In the last few weeks, discussions of Uber and Lyft have turned into questions about recent state legislation in California and New Jersey that the rideshare companies have wanted to overturn. Attempts to turn Uber and Lyft drivers from contractors into employees have spread madly and begun to affect millions of self-employed entrepreneurs in many types of occupations.
Forget about the broader horizons of regulation for a moment. For those who want to make money, some of the news has been disappointing, with studies suggesting that many have been making little. New York City passed a minimum wage law for rideshare drivers in 2018. But is everyone just getting by?
Not according to the most recent survey results about pay and conditions from The Rideshare Guy site and there's some good (and some bad) news.
Owner Harry Campbell has a mailing list of tens of thousands of people who subscribe to his information. He asked for people to respond about pay and conditions (as he has done for a few years) and received 947 "qualified drivers." Typically, this isn't a study I'd cover because it is self-selected, as it can only represent his readership. But turnover is high in rideshare because many people try and find it not to their liking. Campbell reaches people with a serious interest in driving for Lyft or Uber who might be more likely to be representative of running a business in the industry.
Money seems to be getting better for these drivers, who are probably better at running a rideshare business than someone new. The result is odd because, as Campbell notes, rates have been dropping for the last few years. But since 2017, income has gone up--possibly because people have become more skilled at operating their businesses or maybe it's just luck as to who responded.
The gross average hourly for Uber was $19.73 per hour (up from $15.68 in 2017), with an after-cost net of $13.47 an hour. For Lyft it was $17.49 an hour (fairly flat from $17.50 in 2017) before expenses and $11.55 after.
That seems disappointing if you're going to take all the time and effort of being responsible for a business. People are netting out significantly more per hour than the federal minimum wage of $7.25 an hour. But as of next year, minimum wages in many states will be higher: $13.50 in Washington; $13 in California; $12.75 in Massachusetts; $12 in Connecticut, Maine, Colorado, and Arizona; and $11 in New Jersey and Maryland. Then again, plenty of states are sticking with $7.25 an hour.
Then there's driver satisfaction. Only 47.8 percent of Uber drivers agreed either strongly or somewhat with the statement, "Overall, I am satisfied with my experience driving for Uber." For Lyft, the number was 52.4 percent. And for people who drove for both (almost 84 percent of them), it was 44.5 percent, which seems particularly curious. The more people drove, the less happy they were.
Two-thirds of the drivers say they want to be independent contractors. However, I've found over many years that many people who say they want to be in business in one way or another aren't necessarily cut out for it or don't want the responsibilities.
Then the survey asked people what cities could do to help the drivers--which again runs into this dichotomy of a business owner's responsibility and the desire of an employee to be taken care of. Some of the answers: enact higher rates (55 percent), cap the number of rideshare drivers (36 percent), and more bathrooms (33 percent).
Creature comforts aside, this collection of answers and preferences shows a major issue. The drivers want government to give them what they need but don't want to be employees. Some city regulators have shown an inclination to make special rules for rideshare drivers but most have not. And the rideshare companies, while showing in California that they're willing to support such things as a form of minimum wage and driver subsidies for healthcare, they don't want the legal responsibility, or cost, of employees.
This is going to be something that won't see an easy solution in the near term, or probably further out. And the more state governments get involved, the greater the possibility that all sorts of entrepreneurs will pay a price, one way or the other.