Tag Archives: Lyft

Uber and Lyft reach agreement to increase driver pay: a victory for major tech corporations

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When the Minneapolis City Council announced agreements with Uber and Lyft last month to increase wages and enhance working conditions for drivers, who emerged as the winner?

On May 20, the city council revealed a compromise with ride-hailing companies: Uber and Lyft would adhere to an inflation-linked minimum wage aligning with Minnesota’s $15 hourly minimum wage post expenses. Although some lawmakers touted this as a 20% pay surge for drivers, the agreed rate was lower, surpassing nearly all proposals from the previous two years amidst a contentious battle involving Uber, Lyft, drivers, and lawmakers.

Key elements of the deal include the allowance for drivers to contest firings due to opaque algorithms, funding for a non-profit driver center for driver rights education, and a raised insurance coverage requirement to $1 million for ride-hailing drivers to address post-trip medical expenses and lost wages following an assault or accident.

However, since the deal remains a vital component of digital ride-hailing services, Uber and Lyft can sustain operations and potentially reverse the compromise in the future.


Over the course of two years, ride-hailing driver groups engaged in protests, advocacy efforts, and negotiations with Uber as the companies threatened capital strikes and announced withdrawal from the state multiple times due to the bill, causing political strife for both entities.

By resorting to capital strikes, these companies narrow the scope of our political discourse while bolstering their own influence. The digital ride-hailing model perpetuates worsened working conditions for drivers through misclassification and algorithmic control, and the Minneapolis deal fails to address data transparency, constituting a significant setback according to expert Veena Duvall from the University of California, Irvine.

While the deal provides instant benefits for drivers by averting Uber and Lyft’s potential exit from the state, it falls short of addressing fundamental structural challenges within the on-demand labor model.

The on-demand labor model relies on maintaining an asymmetric power balance between companies, passengers, drivers, and cities, sidestepping issues of misclassification, data extraction, and algorithmic control.

Uber and Lyft exhibit adeptness in reducing arguments to superficial levels, deterring meaningful change and reform within the industry. Despite the evident need for intervention to improve drivers’ conditions, the omnipresent influence and evasion of billions in taxes by such companies underscore the challenge of enacting lasting reform.

Ultimately, the digital ride-hailing model remains fundamentally flawed, necessitating a comprehensive reevaluation of its impact on urban transport, working conditions, and financial practices, urging a departure from the prevailing exploitative dynamics in favor of sustainable alternatives.

Source: www.theguardian.com

Minneapolis drivers successfully protest for wage increase, leading Lyft and Uber to exit city rather than pay fees.

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Uber and Lyft have announced the suspension of their operations in the Minneapolis area in protest of a newly passed minimum wage ordinance by the City Council.

The ordinance, set to take effect on May 1, establishes a minimum wage of $1.40 per mile and 0.51 cents per minute for rideshare drivers, with a minimum wage of $5 per ride. Despite the mayor’s veto being overridden by the City Council, Uber and Lyft have threatened to leave the area in response.


If the companies proceed with their plans to halt operations on May 1, Minneapolis will stand as the only city in the U.S. without Uber or Lyft services.

Advocates for the bill highlight the low wages and high costs faced by rideshare drivers. They assert that wages have decreased, leading to support for the ordinance.

Eid Ali, a veteran rideshare driver and president of the Minnesota Uber Lyft Drivers Association, has been terminated. Uber and Lyft argue that the minimum wage is unsustainable for maintaining affordable fares for riders.

Ali expressed his disbelief in the actions of the multi-billion-dollar companies, emphasizing the need for fair compensation and a living wage for all workers.

Should Uber and Lyft exit the market, Ali believes that other entities are prepared to step in. He believes their fight is not solely about the minimum wage but also about its implications on the broader market.

Farhan Bader, another rideshare driver, highlighted the undervaluation of drivers’ roles in society and argued for fair compensation amid declining pay and increased working hours.

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Efforts are underway by Minnesota lawmakers to introduce a bill preempting Minneapolis regulations to retain Uber and Lyft in the area.

Uber’s senior director of communications, Josh Gold, expressed disappointment in the City Council’s decision and emphasized the need for collaboration to ensure drivers receive fair wages while keeping rideshare affordable.

A Lyft spokesperson also voiced support for state-level preemption and raised concerns about the impact of the minimum wage ordinance on drivers’ income and the accessibility of ridesharing services.

Uber and Lyft’s clash with regulators over wages and working conditions reflects a broader trend seen in the industry both in the U.S. and globally.

Source: www.theguardian.com

Lyft CEO takes responsibility for typo in financial results that led to 60% rise in stock price

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Lyft performed well in the fourth quarter, exceeding profit expectations due to increased rides to stadiums and airports and significant cost savings.

However, the company’s stock price initially rose over 60% in after-hours trading, but most of those gains were erased after Lyft’s chief financial officer corrected a major error in its earnings report. The company had initially predicted growth of 500 basis points (5%) in 2024, but later announced that the actual growth rate was lower at 50 basis points (0.5%). In 2023, the stock price had risen by about 36%.

Lyft CEO David Risher acknowledged the mistake, saying in an interview the following day: bloomberg“Bad. This was a terrible error, but there was one zero.”

Lyft reported that stadium attendance increased over 35% from 2022, driven primarily by popular tours and sporting events. The company also highlighted improvements to airport transportation as contributing to its growth.

Under new leadership, Lyft implemented an aggressive restructuring plan last year, including staff cuts and the removal of management to pursue profitability. The company laid off 1,200 employees in April and reduced overall costs by 12%.

“We’re going to put more money into the bottom line because we can scale even further and keep costs flat,” Risher said.

Lyft also announced a new policy to pay drivers the difference if their income, after outside fees, is less than 70% of what a passenger pays. In addition, Lyft and Uber agreed to pay $328 million to a New York rideshare driver accused of withholding pay and benefits.

There are growing concerns about safety, job security, and the general fear of artificial intelligence with regard to self-driving cars. Lyft is addressing this by partnering with Motional to provide more than 100,000 self-driving rides across the United States.

Revenue for the quarter ended Dec. 31 was $1.22 billion, in line with analyst expectations. The company expects earnings before interest, taxes, depreciation, and amortization to be between $50 million and $55 million for the quarter, exceeding expectations of $46.3 million. Lyft’s fourth-quarter adjusted core profit was $66.6 million, also beating expectations of $56.2 million.

Source: www.theguardian.com