Nearly 2 million drivers power the ride-hailing business of Lyft, the San Francisco company that had its initial public offering Friday.
Lyft is second in the industry in the United States only to Uber. It had 1.9 million drivers at the end of 2018, compared with Uber’s 1 million drivers in this nation alone. The part- and full-time drivers respond to riders who hail them using mobile phone apps, a model that has upended the transportation industry over the past several years.
Drivers are growing increasingly disgruntled amid the fierce competition between the two ride-hailing giants, both of which are bleeding money. Lyft lost almost $1 billion last year, while Uber lost $1.8 billion.
Several dozen Lyft and Uber drivers protested Monday in San Francisco, complaining about working conditions and pay cuts. That same day in Los Angeles and San Diego, where Uber recently slashed what it pays drivers from 80 cents a mile to 60 cents a mile, some drivers who are looking to unionize held a one-day strike.
Edward Escobar, founder of the Alliance for Independent Workers and a driver for Lyft and Uber in San Francisco, said in an interview Thursday that he’s making 80 percent less than what he used to make five years ago.
The ride-hailing companies “are squeezing drivers into poverty, despair, suicide,” Escobar said, pointing to a reported suicide by a Lyft driver in New York City last week, the ninth known suicide of a taxi or ride-hailing driver there since 2017.
Rebecca Stack-Martinez, who also drives in San Francisco and is head organizer with Gig Workers Rising, said in an interview this week that Lyft — which generally has a better reputation than Uber because of the latter’s controversies over the past few years — usually matches Uber’s rate cuts.
“Now that they’re going to have investors putting pressure on them to earn a profit, who are they going to come after?” she said. “Drivers, of course.”
A Lyft spokeswoman said Friday that the company provides drivers with flexibility to work when they want and “has led the industry in initiatives like in-app tipping, same-day payments” and more. This week, Lyft unveiled a no-fee bank account and debit card for drivers, discounted car-repair services and expanded car rentals.
In its prospectus ahead of its IPO, Lyft said it would give onetime cash bonuses to drivers that can be used to buy shares in the company. Drivers in “good standing” who have driven at least 10,000 rides will receive $1,000, and those who have driven at least 20,000 rides will get $10,000. Members of the Driver Advisory Council — made up of 10 drivers from the U.S. and Canada and which is adding drivers from 40 other cities — will also get $1,000.
Drivers’ sentiment is also intertwined with their status as independent contractors. Classifying drivers as employees, which could be on the horizon after last year’s California Supreme Court ruling and subsequent legislative efforts to codify that ruling, could blow up the ride-hailing giants’ business models.
