Uber, Lyft drivers to strike and rally ahead of Uber's IPO

Uber, Lyft drivers to strike and rally ahead of Uber's IPO

Uber, Lyft drivers to strike and rally ahead of Uber's IPO

Drivers around the world are striking and protesting Wednesday in response to Uber's initial public offering in a dispute that highlights the growing divide between the booming tech industry and struggling working class. Workers earning the median wage in L.A. would need to work 102 hours in a month to earn the city's median rent, more than in other high-cost cities like San Francisco (84 hours) and NY (89 hours). Today, Uber pays out drivers on a per-mile and per-hour basis.

And those challenges come on top of a basic legal challenge: Uber and Lyft classify drivers as independent contractors, not employees. Uber is paying more than a million drivers about $300 million in one-time bonuses for instance, and has changed policies such as allowing riders to tip.

Lyft said drivers' hourly earnings have increased over the past two years, and drivers take home more than $20 per hour on average - though the company did not provide a median wage as an example of how that figure translated across its contract workforce. Over 75 percent drive less than 10 hours a week to supplement existing jobs.

Lyft told the news outlet: "We know that access to flexible, extra income makes a big difference for millions of people, and we're constantly working to improve how we can best serve our driver community".

Together, drivers for the two companies provided about 91,000 rides per day in the Seattle area, according to ridership reports filed with the city past year.

In Uber's filing with the US Securities and Exchange Commission earlier this year, the company said it continues to "experience dissatisfaction with our platform from a significant number of drivers". Activists have suggested Uber may remove surge pricing for riders to make it look like the strike is not effective, or raise surge pricing on the drivers' apps to incentivize them to break the strike. As the ride-hailing services have expanded, they also have become critical for public transit agencies in filling service gaps or providing paratransit services. The New York Taxi Workers' Alliance called for a rush hour strike, during which drivers will turn off the Uber, Lyft, Juno and Via apps from 7 to 9 a.m., and then rally outside Uber and Lyft headquarters in Long Island City. Protests are reportedly expected in at least eight USA cities, including Chicago, Boston and Philadelphia.

According to a recent study from Georgetown University's Kalmanovitz Initiative for Labor and the Working Poor, which spent two years investigating the working conditions of 40 Uber drivers in the D.C. area, 33% took on debt that resulted from driving for Uber.

Drive United said the action was in solidarity with protests in the U.S. and other areas of the world where drivers struggle with the independent contractor model.

One driver on strike in London, Muhumed Ali, said he wants Uber to boost fares and take a smaller cut of sales.

A question now is how investors will view the risks associated with the ongoing debate that's so core to Uber's business.

In addition to powering off their apps, drivers will hold rallies held in strategic locations such as outside local Uber offices.

Shares of Lyft have been in a slump since the company's own IPO, falling 23% since its first day of trade on March 29 and IPO price of $72. Uber executives are poised to make billions when the company goes public on Thursday. Uber, for instance, has around 12,000 employees, but over 2 million people are registered as drivers on the platform.

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