From 7 to 9 a.m. on Wednesday, Uber, Lyft, Juno, and Via drivers went on strike in New York City. Their work stoppage was one of several that took place in major cities around the world. In a press release, members of the New York Taxi Workers Alliance complained of low pay and worsening work conditions. Syed Ali, identified by NYTWA as an Uber driver, said he’s striking because the company “has broken their promises to drivers time and again.” At first, he added, working for Uber had seemed like a promising gig. “But then Uber cut our rates and they tried to tell us we’d be earning more even though they paid us less. What kind of craziness is that?”
There’s data to back up the drivers’ claims. Last year, analysis from the JPMorgan Chase Institute found that drivers for Uber and Lyft make “less than half of what they did four years ago.” That decline may be attributable in part to a decline in the number of hours drivers work, but Uber has also reduced per-mile pay rates for drivers. As Vox reported in March, the company cut rates by 25 percent in Los Angeles County and certain areas of Orange County; at the time, drivers picketed the company’s offices in L.A.
Wednesday’s global strike shows the mettle of an emerging labor movement. Gig workers are organizing, and as Noah Smith noted at Bloomberg, the latest rideshare strikes coincide with an overall increase in the number of American workers involved in work stoppages. While this certainly isn’t the first time drivers have voiced their dissatisfaction, with both Lyft and Uber going public this spring and a vast field of Democratic presidential candidates touting their labor bona fides, the demonstrations are drawing new scrutiny.
Lee Carter is intimately familiar with both the drivers’ grievances and the political issues they raise. A Democratic lawmaker who represents Virginia’s 50th District in the state House of Delegates, Carter told New York that he began driving for Lyft a month and a half ago to compensate for the low pay. (Members of the House of Delegates receive $17,640 a year for their service in the state’s part-time legislature.) “The important thing to remember about rideshare platforms versus traditional taxis is that ride-sharing platforms really put all of the risk and all of the upfront costs onto the drivers. So it’s our cars, our gas. It’s our insurance,” he said. “And we’ve got people that are becoming billionaires overnight off of these ideas that have never driven a single mile with a passenger. And that’s because of the hard work of drivers.”
Carter, who participated in Wednesday’s strike, said he usually drives late at night, when he’s finished with tasks for his reelection campaign. “For a lot of people, it’s not extra money on the side,” he noted. “For a lot of people, it’s their primary job, driving for these rideshare companies. They’re doing it for 50, 60 hours a week.”
Some drivers have to work even longer than that to make ends meet. The Guardian reported on Tuesday that some Uber drivers in San Francisco have begun sleeping in their cars; high rents have pushed them out of the city and forced them into longer commutes, and they must keep hectic work schedules to cover costs. “To make a living and survive in San Francisco, we have to drive 70 or 80 hours per week,” one driver, Sultan Arifi, told the news outlet. “Living expenses keep going up, and Uber keeps decreasing how much they pay drivers.”
When you pull up your app and call an Uber, a full third of the fee you pay goes to Uber and not to your driver, the left-leaning Economic Policy Institute reported in 2018. Once Uber takes its cut, driver compensation averages around $11.77 an hour — but from there, the sum continues to shrink. Take out Social Security and Medicare taxes, and EPI found that hourly pay is around $10.87. EPI defined that sum as discretionary income, so it’s an assumption, really, that drivers “do not provide themselves the equivalent of the health and retirement benefits or social insurance programs.” If they do, EPI estimates that they earn a real wage of $9.21 an hour.
App drivers in New York City make more, but only because the City Council passed a pay raise in 2018. As Vox noted at the time, the law closes a loophole that companies like Uber and Lyft have long been able to exploit. By classifying drivers as contractors instead of employees, companies like Uber and Lyft are able to skirt minimum-wage laws. (Uber has consistently claimed that its drivers are self-employed — an argument that’s been more successful in the U.S. than it has in Europe.) Despite the pay raise, New York City drivers say they’re still struggling to make a living.
