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Los Angeles Uber & Lyft Drivers Held a One Day Strike...What Happens Now?


Yesterday, hundreds of Uber and Lyft drivers in Los Angeles held a one day strike in which they refused to pick up riders.  The strike, organized by RideShare Drivers United, was intended to bring attention to a recent wage cut that Uber put in place that Uber drivers strongly disfavor.  (RideShare Drivers United is a nonprofit that was started to help drivers for ridesharing companies organize across the world.  The group reported it has gone from a membership of about 300 drivers to about 3,000 in the course of two years.)  Uber's wage cut will see its drivers earn 25% less, earning 60 cents per mile driven now rather than 80 cents.  (The Lyft drivers went on strike as a show of solidarity for Uber drivers.  Although for those that have used Uber, Lyft, or another ridesharing app previously, many drivers drive for more than just one company.  As a result, it is likely that a majority of the drivers that went on strike yesterday drive for Uber and Lyft.)  For those drivers that say they are struggling to make ends meet at their current wage rate, this wage cut creates a significant financial shortfall that many cannot afford to absorb.

As some observers have noted, this one day strike comes at a somewhat tenuous time for Uber.  Both Uber and Lyft are reportedly taking steps to become publicly traded companies.  In doing so, early investors could realize a potentially big return on their initial investments, should the IPO launch be favorably received.  However, if that IPO launch comes at a time when drivers are striking, making their discontent known, and generally creating an air of uncertainty about the financial future of ridesharing companies, that could depress the initial IPO launch (and consequently decrease a potential financial windfall for many.)

Of course, many readers are likely wondering what happens now.  Keep in mind that Uber and Lyft drivers are independent contractors.  As a result, they do not receive the traditional benefits that an actual employee would receive.  Therefore, Uber and Lyft drivers are not eligible for a minimum wage rate, overtime, nor do they have the ability to unionize.  With that being said, as yesterday's strike shows, even though these drivers do not have the ability to unionize, they have still managed to organize and make their dissatisfaction known.  As for what the drivers want, namely they are looking for Uber to do away with the pay cut.  Going one step further, the drivers also want pay raises by having drivers be given a guaranteed $28/hour minimum wage rate.

At this point, neither Uber nor Lyft appear willing to bump up the pay rate for their drivers.  As they have stated, they believe their pay rate is reasonable and set at a rate that enables drivers to earn a good deal of money.  With the current labor market favoring workers, however, it is possible that neither Uber nor Lyft have the ability to play hardball over the long term.  However, it was reported that while yesterday's strike was ongoing, the average wait time for an Uber in the Los Angeles area was still under 5 minutes.  Perhaps Uber and Lyft can weather the storm?


 

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