Edgar N. recently drove six college students from Toad’s Place to Fairfield. He earned $82 for the late-night, 26-mile ride. Uber pocketed another $49 from the same trip.
Edgar decided to wheel up to Hartford to demand that the actual laborers of the ride-share economy get a fairer share of earnings from such rides.
Edgar joined two dozen local Uber and Lyft drivers at the state Legislative Office Building in Hartford to support Senate Bill (S.B.) 989, a proposed law that would increase the proportion of dollars earned by drivers for any given ride-share ride. It would also restrict the proportion of dollars allocated to the coordinating “transportation network” company.
Over 100 people turned out for the the state legislature’s Labor and Public Employees Committee public hearing, which stretched from 11 a.m. until late Thursday night, driven mostly by hours of testimony on a proposal to increase the state’s minimum wage to $15 per hour.
A 42-year-old native of Nairobi, Kenya, and a maintenance technician who has been driving for Uber for the past four-and-a-half years, Edgar made the early-morning commute from his Ninth Square apartment to the state Capitol to show his support for the proposed driver rights legislation.
“I ask myself,” Edgar asked, “Who did most of the work?” The drivers charged with ferrying passengers safely and comfortably from one spot to another, in vehicles where they have to cover their own gas and car insurance and upkeep? Or the company that provides the software that connects Edgar with his passengers?
The key provision of the proposed bill would require Uber, Lyft, and other on-demand ride share services to pay their drivers at least 75 percent of the amount collected from passengers on any given completed ride. It would also restrict the companies’ own share to no more than 25 percent of the total amount of money collected by one of their drivers on a given day.
Uber and Lyft do not employ drivers as full-time workers. Instead, drivers work as independent contractors, exempt from state minimum wage and federal labor protection laws.
In Connecticut, Uber drivers earn between 60 and 69 cents per mile and 20 cents per minute.
Harry Hartfield, a spokesperson for Uber, reiterated that the company does not currently function on a commission model. Rather, Uber pays its drivers a set rate based on time and distance, and does not correlate the price paid by the customer with the wages paid to the driver.
Furthermore, he said, Uber doesn’t just provide software. It also covers state insurance required specifically for drivers who ferry passengers for money.
“If this bill passed not only would drivers have to pay as much as $4,500 a year more in insurance costs out of their own pockets,” Hatfield wrote in a statement, “but it would also make it significantly harder for people o hail an Uber. There’s a reason no other city or state in the country has passed a bill like this.”
Cruising up I-91 in the comfort of his black Mercedes-Benz GLE 350, Edgar could think of one big reason Connecticut should pass S.B. 989: He and his fellow drivers do almost all of the work on any given ride share ride. Why shouldn’t Uber and Lyft share more of their profits with them?
As Luke Bryan’s “Most People Are Good” played softly on Country 92.5, Edgar recalled the recent ride he gave to the six college students heading from a concert at Toad’s to their campus in Fairfield.
The students loved the ride, he said, because of the time and money and care he invests in his vehicle and in the service he provides. He remembered giving the students complementary bottles of water and sticks of gum. He had recently taken his SUV to the car wash. He had even given his can of Coke to one of the passengers simply because he had asked.
When he dropped the happy customers off at their destination after the 30-minute ride, Edgar checked his phone and saw that he had earned $81.86 for the trip. He scrolled further down in the Uber app on his phone, and saw that the company had earned $48.70 in service and booking fees on the ride. The customers had paid over $130 in total, of which Uber took home 37 percent.
“I have all these things to do to impress my client,” Edgar said, “but then the client is not paying me enough for the service.” Instead, much of that money goes to Uber.
“They made $50,” he continued. “For what?”
Hartfield provided the Independent with three recent examples where Uber paid more to a driver than the customer paid for the Uber ride. Hartfield said that it is not an uncommon experience for drivers to be paid more than the total cost of a ride. Click here to download redacted copies of those receipts.
Edgar said that last year he earned around $5,000 driving part-time for Uber, but that he had to spend around $1,200 of those earnings on car purchase payments, insurance, gas, and cleaning bills. And that’s after significantly cutting down on his Uber driving between 2017 and 2018, he said, due to Uber decreases in driver pay. (Other full-time drivers who testified on Thursday said they earned between $30,000 and $40,000 a year, but had to spend over $10,000 each year on car expenses.)
