Uber and Lyft present themselves as giving drivers the opportunity to “be their own boss” as independent contractors. Despite their flashy PR blitz promising easy earnings, signing bonuses, and total flexibility on the job, Uber and Lyft management decisions are made with anything but drivers’ interests at heart. The companies spent a historic $205 million on 2020’s successful campaign to pass California’s Proposition 22, which gives app-based, on-demand transportation and delivery companies a special carveout from California labor law—and is already having devastating effects on gig workers in the state.
In an unprecedented step, more than 2,500 New York City drivers have launched Co-op Ride, a new worker-owned rideshare platform that could defeat Uber and Lyft with New Yorkers’ support.
Co-op Ride gives all drivers who sign up a part ownership stake, so they control how the company is run. Espirman Dumé described his two and a half years driving for Uber and Lyft as “an experience where I didn’t feel included. I didn’t feel like I’m a part of the decision making.” The Co-op Ride management is accountable to the drivers through democratic elections. “If you have been trying to start your business as a driver, this is it,” Michael Ugwu, who has been driving for six years using Uber or Lyft, told More Perfect Union. “Because the management is the drivers. The people making the decisions are your fellow drivers. The board members are your fellow drivers.”
Drivers having an ownership stake in their company and a seat at the table in company decisions is a huge shift from Uber’s business model. Uber drivers are “supervised” by semi-automated and algorithmic systems that track their acceptance rates, time on trips, speed, customer ratings, and other metrics, and drivers can be “deactivated” if they fall below a threshold. In New York City, Uber and Lyft established a tiered quota system for drivers that restricts the number of drivers who can log on at any given time, with preference given to drivers who drive the most. This means an increasing number of drivers are driving a minimum of 60 hours a week to avoid having their hours cut on the app. With democratic decision-making, Co-op Ride drivers will not be subject to these exploitative management practices.
Co-op Ride also distinguishes itself from Uber and Lyft by giving drivers a greater share of riders’ fares. When riders book a ride through Uber, they pay a booking fee and a fee per minute and mile of their trip. Uber takes up to 40 percent of the cost of a ride as a “service fee.” Despite stories of rising Uber prices, drivers are not benefitting from these higher fares, even with surge pricing driving prices up as much as 50 percent.. Some drivers have experienced paltry or even negative earnings as a result of Uber’s exploitative corporate practices. “They don’t care about the drivers. They care about the money they are making from you,” said Ugwu.
Co-op Ride, on the other hand, only takes 15 percent of the cost of a ride, “a break-even fee which funds the co-op’s operations,” according to Erik Forman, a labor organizer and Co-op Ride co-founder. In addition, Co-op Ride sets its hourly minimum wage 10 percent higher than New York City’s minimum for rideshare drivers established in 2018. Any profits are then paid back to the drivers as dividends.
The worker-owner structure and lower operating fees also allow the Drivers Cooperative to charge lower rates to riders. More Perfect Union tested the different platforms by requesting estimates for the same rides in each application, and Co-op Ride offered fares up to 16 percent lower than Uber and Lyft.
This year, Lyft, Uber, and other allied gig work companies worked closely with New York state lawmakers on legislation that would have given drivers some rights to join a union-like group, effectively in exchange for remaining classified as independent contractors rather than employees. Though worker advocates have stopped this bill for this legislative session, it’s clear these companies hope to pass similar laws in New York and throughout the country. At the national level, gig companies are spending big to try and kill the PRO Act, a landmark bill which would allow gig workers to join unions. “In a very sick and twisted way, Uber and Lyft are taking money out of drivers’ pockets and using it to bankroll a nationwide assault on workers’ rights,” said Forman.
Competing with Silicon Valley and Wall Street-backed behemoths might seem like a daunting challenge, particularly as Uber and Lyft deflate their prices to dominate the industry. But the Co-op Ride drivers remain unfazed. Forman noted that “all we need for this to be successful is for New Yorkers to make a choice: instead of using Uber or Lyft to get around, use Co-op Ride.” “I’m excited. Not nervous,” Dumé added, “I just feel like as a driver this puts me in the driver’s seat.”