Uber, Lyft Driver Strike & The Role of Regulators

Yesterday, there were reports on the upcoming strike by Uber and Lyft drivers ahead of the former’s IPO in order to demand minimum or at least higher wages for drivers. Despite claiming that drivers are an indispensable part of their business and having programs such as Lyft Direct or Lyft Driver Centers to support drivers, the ride-sharing companies employ the ones behind the wheels on a contractor basis, not a permanent basis. Hence, drivers are less protected by the laws regarding their benefits.

The thing is that these strikes, in my opinion, are unlikely to change the status quo. First of all, Lyft and Uber lose millions of dollars every quarter. Even if they wanted to help out drivers, I don’t think they would prioritize it over keeping the expenses down. Secondly, I don’t think they want to. Lyft and Juno sued NYC to block the minimum wage bill. Though they may argue the bill will tip the advantage towards a larger business such as Uber, it is clear that they care more about their survival than the drivers, as most of us would if we ran a business like that.

It brings me to the role of regulators. NYC successfully enforced the minimum wage bill. The likes of Uber, Lyft or Juno have no choice but to comply if they want to continue to operate in the Big Apple. It is something that other cities can emulate. Pass an official bill to raise the minimum wage. I don’t think these share-riding companies can afford to exit markets in America, especially bigger and more expensive ones like LA, SF or NYC. If driver minimum wages are raised, it will likely be more expensive for riders. Nonetheless, there will be opportunity for other businesses to come in and offer more affordable transportation alternatives.

While the strikes will bring more publicity and exposure to the issue, I don’t think it can be solved without the lawmakers.

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