Uber and Lyft, meanwhile, are navigating delicate moments in their corporate lifespans. Uber is scheduled to begin publicly trading this week, a move that will make top shareholders very wealthy — though, as Reuters previously reported, the rideshare company admitted in its IPO filing that it may never turn a profit. Lyft faces its own struggles. On Tuesday, the New York Times reported that in its first quarter as a publicly traded company, Lyft “posted a loss of $1.14 billion for the first quarter, compared with a loss of $234.3 million in the same period a year earlier.”
The complaints of rideshare drivers highlight both the limitations of Silicon Valley’s industrywide conflation of innovation with progress and the high-profile support that Uber, and other rideshare companies, have received from ostensibly liberal sources. HuffPost founder Arianna Huffington joined Uber’s board of directors in 2016, and the company is also one of many Silicon Valley corporations to draw high-profile veterans of the Obama administration. David Plouffe briefly worked for Uber. Lyft hired former Obama Transportation secretary Anthony Foxx in 2018, and Valerie Jarrett, an Obama adviser, joined the company’s board in 2017. In her memoir, Jarrett said that Lyft’s founders are “shrewd businessmen” who “also believe in diversity as a strength. They believe in a social conscience and a commitment to our cities.”
But Uber and Lyft may not be able to count on such a comfortable relationship with the administration of the next Democratic president — whoever they are, whenever they take office. On Wednesday, several Democratic presidential candidates expressed their solidarity with Uber and Lyft drivers.
Mother Jones reported on Wednesday that the campaigns of Andrew Yang, Eric Swalwell, Cory Booker, Tim Ryan, and Kristen Gillibrand would not cross picket lines. Uber, Lyft, Juno, and Via may not want to admit their drivers are workers, but the next occupant of the White House might disagree.
Taxi drivers should be exempt from NYC congestion pricing, council members say
Yellow cabbies should be exempted from congestion pricing tolls coming to Manhattan as well as a surcharge that is already in place, according to two City Council members.
Councilmen Ydanis Rodriguez and Fernando Cabrera on Tuesday called on Gov. Andrew Cuomo and the MTA to establish the carveout before the new tolls take effect, which is expected in 2021. Their request came in response to an extensive investigation from The New York Times detailing how thousands of immigrant workers fell victim to predatory loans that saddled them with crippling debt, as lenders fattened their pockets and the government ignored warning signs.
“Our taxi drivers are currently facing a financial epidemic unlike we’ve ever seen. This crisis … did not happen overnight,” said Rodriguez, the chair of the Transportation Committee. “This is the result of an accumulation of lack of leadership and bad decisions for many decades.”
Yellow taxis and other for-hire vehicles are already subjected to a congestion pricing surcharge, which took effect in February. Yellow cabs operating in Manhattan below 96th Street saw an added $2.50 fee on top of the $5.50 base fare just to get in the vehicle. Ubers, Lyfts and other car services driving in the area are hit with a $2.75 surcharge.
The surcharge has angered the professional driving industry and arrived amid a series of driver suicides, which advocates have blamed on economic hardships plaguing the industry.
But the request to be exempt from the surcharge and a future toll flies in the face of transportation experts and environmental advocates who have argued exceptions would lessen the impact of the policy — both from the standpoint of traffic reduction and transit funding.
Rodriguez and Cabrera, the later of whom opposes congestion pricing outright, are the latest politicians to speak out following the Times’ investigation, though the issues had been reported before and overlooked by city, state and federal elected officials. New York Attorney General Letitia James announced an investigation into lending practices around taxi medallions and Mayor Bill de Blasio followed with a separate investigation into the brokers involved in arranging the loans.
“The review will set down strict new rules that prevent broker practices that hurt drivers,” de Blasio said in a statement. “It’s unacceptable to prey on hardworking New Yorkers trying to support their families and we’ll do all that we can to put an end to it.”
