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Uber and Lyft Can’t Find Drivers Because Gig Work Sucks

You may have noticed recently that an Uber ride is more expensive than it used to be. As ride-hail companies Uber and Lyft hike prices to record heights during the COVID-19 pandemic, much commentary has settled on explaining this as a consequence of a “labor shortage” largely motivated by a lack of proper financial incentives. Drivers, the story goes, saw the new cash bonuses offered by companies to lure workers back as insufficient. Some, perhaps, decided they were not worth the risk of getting infected with COVID-19 or one of its budding variants, while other analyses suggested drivers were content with living on stimulus funds rather than money from driving. At the same time, the firms began curtailing subsidies that kept prices low enough to attract riders and work towards monopoly. Together, this has left us with a sudden and massive spike in ride-hail prices; Gridwise, a ride-hail driver assistance app, estimated that Uber has increased its prices by 79 percent since the second quarter of 2019.

While Uber and Lyft are reportedly thinking about offering new perks such as education, career, and expense programs, analysts admit these don’t strike at core problems with the gig economy that were driving workers away before COVID-19 hit and are making it difficult to attract them now. In conversations with Motherboard, former and current ride-hail drivers pointed to a major factor for not returning: how horrible it is to work for Uber and Lyft. For some workers, this realization came long before the pandemic reared its head, and for others, the crisis hammered it home. Motherboard has changed some drivers’ names or granted them anonymity out of their fear of retaliation.
“If I kept driving, something was going to break,” said Maurice, a former driver in New York who spent four years working for Uber and Lyft before the pandemic. “I already go nights without eating or sleeping. My back hurt, my joints hurt, my neck hurt, I felt like a donkey. Like a slave driving all the time.”

“I’ve been driving for six years. Uber has taken at least 10,000 pounds in commission from me each year! They take 20 percent of my earnings, then offer me 200 pounds,” Ramana Prai, a London-based Uber driver, told Motherboard. “I don’t understand how they can take 60,000 pounds from me, then offer nothing when I’m in need. How can I provide for my partner and two kids with this? My employer has let me down.”

“I woke up every day asking how long I could keep it up, I just didn’t feel like a person,” Yona, who worked for Lyft in California for the past six years until the pandemic, told Motherboard. “I got two kids, my mother, my sister, I couldn’t see them. And I was doing all this for them but I could barely support them, barely supported myself.”

“I was making even less than my sister and I was probably less safe too,” Yona’s sister, Destiny, told Motherboard. “She got out back in the spring, I hopped on and was coming back negative some days. I tried UberEats and DoorDash to see if that was any better, but stopped after a friend was almost robbed on a delivery. Okay, so the options are get covid or get robbed, then guess what: I’m doing none of them.”

Motherboard argues that the degrading working conditions, as well as the poor pay, “are structurally necessary for ride-hail companies. They were necessary to attract and retain customers with artificially low prices, to burn through drivers at high rates that frustrate labor organizing, and bolster the narrative of gig work as temporary, transient, and convenient. It’s no wonder, then, that drivers aren’t coming back.”

Gig Workers for Target’s Delivery App Hate Their Algorithmically-Determined Pay

In 2017 Target bought a same-day home-delivery company called Shipt for $550 million. Shipt now services half of Target’s stores, reports Motherboard, and employs more than 100,000 gig workers.

Unfortunately, they’re working for a company that “has a track record of censoring and retaliating against workers for asking basic questions about their working conditions or expressing dissent,” reports Motherboard. For example, an hour after tweeting about how there was now much more competition for assignments, one Seattle gig worker found their account suddenly “deactivated” — the equivalent of being fired — and also received an email saying they were no longer “eligible to reapply”.

“They stamp out resistance by flooding the market with new workers…” complained one Shipt worker, “and they’re actively monitoring all the social media groups. ”
On its official national Facebook group, known as the Shipt Shopper Lounge, which has more than 100,000 members, Shipt moderators selected by the company frequently censor and remove posts, turn off comments sections, and ban workers who speak out about their working conditions, according to screenshots, interviews, and other documentation provided to Motherboard. The same is true on local Facebook groups, which Shipt also monitors closely, according to workers. Motherboard spoke to seven current Shipt workers, each of whom described a culture of retaliation, fear, and censorship online…

Because Shipt classifies its workers as contractors, not employees, workers pay for all of their expenses — including gas, wear and tear on their cars, and accidents — out of pocket. They say the tips on large orders from Target, sometimes with hundreds of items, can be meager. Workers say Shipt customers often live in gated and upscale communities and that the app encourages workers to tack on gifts like thank you cards, hot cocoa, flowers, and balloons onto orders (paid for out of their own pocket) and to offer to walk customer’s dogs and take out their trash, as a courtesy. Shipt calls this kind of service “Bringing the Magic,” which can improve workers’ ratings from customers that factor into the algorithm that determines who gets offered the most lucrative orders…

Unfortunately, that new algorithm (which began rolling out last year) is opaque to the workers affected by it — though Gizmodo reported pay appears to be at least 28% lower. And Motherboard heard even higher estimates:
“Our best estimate is that payouts are now 30 percent less, and up to 50 percent on orders,” one Shipt worker in Kalamazoo with two years under her belt, who wished to remain anonymous for fear of retaliation, told Motherboard. “I fluctuate between extreme anger and despair. It’s been three weeks since this has been implemented, and one of my good friends told me that she’s down the equivalent of a car payment.”

Another Shipt worker in Palm Springs, California provided Motherboard with receipts for a 181-item order that included six Snapple cases, five La Croix cases, and 12 packs of soda. They had to wheel three shopping carts out of a Ralph’s grocery store and deliver them — and earned $12.68 for the job. The customer did not tip. (Under the older, more transparent pay model, they would have earned $44.19.) “That’s a real slap in the face,” they told Motherboard.

Half of US Uber drivers make less than $10 an hour after vehicle expenses

Uber lures drivers with the idea of being your own boss and “making great money with your car.” The “great money” part is up for debate.

The median hourly pay with tip for Uber drivers in the U.S. is $14.73, according to a new study conducted by Ridester, a publication that focuses on the ride-hail industry. That figure includes tips but doesn’t account for expenses like insurance, gas and car depreciation incurred while working. Using Ridester’s low-end estimate of $5 per hour in vehicle costs, drivers would bring in $9.73 per hour and potentially much less.

That implies a driver working 40 hours per week would make an annual salary of almost $31,000 before vehicle expenses, and about $20,000 after expenses (but still before taxes). That’s below the poverty threshold for a family of three.

This is important because online “gig economy” jobs, including driving for Uber, are a growing part of the U.S. workforce: About 5 percent of the working population has worked in the gig economy in the past year, up from 2 percent in 2013. So their labor is increasingly tied to overall prosperity. Additionally, these workers are still typically considered contractors, meaning that they aren’t required to receive employer healthcare or other employee benefits.