“I love to drive,” he said. Uber and Lyft, a rival ride-share service he started driving for last month, give him a chance to be in his car, meet new people, and earn money on weeknights and weekends to support his wife and five children.
Several other local Uber and Lyft riders associated with the group Connecticut Drivers United testified Thursday.
Rosana Olan, a 36-year-old full-time Uber driver from West Haven, said that last week she earned an average of $7.50 per hour for during her 38 hours ferrying passengers for Uber. And that was before car expenses, like gas. After expenses, she earned an average of $1.71 per hour.
“It’s very unfair that a $100 billion company is getting rich through customers and us,” she said. “We provide the car. They don’t provide the car.”
When she started driving with Uber a year ago, Olan said, she comfortably earned $800 working 30 hours per week. But then Uber dropped its per-mile pay rate from 89 cents to 65 cents.
“I keep driving because I’ve been doing customer service for many years,” Olan wrote in testimony she submitted to the committee, “ever since I was younger and worked with my mom. I love driving, no mater what weather or condition. But I mostly wanted to drive because I thought I would make good money. This is not true anymore.”
Branford-based driver Guillermo Estrella brought his Uber driving summary from 2018 with him on Thursday.
He drove 42,925 miles and completed 4,579 trips. He earned just under $43,000 while Uber took home around $25,000 based on his work. After car expenses, Estrella’s net income was closer to $30,000 for the year.
“I only make $5,000 more than Uber,” Estrella said. “And I work the whole year round!”
New Haven Legal Assistance Association (NHLAA) Attorney James Bhandary-Alexander said that it’s a sad day when a company worth well over $100 billion like Uber threatens to pull insurance payments with the prospective passage of a bill that would provide a kind of minimum wage to drivers.
“Gaps in Connecticut and federal law leave transportation network company drivers without meaningful protections,” Bhandary-Alexander wrote in testimony he submitted to the committee. “There is simply no good reason that drivers should be forced to labor under exploitative working conditions.”
Edgar wasn’t able to stick around Hartford long enough to testify before the committee. He had to make it back to New Haven to drive a private client to an afternoon doctor’s appointment. He also had to get back to the Elm City for his full-time job as an on-call maintenance technician for a local property management company.
To allow local traffic authorities to establish lower speed limits on streets under their jurisdiction by holding a public hearing regarding such speed limits and providing notification of such speed limits to the Office of the State Traffic Administration.
To require a percentage of the cars, light duty trucks and buses purchased or leased by the state be zero-emission vehicles or zero-emission buses, establish a Connecticut Hydrogen and Electric Automobile Purchase Rebate Program and fund such program.
Whats weird is that even though UBER takes an usurious amount from drivers, its been bleeding red ink since the day it was founded….and somehow, venture capital still keeps piling in. I think they all think that driver-less cars will solve the money problem…for the owners that is. Say goodbye to the drivers because they’re going the way of the blacksmith.
posted by: Russia Exit Crimea on March 8, 2019 5:32pm
How sad that Uber can exploit the drivers. $ 2.50 booking fee? Did they ever think about the wear and tear on the Uber driver’s car. The roads in Ct. suck they are filled with potholes, they destroy cars. Whether it is a smashed muffler, rims or other parts.
posted by: CityYankee on March 8, 2019 7:41pm
But when Uber and it’s drivers undercut union cabbies and drove them out of business, everybody was soooooo happy about capitalism at work and the millennials were lovin’ the freedom. Why are they not happy anymore? Cuz you have no union to protect YOU Uber drivers now? Well, well…. Write again when the the AirBnB you stay in burns down or asphyxiates you….and they have no insurance or the place is not up to code. Be careful what you wish for, liberals and libertarians and conservatives…. because you might get it!!!
posted by: Samuel T. Ross-Lee on March 8, 2019 10:31pm
Russia Exit Crimea,
Of course they thought of wear and tear on the drivers’ cars. That is exactly why they don’t own, or have to maintain cars.
The Uber owners are getting over like fat rats, as we say. And the drivers are getting screwed, virtually all of whom I’ve met are very good at customer service and conversation.