It’s not clear yet what impact the congestion surcharges will have on the yellow cab industry, though the former commissioner of the city’s Taxi & Limousine Commission predicted they would be “devastating.” Yellow taxi trips have actually increased slightly as the new fees took effect, from 247,315 average daily trips in January of this year to 252,634 in March. But monthly averages tend to have sizable fluctuations and trips are still down when you compare that three-month span to the same point last year — part of a long downward slide in trips that came as e-hails like Uber and Lyft flooded the city with cars.
The MTA and the governor’s office did not respond to requests for comment.
“Without an exemption from the congestion surcharge, taxi drivers — whether they are lease-drivers or owner-drivers — simply won’t earn enough to survive, even if their expenses go down,” said Bhairavi Desai, the executive director of the New York Taxi Workers Alliance.
One in 6 Uber and Lyft Cars Have Open Safety Recalls, Consumer Reports’ Study Suggests
Among the tens of thousands of Uber and Lyft vehicles registered to operate in New York City, there’s a 2011 Hyundai Sonata GLS with eight unaddressed safety recalls that range from a potential seat-belt detachment to even more alarming examples, such as possible engine failure.
Millions of riders rely on ride-hailing services Uber and Lyft for daily transportation. But according to a Consumer Reports review of data from New York City and the Seattle area, a notable number of ride-hail vehicles registered for Uber and Lyft service, about 1 in 6, carry unaddressed safety defects.
“Uber and Lyft are letting down their customers and jeopardizing their trust,” says William Wallace, a CR safety policy advocate. “Uber’s website says people can ‘ride with confidence,’ while Lyft promises ‘peace of mind,’ yet both companies fail to ensure that rideshare cars are free from safety defects that could put passengers at risk.”
As Uber and Lyft announced becoming multibillion-dollar IPOs earlier this year, CR decided to check on the safety of the privately owned vehicles that are key to company operations and are now used by more than 100 million consumers.
CR reviewed safety records for about 94,000 vehicles registered as operating for the companies in NYC and King County, Wash. (home to Seattle), two major ride-hailing hubs with local governments that require drivers to register vehicles and obtain an additional license to work through regulators. The CR analysis of the data is meant to provide a snapshot of open safety recalls among ride-hailing cars in the industry, but it might not reflect the national market.
We found vehicles with glaring issues that pose serious risks, such as deadly Takata airbags that could hurt or kill the driver or front-seat passengers. There were unfixed defects involving the potential for vehicles to catch fire or for engines to lose power entirely. For example, one of the 2011 Sonata’s open recall notices says, “Engine failure would result in a vehicle stall, increasing the risk of a crash.”
It’s unclear whether any ride-hail customer or driver has been injured because of an issue related to an open safety recall, and the rate of open recalls we found for registered ride-hail vehicles in our investigation is about the same rate estimated for all vehicles on the road. But as Uber and Lyft aim to transform daily transportation for consumers, they’ve taken only minor steps to ensure their drivers get recalls addressed, CR’s review found. And that could have unintended consequences for the riding public.
CR thinks stronger safety recall laws are needed, especially as Uber and Lyft work to grow their business in the coming years and as other smaller players enter the industry.
Uber and Lyft allow vehicles on their platforms as long as they are legally registered and no more than 10 to 15 years old, depending on the area where they’re located. Local ordinances may be more restrictive, with requirements for a vehicle inspection or for drivers to obtain a legal permit to work. But neither company has a black-and-white policy in place regarding all open recalls.
In response to our questions, Uber and Lyft said they’ve taken a number of steps to address unfixed recalls in vehicles on their platforms. Uber, in particular, says it encourages and reminds drivers to get recalls fixed, and it identifies and blocks vehicles on its platform that have some of the most dangerous open recalls, ones with “DO NOT DRIVE” warnings from the manufacturer or the National Highway Traffic Safety Administration.
Those warnings, however, make up only a sliver of all vehicles on the road with unaddressed recalls.
