$21 per hour minimum working as Uber or Lyft driver
In California, state lawmakers are about to pass a bill that will make ride share drivers classified as employees. Ride-sharing companies have responded by offering to pay drivers a minimum hourly wage of $21, but labor activists say the hike isn't enough.
The measure, known as AB 5, passed the California State Assembly in May and is expected to pass the state Senate next week. It will then head to Gov. Gavin Newsom, who has put his full support behind the bill. Such a move would require gig economy companies to provide a wide array of benefits—including paid time off, worker's compensation, and reimbursement for expenses.
Presently, Uber and Lyft have agreed to pay a $21 minimum wage, which would apply both when driving a passenger and when en route to pick up a new one. As it is in California, many states are following suit to create leverage in this business for their citizens
On the flip side, changing the status of these workers from independent contractors to employees could affect the number of drivers who work on the platform. In particular, a study considers how the number of drivers on the platform changes according to different work schedule and cost increase scenarios. It found out that increases in the cost of providing the service coupled with the introduction of formal work schedule arrangements, would likely lead to considerably fewer drivers working on the platform. Lyft would require as many as 300,673 fewer drivers in California under certain, plausible scenarios. Drivers who use the service to supplement their primary source of income account for the largest share of workers on the service. Such a change would have far-reaching consequences for many industries for which independent contracting is integral to their current operations, and for many workers for whom independent contracting is an important source of income. • It is widely believed that such changes would have a big impact on the companies of the “gig economy.” In particular, if ride-sharing companies reclassify independent contractors to employees, this would radically transform their existing operations.
Ever since Uber CEO resigned due to scandal, the company has been trying so hard to clean its image. Someone said Uber has lost its mojo as Uber shares fell 6% recently as the company continues to report quarterly loss .“Clearly, there’s not a lot of confidence in the leadership,” contended Tusk, Uber’s first political strategist. “Some of what Travis represented in innovation, change and intensity is lacking at the company now, and the stock is clearly reflecting that.”
What do all these new regulations have to do with the actual taxi industry that have almost been wiped out of the market? Good news for the ailing taxi economy. There have been more demand in taxis due to so many unpleasant news going around ride share companies lately. Cab companies will survive in time if they will bring down their fares. When looked into unfair fees and rules imposed by states and counties on taxi companies, it is extremely difficult to compete with ride share companies. In the state of Georgia, for example in Richmond County, operating a taxi company requires mandatory commercial insurance which runs between $200-$300 each month per vehicle, mandatory annual inspection of each taxi through the sheriff department, mandatory payment of business license annually at the Richmond County business license office by each driver(as if they owned the business), mandatory state sales tax, Augusta regional airport gate fee(paid each time you enter the gate), which is not included in the $1 million company insured policy yearly. In fact, Georgia department of Public safety has its own annual registration fee which companies have to pay. When all these fees are considered while ride share drivers do not have to pay any, it is very vivid that taxi companies were intentionally targeted to fail.