It will be nice when a business like this works for the owners AND the workers, but our faith in runaway capitalism prevents that model most of the time.
posted by: thecove on March 8, 2019 11:41pm
In the beginning, being an Uber driver was profitable with the driver getting 80% of the fare and the company getting 20%. But Uber was seriously mismanaged and to this day, has been operating in a deficit. Normally I would say that the drivers knew what they were getting into when they signed on but some of those early drivers relied on Uber to make their living and saw their shares cut on a constant basis. I can say from my own experience that driving, for Uber at least, is definitely not worth it anymore.
posted by: LivingInNewHaven on March 8, 2019 11:54pm
If you don’t like the rules then don’t play the game. Why should UBER have to change? Nobody is forcing anyone to be an UBER Driver.
posted by: NHTeacherPE on March 9, 2019 8:11am
I understand that everyone wants more money but New Haven to Fairfield is about a half hour ride and around a gallon of gas. So with tip if the young students were cordial netted the Uber Driver around 90 dollars for the trip. This is 90 dollars for a half hour of work. Unfortunately if drivers were to net more money Uber will just up the fee to the consumer. Everyone loves the 15 dollars an hr minimum wage that is being presented. Let’s really look at this. If Lamont gets his wish CT workers will be faced with tolls, more taxes taken out of your paycheck based on you receiving a higher pay scale. The stores and companies will be forced to up the prices of their services and goods because they will have to up the minimum wage to the work force. The consumer will than have to eat the cost. Simple things like a 10 cent bag price at Stop and Shop will go right into the products that consumers purchase. Businesses only course of action will be to up the prices on everything and consumers willl continue to be status quo even though workers will be making more money. Be careful for what you wish for.
As robn pointed out, Uber is not a profitable company. It’s kept afloat with venture capital, and I assume investors anticipating not only driverless cars to get rid of labor costs, but traditional cab companies who can’t compete with their low fares to go out of business. Then when there’s no competition, Uber will jack their fares up and riders will be left no better off then before “ride sharing” was on the scene. This is why there were riots and strikes by cab drivers in Europe.
posted by: Samuel T. Ross-Lee on March 9, 2019 10:07am
Exactly, why should Uber change…its pay scale mid stream?
Their bait and switch tactics might make them good capitalist, but it doesn’t make them good people or good citizens.
IHow about we apply your calculations to every employer, including yours and see how well it works out for people who need jobs without relying on the goodwill of greedy and stingy politicians?
posted by: Russia Exit Crimea on March 9, 2019 3:06pm
Samuel T. Ross-Lee , You bring up some valid points. There are far too few Craig Jelineks or James Senegal.Ceo’s of Costco.
posted by: THREEFIFTHS on March 9, 2019 5:35pm
I heard this will becoming to New Haven.
Introducing JUMP Now you can find and rent an electric bike using your Uber app. Select Bike, and enjoy the ride.
Move through traffic faster, easily ride up hills, and reach your destination without breaking a sweat
JUMP bikes are pedal-assist electric bikes, so the harder you pedal the faster you’ll go. An integrated GPS and lock means that you can find a bike near you and go for a ride.
The easy way to help drivers is have the state form a Taxi & Limousine Commission like they have in New York.You can get a TLC license for your own vehicle.Then all of the money you make is yours.
Get a Vehicle License Interested in getting a TLC license for your vehicle? Read here to learn which license is best for you, then use the menu on the left to choose the license that you want to apply for.
If you are planning on driving the vehicle for hire, you will also need to apply for the appropriate TLC Driver’s License. Visit Get a Drivers License for more information.
Do I need to live in New York State to register my vehicle for a TLC Vehicle permit?
You may register a vehicle from New York, New Jersey, Connecticut and Pennsylvania. Out of state vehicles must already have taxi/livery plates and meet the insurance requirements set by NYC TLC. For additional information refer to the Vehicle Insurance Requirements (PDF).
posted by: concerned_neighbor on March 10, 2019 4:09pm
AMDC - SPOT ON!
Everyone loves the idea of innovation and tearing down a system that worked, mostly (taxis). Now that taxis are on the way out, you now want to bottom up change t he pay structure employed by Uber Et Al?
All I can say is all those Uber drivers were willing to be part of the extreme undercutting of the taxis system. Now, to be fair, Uber offered service in a way that Taxis had not offered for a long time. The taxi companies did not rally or counter Uber’s technolgocial revolution. They did not clean up their cars, improve their language skills or offer beverages.
That said, Uber needs to pay the piper and it will do so on the backs of the wage slaves, having shifted the bulk of the capital expenses to the drivers. Electrons are cheap and Uber, likely powered by Amazon Web Services in the background, only needs to provide the payment gateway, insurance, and dispatch.
