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April Shabazz began driving for Uber full time this summer. The job wasn’t new for her. Rideshare driving had been her side gig for three years, along with work as a tax preparer.
Shabazz, a member of Stand Up KC and the Missouri Workers Center, likes Uber’s flexible schedule. It enables her to work around some health issues and frequent medical visits. She still has grievances with the company, however.
“Honestly, I’m not gonna say that I really feel valued as a driver,” she said.
Shabazz is not alone in that sentiment. Coming out of the disruptions caused by the pandemic, and following a summer of heightened gas prices, many rideshare drivers say they do not feel valued by their companies. They say large commission cuts, few resources and a lack of corporate transparency make their jobs harder, especially in a place like Kansas City, where competition for customers can be cutthroat.
While rideshare companies such as Uber and Lyft do not share localized data on their numbers of drivers, The RideShare Guy (RSG), a blog about the rideshare gig economy, estimates that approximately 1.5 million drivers represent Uber and Lyft in the United States.
Overall, 16% of Americans have earned money at one time or another via an online gig platform, according to the Pew Research Center. Fifty-eight percent of gig employees rely on their gig jobs to meet basic needs.
RSG estimates that about 1% of the working adult population of the U.S. is involved in some sort of gig job, according to Sergio Avedian, senior contributor at the blog.
While Uber alone has added 640,000 drivers to its Uber and Uber Eats platforms since January 2021, it has not been able to retain most of its drivers and has to continually replenish its driver base. About half of Uber’s drivers quit after just one year, according to the RideShare Guy platform.
“Unfortunately, from the first day, Uber and Lyft had this attitude of churn and burn,” Avedian said. “We don’t care if we lose a million drivers this year, because there’s another million waiting to join the platforms.”
Drivers make less while the apps charge more
Uber claims that it charges its drivers a 25% fee on all fares. But after accounting for other additional fees deducted from the fare, such as booking, safe ride and marketplace fees, the percentage taken from drivers is much higher.
“Since 2019, the fares that Uber and Lyft are charging passengers have gone up anywhere between 60 and 70 percent throughout the country, depending on the city,” said Avedian.
“They are charging a lot more and they are paying a lot less.”
The company no longer produces a receipt showing the breakdown of what the trip cost, what fees are deducted and what the driver will receive. Instead it shows an aggregate total of trips and driver earnings over a given period. The amount that Uber has taken off the individual fare is not available, although the company has said it is working on a plan that would give drivers more information up front.
“Less transparency is definitely happening,” Avedian said.
Drivers are also not compensated for gas, and while the price of gas has fallen from its summer peak, the higher cost of living post-pandemic continues makes it difficult for drivers to break even with these fees.
Erica Downey, who lives in Wyandotte County, drives for the food delivery platform DoorDash, which does break down fees for drivers but does not compensate them for fuel costs except through the use of a DasherDirect debit card. Drivers for the app receive a base pay depending on the distance, estimated time of delivery and other factors. The minimum payment is $2.
“That’s not even the price of one whole gallon of gas,” Downey said. Over the summer, she experienced days where the amount she made from driving was the same amount she had to spend on gas.
“It doesn’t seem like it’s a fair wage,” she said. “It’s not just the gas prices here. It’s the way that DoorDash pays you as well.”
Downey started declining orders under $5, which has decreased her acceptance rate, resulting in her receiving fewer orders as she is now one of the last drivers to be notified of nearby orders.
Shabazz, who does not have her own car, rents an Uber vehicle through Hertz in order to drive. She has to pay $560 up front before she can even begin taking passengers.
“So essentially with that and a full tank of gas I’m in the hole when I first get started until I’m able to make up to that amount to cover what I’ve already spent to rent the vehicle,” she said.
To ensure she makes the most money she can, Shabazz drives solely at night. As Kansas City is a large, car-dependent city, the market can be competitive during the day.
“At this rate, with me already giving up $560 and then trying to make that back and then I’m trying to pay bills at my house, even if I wanted to get a vehicle, I can’t come up with the money for a down payment for my own vehicle,” she said.
Shabazz believes drivers should be compensated more. She is not the only one.
“I talk to hundreds of hundreds of drivers a week and that’s the number one complaint,” said Avedian. “I do all the work and Uber takes 60% just because they put the passenger and me together.”
Gig drivers want more protections
Shabazz, who is often in and out of the doctor’s office for health issues, does not have health insurance.
“If you’re sick and you have to go to the emergency room, that’s your bill, you need to figure out how you’re going to pay it. If you have a doctor’s appointment, that’s your bill, you need to figure out how you’re going to pay it,” she said.
“I think if they offered some type of benefits, that would be so helpful.”
Gig drivers are considered independent contractors as opposed to employees, meaning they aren’t entitled to benefits and have to cover their own work-related expenses, such as car washes and repairs.
Among U.S. adults, 57% believe that drivers for rideshare apps should have more legal protections from being mistreated by these companies, according to Pew’s 2021 survey.
Also based on the survey, 35% of U.S. adults view rideshare drivers as employees instead of independent contractors. Democrats are more likely than Republicans to describe rideshare drivers as employees.
In 2020, the New York Supreme Court ruled that New York Uber drivers are in fact employees instead of contractors, entitling them to unemployment benefits and a guaranteed minimum wage. California passed a 2019 law making it harder for companies like Uber and Lyft to classify drivers as independent contractors rather than employees.
Throughout the rest of the country, however, drivers are subject to the terms and conditions Uber sets for its contractors.
Avedian, with the RideShare Guy blog, scoffed at that logic.
“We don’t know what we’re gonna get paid and we don’t know what the job is, but we have to come pick you up anyway,” he said.
“And then you call me an independent contractor. Really? I don’t think so,” he added. “Now if you’re telling me what the job is beforehand so I can make a profitable decision for myself, then I’m an independent contractor.”
In response to driver concerns and pushback from the Federal Trade Commision, Uber plans to introduce upfront fares, which will allow drivers to see the price and distance of a ride on the screen for a few seconds before accepting or declining. The breakdown of the ride total, however, will still not be available to drivers. In the cities where upfront fares have already been released, drivers still see lower earnings.
For now, Shabazz plans to continue driving Uber as it works best with her schedule.
“I’m not gonna say I’m necessarily satisfied with what I have going on right now,” she said. “But again I have to outweigh everything because I can’t do too many jobs.”
Corrected: October 6, 2022 at 3:30 PM CDT
A former version of this story incorrectly described the reimbursement policy for gasoline costs available for DoorDash drivers. No reimbursement is available except through the use of a DasherDirect debit card.