The pandemic has had far-reaching implications that have been felt by people all over the world, and the ride-hailing industry is no different.
According to a recent report released by UCLA, companies like Uber and Lyft are claiming an unprecedented share of fare dollars while drivers struggle through the COVID crisis.
Since 2019, when drivers began receiving a city-guaranteed minimum wage, ride-hail companies have been taking an ever-growing slice of the pie. By April 2020, these companies had taken their biggest piece yet. The data collected in the UCLA study indicates that riders were paying more for fares during this same time period, leading researchers to conclude that these companies were charging higher prices in order to offset the costs of compensating drivers at minimum wage levels.
“Drivers during that month of April 2020 – everybody felt that death was imminent, and drivers were frontline workers exposed to COVID at a higher rate,” Bhairavi Desai, executive director of the Taxi Workers Alliance (TWA), said. “And the few that had the desperation to go out to work were not rewarded for their essential labor – they were actually exploited.”
A new report from the UCLA Labor Center has revealed that app companies such as Uber and Lyft have been taking an increasingly large share of the fare payments from riders since New York City implemented a minimum wage requirement for drivers in 2019, with this trend peaking during the COVID pandemic.
The TWA recently released a report showing a growing disparity between the fares that riders are charged and the wages that drivers receive. The report states that this gap increased to 21.4% in April 2020, with Desai calling it an exploitation of essential workers during a time of crisis.
Desai highlighted how drivers were exposed to higher risks of contracting COVID-19 due to their frontline role, while struggling to make ends meet amid rising costs for personal protective equipment, disinfectants and plastic barriers for reducing contact with passengers. Despite being crucial for the transport industry, these workers have not been fairly compensated for their service, Desai said.
Ride-hailing companies have been found to be taking a larger share of the profits from recent passenger fares, according to a new report. The study, conducted by researchers at Columbia University's Mailman School of Public Health determined that the gap between what passengers pay and what drivers receive had widened after a minimum wage guarantee was established in February 2019.
According to the report, ride-hail companies increased their take from 9% during the first month of the pay guarantee to 21.4% in April 2020 – the deadliest month for the COVID-19 pandemic in New York City. Although there has been a slight decrease to 20.7% by April 2022, driver earnings were still lower than before the implementation of minimum wage standards. Specifically, drivers took home one dollar less per trip even though average passenger fares remained nearly unchanged between February 2019 (at $12.22) and April 2020 (at $12.32).
Uber and Lyft, two of the most popular ride-hailing companies in the world, have responded to a recent report that claims drivers are not making as much money as they used to. In a joint statement between the two companies, spokespersons for both Uber and Lyft dispute these findings.
CJ Macklin of Lyft says driver earnings have risen over the past few years and that with lower gas prices now in effect, drivers are able to keep even more of their pay. Similarly, Uber spokesperson Freddi Goldstein has noted that the data used by the TLC (Taxi & Limousine Commission) is limited and that Uber's take rate was at 16.4% in April 2022.