This month, a group of mostly Black and immigrant Uber and Lyft drivers in Minneapolis won their fight for a minimum pay rate when the Minneapolis City Council refused to be bullied by the rideshare corporations.
The companies had publicly threatened to abandon the city if the minimum wage law passed, claiming that paying drivers more would force them to steeply jack up fares. This sets up a showdown over the future of the gig economy: Will Uber get away with using threats — that our research finds are not grounded in fact — so they can continue paying poverty wages while giving billions to Wall Street, or will more and more cities stand with drivers and set a new route for the industry?
Over the past few years, there has been a wave of protest and organizing by rideshare drivers who are fed up with shrinking paychecks and arbitrary “deactivations” (essentially being fired without so much as a conversation with a human) that leave people unable to cover the bills and look after their families. But nearly every time drivers get close to winning legislation to set higher standards, Uber and Lyft pull out the same argument: that higher pay would make rides unaffordably expensive.
Often, they wrap this claim in the language of racial and economic justice, expressing worry that higher fares would especially harm people of color and low-income folks. Such handwringing is particularly rich given that one study found rideshare corporations charged people more if they were picked up or dropped off in predominantly non-white neighborhoods, and because in many cities drivers are mostly people of color and newer immigrants.
In Minnesota for example, a state-issued report found that 60 percent of drivers are Black (in a state where Black people make up about 7 percent of the population) and 61 percent were born outside the U.S.
The data don’t support Uber and Lyft’s fearmongering. While rideshare corporations are notoriously secretive about their data, two U.S. cities, Chicago and New York City, require them to report detailed information on each trip. We used that data to conduct the largest-ever study of rideshare fares.
In New York City, drivers overcame Uber’s threats and won a minimum pay rate that went into effect in February 2019. Chicago has no such law. If Uber’s claims were true, fares should have gone up more in New York. But the opposite happened. Uber and Lyft raised fares more in the city where drivers have no pay protections: by 54 percent over four years in Chicago compared to 36 percent in New York over the same period.
Uber is certainly jacking up fares, yet driver pay is falling nationwide. In 2023 Uber drivers in the U.S. made 17 percent less on average than they did in 2022, despite working just 3 percent fewer hours. An independent analysis of Uber’s financial disclosures revealed that while revenue per trip has increased in recent years, the corporation is pocketing more and more of the fare.
So where’s all the money going? As best we can tell, into the accounts of banks and billionaires.
For years, Uber relied on billions of dollars from venture capitalists like BlackRock and Jeff Bezos to offer low fares for riders and high pay for drivers. This allowed the corporation to undercut competition, sign up millions of customers and corner the market in major cities. Since going public on the stock market, Uber has come under considerable pressure from investors to turn a profit and deliver returns. It has responded by hiking fares and keeping more of them.
Our analysis of Uber’s financial disclosures shows that since the corporation went public, average fares have increased by 65 percent while Uber’s share of the fare has increased. The result: After 14 years and $33 billion in losses, the company reported its first-ever annual profit on Feb. 7 this year. Uber promptly announced a $7 billion stock buyback program, promising to reward its shareholders on the same day rideshare drivers across the country were marching for fair wages and livable conditions.
This research makes clear that Uber and Lyft’s threats are a product of greed and gamesmanship that don’t reflect reality. And in Minneapolis, a group of drivers that started organizing via WhatsApp are showing how to resist Uber’s bullying. The day after the city council first passed the pay standard, the mayor vetoed the ordinance, citing Uber and Lyft’s threats to leave. On March 14, the council overturned his veto, sending a powerful signal that communities are no longer falling for Uber’s claims.
Yet even as drivers and local taxi companies are preparing to keep serving riders if Uber and Lyft abandon Minneapolis, Uber is turning to another of its favorite tactics: trying to block the law from taking effect.
Uber is turning to the statehouse, which could pass legislation banning the Minneapolis ordinance. Minnesota lawmakers and Gov. Tim Walz have a choice: Will they give in to Uber’s threats and allow Uber and Lyft to keep paying poverty wages, or will they follow Minneapolis’s lead and raise standards for drivers across the state (and perhaps even create a public alternative to Uber and Lyft)?
Minneapolis is not the only city where drivers are gaining ground. In Chicago, drivers have spent two years organizing at airports, talking with elected officials and sharing their stories outside Uber’s offices. In response, a majority of the city council has committed their support to the Chicago Rideshare Living Wage and Safety Ordinance. Uber and Lyft have of course made their oh-so-familiar threats (one Lyft spokesperson claimed the proposal would “more than double the cost of rides”), but that’s a hard sell when drivers and the data so clearly tell a different story.
Ultimately, Uber and Lyft’s predatory pricing and deceptive tactics harm all of us. Falsely claiming that wage protections will drive up fares seems to be a tactic to pit drivers against passengers and obscure a massive transfer of wealth to Wall Street. Minneapolis, Chicago and more cities have the chance to say enough is enough, that Uber’s bullying has to stop and that racial justice starts with paying drivers (who are mostly people of color) a reasonable wage.
It’s time to tell Uber it can no longer take us all for a ride.
Lauren Jacobs is the executive director of PowerSwitch Action, a national network forging a multiracial feminist democracy and economy through local organizing.
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