Will Your Wallet Be Affected by the Uber and Lyft Strikes?
Thousands of drivers for Uber, Lyft and DoorDash were striking across the U.S. on Valentine’s Day, demanding fair pay and better treatment. If the ride-share and food delivery platforms increase drivers’ wages, will consumers pay higher rates?
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Workers claim the platforms are taking a disproportionate share of their fares as fees, Reuters reported. This comes after Uber saw its shares hit a record after announcing a $7 billion share buyback.
“While Silicon Valley and Wall Street take an ever-increasing cut of driver earnings, they’re raising rates on passengers, and expecting consumers and workers alike to accept their increasing corporate greed,” according to a news release from Justice for App Workers, a national coalition movement of more than 130,000 rideshare drivers and delivery workers.
Potential wage increases could mean that consumers make up the difference, but ride-share giant Uber claims otherwise.
In response to the strike, Uber told USA Today in a statement that strikes “have rarely had any impact on trips, prices or driver availability.” Lyft also stated that the company constantly works to improve the driver experience, and had recently announced it would guarantee drivers would make 70% or more of rider fares after external fees.
Between 2018 and 2022, Uber’s prices in the U.S. have increased four times the rate of inflation for a total of 83%, according to a Forbes analysis. This is the equivalent of an annual price increase of 17.5% per year. However, Uber’s CEO Dara Khosrowshahi stated in the company’s Q4 earnings call that the cost of Uber has increased similarly to other products, but the company is “actively looking to keep a lid on price.”
Despite record earnings for ride-share and delivery platforms, drivers struggle to make ends meet. Francisco Magdaleno, a 55-year-old Uber driver living in Los Angeles, told USA Today that on a $50 fare, he only makes $25 and struggles with the region’s high cost of living.
The publication also noted an average Lyft drivers’ gross hourly pay was $21.44 in the second quarter of 2023, and Uber drivers’ hourly pay was $18.80 in the same period, according to the gig-work data tracking app Gridwise. However, a Lyft white paper stated that drivers earn $30.68 gross per hour of engaged time in the second half of 2023. Khosrowshahi said drivers made $33 per utilized hour in the fourth quarter.
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