bad for Uber. They created a market for driver contractors, and the drivers are participating in it. If they want shift employees who are obligated to stay logged in when a plane lands, they can hire some.
>In this case Uber offered you $x. You agreed to $x. You have no schedule, which is the perk of the job vs driving a cab, where you will have a schedule.
It's working exactly as intended then, Uber offers $x, drivers say "I'm not interested in driving for $x." Uber automatically counters with "Fine, I'll pay you $y."
Uber could make their system more hesitant to offering surge pricing after a bunch of drivers sign out like this, but when it comes down to it this isn't even a strike. The drivers haven't agreed to take fares at the lower rate, and Uber isn't entitled to their labor at any particular cost. They can all go home if they want to.
>And as for your third point... Uber already charges me for both time and mileage. I don’t see any problem with them paying their drivers based on both... but from the drivers I’ve talked to they already do. I can’t speak for any other service at all.
My point is that if Uber wants drivers a fixed particular price than then their "everyone is contractors" solution isn't appropriate. They can hire employees on an hourly wage to take shifts where they're paid whether or not they're currently driving a fare (mileage on top of that is to cover vehicle expenses). Sometimes they'll be busy, other times they'll have a slow night.
They don't get to have their cheap no strings attached driver arrangement cake and then also whine when drivers sign off and prices spike.
So if Lyft starts to say "we always want X drivers available as a base load, and we'll open up to contractors to fill in the demand spikes" it might make the contractor role too unreliable for anyone to bother doing it. At the very least, their costs would go up for both the employed drivers and the extra contractor drivers. Since their valuations comes mainly from a cheap labor pool, that presumably kills it.
But in the current situation, if all their drivers at the airport sign off and say "I'm not driving at these prices," you get surge pricing to make it worth driving, that increases costs too. That's what happens when you're buying labor from independent contractors - if they don't want to sell it to you at a particular time for any reason, they don't have to.
The real question here is "If Lyft recognizes when these organized sign-offs are happening, calls their bluff, and refuses to activate surge pricing, what happens?"
Do the drivers really refuse to drive at the regular pricing and go home? Or do they all give in to a more tamper-resistant algorithm and keep driving at regular rates?
Any suggestions?
"ride for hire"
"car for hire"
"fee for service"
Lyft isn't ride sharing because people aren't dividing up cars to rides, not because money is involved. Car2Go/Flexcar are car sharing. Carpooling is ride-sharing.
I wonder if they will change the algorithm to just tell the drivers what they want to hear. To wit - Introduce a new multiplier for drivers based on their behavior. This will factor into the final price, but be obfuscated. Then Lyft can tell the drivers they are receiving a greater surge than what the rider sees, and pays.
What taxi companies have drivers as actual employees and not independent contractors?
--edit--
Never mind, read that backwards...
I suspect this will happen one way or the other, as something that cannot be sustained will not be -- something's got to give, either rates will go up, costs will go down, or the companies will fold.
Rates probably have some room to rise. My limited experience is mostly airport rides, where they are cheaper than limo's taxis. But I'd still pay the same as the competing services, since Lyft has always been more reliable and pleasant. The main competition is parking.
Lower costs? I don't think so, short of automation. The drivers' costs & compensation have already evidently been pushed to the limit, as they are starting to strike.
Will they sort out either? I'm not buying either stock, even at the discount prices...
Except world wide (or us wide).