“Uber, Lyft, taxi companies, and anyone offering for-hire rides should check cars for open recalls, and ban any with unrepaired safety defects from picking up passengers,” CR’s Wallace says. “If they won’t do so, states and local governments should make them.”
CR’s review also found that:
About 1 in 6: Of the 93,958 vehicle identification numbers (VINs) associated with ride-hailing vehicles in New York City and King County, Wash., that CR examined, 15,175, or 16.2 percent, had one or more open safety recalls. (Because ride-hailing drivers can work for more than one company, we grouped results together for vehicles associated with Uber, Lyft, and, for New York, smaller competitors Juno and Via.)
Takata: A number of vehicles have outstanding recalls associated with numerous deaths, such as faulty airbags made by Japanese car-parts manufacturer Takata. Those airbags have been linked to 24 deaths across the world, including 16 in the U.S., and remain in 1,274 of the vehicles cited in CR’s review, about 1.4 percent of the total.
Problem vehicles: Some vehicles had a significant number of open safety recalls: 25 vehicles in the Seattle area and NYC had at least five or more unfixed recalls.
On a par with all private vehicles: The Uber and Lyft vehicles we looked at are about on a par with all personal vehicles on the road. Our analysis also found the open recall rate for some other for-hire vehicle services in NYC to be slightly higher. CR reviewed more than 32,000 VINs affiliated with for-hire vehicles, such as traditional taxis, limos, and liveries, and found the open recall rate for that group to be 23.6 percent.
Cars older than a decade: The ride-hailing companies both have varying standards for vehicle eligibility, depending on the city or type of service, but there appear to be slips in enforcing the rules. In Seattle, for example, Uber and Lyft currently say vehicles should be no more than a decade old. But CR’s review of records from King County found more than 40 cars licensed to operate there with a listed vehicle model year of 2007 or older. Uber says under King County regulations enacted in March, permits will no longer be issued to drivers with vehicles more than a decade old. Lyft says it considers any vehicle with a current window decal that’s legally needed to drive as valid to operate on its platform.
Onus on drivers: Uber and Lyft take only minor steps to ensure open recalls are addressed, leaving the onus primarily on drivers.
Ride-hail companies conduct their operations through intuitive smartphone apps that allow customers to quickly request nearby vehicles to come and pick them up. The fare amount is predetermined based on the pickup spot and destination requested, as well as consumer demand. The service is meant to be a quick and easy transaction.
To get a snapshot of the industry’s open recall rate, CR obtained VINs for ride-share vehicles operating in NYC and King County, Wash., as of January this year. VIN data for drivers in the industry are scarce, but NYC and King County produced them in an online database and in response to a public records request, respectively. With the numbers, we were able to track down which vehicles had unaddressed recalls, in the same way any consumer can check on their own vehicle or a used car they might want to buy.
We processed the VINs through a tool that checks to see whether a car still has an open recall. The tool was developed by Carfax, which allows consumers to monitor whether their car has an open recall either through their website or, if hailing a ride through Uber or Lyft, on an app called myCarfax.
Consumer advocates say Uber and Lyft, with their billion-dollar valuations and technological prowess, can—and should—do far more to ensure consumers are kept safe, and reduce the open recall rate. For example, some advocates point out that Uber and Lyft could use VINs to identify and ban vehicles with open recalls from operating on their platforms.
“Uber and Lyft have the ability to have zero recalled cars on their platforms at the push of a button,” says Jason Levine, executive director of the Center for Auto Safety. “They both claim to be technology companies yet refuse to use that technology to take this obvious step to decrease the danger from unrepaired recalls on their drivers and customers.”
Uber and Lyft launched initial public offerings this year to sell shares on Wall Street, even as they faced criticism about the economic feasibility of their business models and labor conditions for their drivers. The ride-share platforms—Uber and Lyft are by far the biggest in the U.S.—rely on contract workers using their private vehicles, a largely unregulated relationship.
