A rally organized by the New York Taxi Workers Alliance on May 8. (Twitter/@elementartyy)
  • Analysis

Drivers strike ahead of Uber’s public offering today

As Uber goes public, ride-hail drivers amp up their calls for better pay and working conditions through increased regulation.
A rally organized by the New York Taxi Workers Alliance on May 8. (Twitter/@elementartyy)

On May 8, Uber, Lyft and other ride-hail drivers in New York City went offline during morning rush hour, joining over two dozen cities around the world that went on strike ahead of Uber’s initial public offering today. Drivers are demanding higher wages and better working conditions, which they say have deteriorated over the past few years. In New York City, the strike was aimed at pressuring the City Council to pass new legislation on regulating the ride-hailing industry amid Uber and Lyft’s efforts to push for further deregulation and corporate-friendly policies.

Drivers rallied in front of Uber and Lyft’s Long Island City headquarters in the afternoon and chanted “We want cap now” and “Driver power, union power.” Then, New York Taxi Workers Alliance executive director Bhairavi Desai addressed the crowd.

“In 2015, when the City Council backed down from capping the number of for-hire vehicles temporarily — straight out of that victory for Uber and Lyft — Wall Street overloaded them with money, which they used to saturate the streets with cars,” Desai said. “By the end of the year in 2015, the streets were flooded. By January 2016, Uber and Lyft started to cut the fares and that was the beginning of the race to the bottom.”

A few men behind her held signs with the names of six professional drivers that have committed suicide since that time. Through years of organizing, the Taxi Workers Alliance has been able to push New York to regulate the industry more than many other cities around the country. Still, Desai said, drivers face foreclosures, bankruptcy and eviction.

Since 2010, when Uber first came to New York, the city has become the largest market for the ride-hailing app in the country. Desai pointed out that of the 130,000 for-hire vehicles in the city, around 80,000 are app-based cars, primarily those of Uber and Lyft, which remain empty 42 percent of the time. “There is absolutely no reason beyond corporate greed for why there would be no cap on the number of vehicles,” Desai said.

She explained that Uber and Lyft have created a “false narrative” around a supply problem, noting that a quarter of all Uber drivers leave the company within a year. Her solution: Treat the workers better. “Regulation is the only thing that will bring stability back to this industry and keep a workforce of 100,000 people from going deeper into poverty.”

Following a study that found 85 percent of drivers made less than minimum wage, the City Council passed legislation for a minimum of $17.22 per hour before taxes — a victory drivers saw at the end of last year. The City Council also passed legislation to temporarily stop issuing for-hire vehicle licenses for 12 months and is scheduled to hold another vote on a vehicle cap on Aug. 8.

Previous Coverage
  • New NYC regulations on Uber and Lyft a victory for union organizing
  • Inder Parmar, who’s been driving for Uber for six years says he relies on support from his children, who are now out of college. “Uber used to pay us $2.60 a mile in 2013. Today they pay us $1.25 a mile.” Had his children still been in college,” he told the crowd, “I would most probably have had to sell my house for their college fees.”

    Passing comprehensive legislation at the federal level will prove even more difficult and those organizing for higher pay and increased job security face an uphill battle. A study by the National Employment Law Project notes that companies like Uber and Lyft have followed an aggressive strategy of state interference similar to those pursued by the NRA and tobacco industry.

    The study’s authors wrote that in 2016 “Uber and Lyft lobbyists outnumbered Amazon, Microsoft and Walmart combined.” Many of these efforts were focused on the state and local level. Forty-one states, the study found, have either “overrule[d] or preempt[ed] local regulations” on app-based vehicles and, in two states, “Uber wrote or co-wrote the original drafts of legislation.”

    If it weren’t for the fact that drivers are classified as independent contractors — exempting them from traditional full-time employee benefits like workers compensation, healthcare and the ability to form a union — Uber, with its fleet of three million drivers, would be the world’s largest employer. To put this in perspective, Uber is larger than the United States Department of Defense (2.87 million), the People’s Liberation Army of China (2.5 million), and Walmart (2.2 million).

    With a driver base that large, a coordinated strike is nearly impossible, but the strike was still large enough to generate headlines across the media spectrum — while also raising concerns about the future of the company, as it enters the stock market. Estimates put the IPO at over $80 billion, making it one of the largest in U.S. history. Many within the company are expected to make millions overnight, adding to the $143 million in total compensation that Uber’s top five executives saw last year alone.

    The strike also garnered support from some politicians in Congress who are in more of a position to reign in an industry that sees no limits to its potential growth. Bernie Sanders, Alexandria Ocasio-Cortez and Elizabeth Warren were just some of the strike’s supporters in Washington. Last year, Sanders introduced legislation to the Senate revising how the National Labor Relations Act defines “employee” to extend traditional employment rights — like forming a union — to gig economy workers.

    Under the Trump administration, however, the Department of Labor, in a recent statement, reaffirmed the classification of gig economy workers as independent contractors, a move that further empowers tech companies at the expense of drivers across the country.

    “They are making clear that while technology can often be an instrument of progress and efficiency, we cannot allow it to be another corporate weapon against workers,” Sanders wrote in an op-ed for the San Francisco Chronicle.

    If Uber’s IPO goes anything like Lyft’s — which went public in late March and has since seen its shares plummet — the company’s prospects don’t look good. Worse still is what a flop IPO would mean for workers, who could face more “deactivations,” as they say in Silicon Valley. At this point, the only recourse that drivers have is to keep organizing for a greater share of the company’s revenue through increased regulation, such as the minimum wage passed in New York City.

    Others have proposed more drastic measures. In The Nation, Mike Konczal calls for socializing the company entirely. Uber’s executives contribute very little, he writes, while “workers labor individually, doing the same tasks, so there’s no need for a management class to control their daily operations.” Costs such as insurance, licensing fees and vehicles are already paid for by drivers. The only thing executives really provide is a software platform in the form of a phone app, a negligible cost when considering the approximately 15 million trips drivers complete each day.

    Taking the company from the New York Stock Exchange to being worker-controlled isn’t likely to happen anytime soon, but it would give a whole new meaning to the term sharing economy.

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