This is a variation on the complaints about the bike share in New Haven. Everyone was bitching when they posted liquor and fast food ads. Well, no one realized that the bike share company is in business to earn money, not provide social services. It received like 95% or better of the ad revenue. Who pays the most? Liquor and Fast Food? Duh! And the bike share co took in $1m or so this year despite the fact that basically no one rides the bikes. And they are making so much money that they can afford to dump all these green bikes and change them to different bikes that don’t need an app to hire (like that is going to make a different) and add on electric scooters. It will be only a matter of time until some local (or coed) is flattened by a CT transit bus while riding a scooter.
And while I’m a fan and supporter of Unions, Uber has no tolerance of them and they will exit this market before any organization take places. More importantly, Unions are for employees, not independent contractors.
robn: Great link to Forbes. Explains why a $100 billion company is not getting rich through its customers and driver. I note that in NYC, Uber actually costs more than yellow cabs. The Economist described NYC taxi cab service as combining first world prices with third world service. The supply limits enforced by the Taxi and Limousine Commission give yellow cabbies little reason to give good service, or any service to large areas of the city. Here in CT, I have compared Uber prices with those of car services like Hy’s Limo of West Haven. The prices aren’t much different, so I go with an established company where I know what I am getting.
posted by: robn on March 11, 2019 4:31pm
My honest opinion is that in second or third tier cities that don’t have a good taxi service (like New Haven where it can take up to an hour or to to get a cab), a system like Uber seems to make a lot of sense. However Uber has two major problems. One is that demand pricing means usurious pricing at odd hours and in rural or disadvantaged areas. Another is that the numbers just don’t crunch and they probably never will (even driver-less, it costs a certain amount of money just to keep a car on the road.)
posted by: 1644 on March 11, 2019 5:56pm
robn: Demand pricing hardly strikes me as a problem. If I want a ride in a storm, or at rush hour, it only seems fair that I should pay more. I am sure what the present model is, but didn’t Uber used to allow drivers to bid for jobs, ebay style? Personally, a ride is worth more to me late at night or in bad weather, so it should be priced higher.
posted by: robn on March 12, 2019 8:37am
Policy makers have always treated transportation infrastructure the same way that they treat information infrastructure; with an inclination towards some equity for geographically disadvantaged (like spending a lot of money making rural roads and phone lines and guaranteeing mail delivery even though it would make more financial sense not to). Demand pricing sounds good on its face but often leads to price gouging.
posted by: westville man on March 12, 2019 11:27am
Weighing in late here but my family and I use Uber almost every week. Nearly all the drivers I’ve had are veteran Uber drivers who like their job. Most brag about the money they make. Some left the taxi grind to go with Uber and Lyft. Some do it full time (45-65k per year baseline) and some do it part-time as students, young mothers or retirees. My experiences have been great. I don’t miss the cabs at all and the pricing is about half. And no way Hy’s could compete price-wise.
posted by: 1644 on March 12, 2019 4:50pm
Westville man: Hy’s to JFK: $212 including tip. Uber Premium: $315 not including tip Uber in cramped banger: $132 plus tip. robn: I never understood what is wrong with charging a market price. Allowing prices to respond to demand, what you call “gouging”, signals the market to provide more supply. Taxis aren’t infrastructure, they are mobile services. They will respond to demand, sometimes instantaneously. Driving in a snowstorm may not be worth $20 to a driver, but $100-$200 will get more drivers out. So long as both parties know and agree on a price beforehand, I say let the parties decide what a service is worth to them.
posted by: westville man on March 12, 2019 6:28pm
1644. I’m talking about local trips, sounds like you mean longer ones.
posted by: Idrinkyourtears on March 13, 2019 1:46pm
I just can’t for the life of me understand people protesting, whining, complaining over a job you don’t need. You can work anywhere and not drive, wait tables, work in retail, labor, cleaning etc, there are many many jobs that require NO EDUCATION and NO SKILLS. Drivers literally sit down all day, press a pedal and think they deserve more money!?!? No one took cabs b/c they were gross and too expensive! People use Uber or lyft b/c its affordable! Its a side hustle, not a full time job! You shouldn’t at Mcdonald’s full time unless you got no skill or education - same goes for Uber or lyft drivers. If you actually have a skill and are educated, then you dont need Uber!! It’s b/c you have nothing to offer!! Get mad at yourself not uber or lyft