There are risks to their gameplan. The profits may never materialize, for one thing, and the model itself is predicated on a host of what-if scenarios, including the potential liability both can face with issues such as car crashes. Uber, for example, made clear to prospective investors in its filing with the Securities and Exchange Commission that it may be subject to “claims of significant liability based on traffic accidents, deaths, injuries, or other incidents.”
What the Companies Say
Uber and Lyft representatives told CR in written statements that a number of initiatives are in place to encourage drivers to address recalls.
Uber says it recognizes the role it can play “in helping keep the roads safe for everyone.”
“As part of our commitment, we’re proactively blocking vehicles with open recalls that include a ‘Do Not Drive’ notice from the manufacturer or NHTSA from the app until they have taken action on their vehicle,” an Uber spokesperson tells CR.
Uber regularly reminds drivers and provides resources to check their vehicles for open recalls, the company says, and it participates in the NHTSA biannual campaign to raise awareness about getting recalls fixed.
Lyft told CR that it works with lawmakers and regulators, including local elected officials, to create rules and regulations around vehicle safety. Lyft added that by using personal vehicles, drivers are representing that their vehicles meet industry safety standards and legal requirements.
“Lyft drivers use their personal vehicles to drive on the platform—the same car they use in their daily lives, driving their kids to school or friends around town,” Lyft says in a statement. “Drivers have a strong personal incentive to make sure their car is in a safe operating condition.”
Ride-share drivers do have the option to work for multiple companies. In King County, drivers who meet the requirements for a Transportation Network Company license can currently drive for four companies—Uber, Lyft, and smaller competitors Moovn and Wingz. (CR’s public records request from King County covered only drivers who registered for a license to drive with an affiliation to Uber or Lyft, which represents a majority of licensed drivers in the area.)
It’s slightly more complicated in NYC. Drivers there have a TLC license issued by the Taxi and Limousine Commission, which acts like a “universal” license, meaning the drivers can work within several transit sectors, including black car services and even traditional cabs, says Allan Fromberg, deputy commissioner for public affairs at the NYC Taxi and Limousine Commission, which regulates for-hire vehicles in the city.
CR’s analysis of NYC vehicles included VINs associated with Uber, Lyft, and two of their smaller competitors in the city, Via and Juno. The VINs and owners are published on the city’s Open Data website.
One of the vehicles CR reviewed in the Seattle area is a 2011 Ford Fusion SE, which records show has five open recalls, including an unfixed Takata airbag. It’s not unusual for a passenger to sit up front if they’re using one of the companies’ lower-cost shared-ride options—Uber Pool or Lyft Line.
“If an Uber or Lyft car is under recall for a faulty Takata airbag on the passenger side and this safety defect hasn’t been fixed, then a passenger would be taking on significant risk sitting in the front seat,” CR’s Wallace says. “Defective Takata airbags have killed people when they explode with excessive force, sending shrapnel into the cabin of the car.”
Federal and state regulations offer little official guidance for ride-hailing companies related to open recalls.
Federal auto safety regulator NHTSA has the power to order a recall, but it doesn’t have direct oversight of Uber and Lyft, only the manufacturers of vehicles operating on the ride-hailing networks. California recently passed a law that requires startups that provide a market for “peer-to-peer” car rentals, such as Turo and Getaround, to check for recalls. But the law doesn’t apply to ride-hailing companies, such as Uber and Lyft.
“The new law benefits not only the consumers who drive the cars they find on those platforms but also the vehicle owners, who too often don’t get the safety recall notices from the manufacturers, and may be totally unaware their car is unsafe and needs to be repaired,” says Rosemary Shahan, president of Consumers for Auto Reliability and Safety, a national watchdog group based in California that supported the legislation.
“Uber and Lyft would be wise to adopt the same practices the rental car companies have adopted nationally, and Turo and Getaround have adopted in California, rather than waiting for a high-profile tragedy to occur before they screen out vehicles with unrepaired safety recalls,” she says.
NYC yellow cabs are required to pass three inspections each year in order to operate on the road, but that doesn’t include a check for safety recalls. Same goes for vehicles that are certified to receive a “for-hire vehicle” license, which includes Uber and Lyft drivers. They’re also required to receive three inspections by New York state, but not a check for open recalls.
“We’ve been checking for open recalls, but administratively and not as a part of the vehicle inspection process,” says Fromberg, the deputy commissioner for public affairs at the NYC Taxi and Limousine Commission.
Drivers have a balancing act of sorts to consider when it comes to their vehicles: safety, of course, but also their bottom line. Aleksey Medvedovskiy, president of NYC Taxi Group, a fleet of cabs based in Brooklyn, says that he wants to “make sure our cars are working nonstop.”
“We don’t necessarily bring the car into the dealer to get it fixed,” Medvedovskiy says. “We check through the website, we check what open bulletins they have … If the vehicle gets to a dealer, it can sit there for days until it gets back on the road, and that’s what we don’t want.”
If it’s a major issue, such as a faulty brake pump, the vehicles are brought into the dealer to address the recall with the manufacturer, he says. But if a transmission breaks or there’s a problem with the tire wall, it’s easier to bring it into the taxi company’s repair shop.
“We fix them as we go,” he says. But if they consider the recall to be a safety defect, he says, they “react instantly.”
The situation for taxi drivers who own their cabs is similar to those who drive for Uber and Lyft: They receive recall notices; they have to get cars fixed on their own.
“Inspections are the responsibility of the vehicle’s owner or lessee, in the case of long-term leases and lease-to-own agreements, a category that includes many Uber/Lyft drivers,” Fromberg says. Recalls are the responsibility of owners, too, he says.
A Lack of Information
In many cities where Uber and Lyft operate, the companies ask for standard information—driver’s license and insurance, records of a vehicle inspection—for drivers to sign up. Some municipalities go further and require a permit or business license for drivers to operate, such as in Los Angeles or Clark County, Nev.
NYC publishes a continuously updated list of ride-hailing affiliated VINs on its Open Data website, and King County made a list of VINs for active Uber and Lyft drivers available to CR in response to a public records request. The City of Chicago, however, denied CR’s request for VINs, citing privacy laws and arguments made by Uber and Lyft.
In a letter dated Dec. 28, 2018, Lyft said that disclosure of VINs would violate the privacy of drivers and claimed that it possesses “significant” economic value in keeping them secret.
“If Lyft’s driver information is disclosed, a competitor could enter the market, or increase its market share, without substantial development by ‘free-riding’ on Lyft’s driver list,” the letter said.
Chicago agreed, saying that “proprietary information that would cause competitive harm is exempt from production.”
What Consumers Can Do
If consumers want to stay apprised of whether the ride-hail car they call to pick them up has a safety defect, one solution is to download the myCarfax app.
Once an Uber or Lyft rider is connected with a driver, they’ll receive details about the driver’s car, including the license plate number. From there, they can open myCarfax and punch in the license plate number of the vehicle, which then immediately reveals whether or not it has an open safety recall.
How New York taxi drivers were conned and bankrupted by medallion loan sharks
“I don’t think I could concoct a more predatory scheme if I tried. This was modern-day indentured servitude.” That’s what Roger Bertling, the senior instructor at Harvard Law School’s clinic on predatory lending and consumer protection told The New York Times about sleazy operators who hyper-inflated the price of taxi medallions (which allow you to own a taxi in New York) and bankrupted drivers who took out loans to buy them.
From the article:
“People love to blame banks for things that happen because they’re big bad banks,” said Robert Familant, the former head of Progressive Credit Union, a small nonprofit that specialized in medallion loans. “We didn’t do anything, in my opinion, other than try to help small businesspeople become successful.”
Mr. Familant made about $30 million in salary and deferred payouts during the bubble, including $4.8 million in bonuses and incentives in 2014, the year it burst, according to disclosure forms.
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