I dont see how Lyft gets off calling this fraudulent. Seems to me it's the system working as intended, and as it should.<p>Drivers dont want to drive for under a certain value, so they simply inform the app who adjusts the value to fulfill demand. Seems like its what you want to happen.
This seems like it could also torpedo their Contractor vs. Employee argument.<p>Contractors get to set rates, employees don't. So you can't say they're contractors AND accuse them of committing fraud when they try to set their own rates.<p>Now if only someone would develop an app that does this for entire cities. The app could be their version of a union.
News flash: if you go out of your way to classify your entire workforce as contractors, you don't get to decide when they work or not. It turns out this has consequences on both sides.<p>If Lyft wants to decide when their drivers are working, there's a process for this:<p>1) Hire employees<p>2) Give them a schedule<p>3) Pay them hourly plus mileage
This is really curious, in that it appears to be a normal strike for higher wages, except it's being coordinated on an hourly basis for just a few minutes until the company agrees to pay more!<p>Contractors can decide when and how they want to work, and therefore determine the price at which to sell their labor at, so to me it seems they are simply exercising their rights here. Like others have mentioned, if most drivers don't choose to participate, then this "scheme" wouldn't function.
Few things interesting here -<p>One is that the workers are getting paid more per the algorithm that these companies designed to charge customers - that is, they are getting the company to facilitate higher payments but the company itself isn't being charged more! So in that case, the drivers are simply arguing that uber/lyft are artificially undervaluing their time because clearly these passengers are willing to pay 15% more to them to get home...<p>--<p>It is telling to me how often Lyft/Uber/et all emphasize that their philosophy is that these gig economy jobs are just something you do a tiny bit extra to get some extra cash in your pocket. That is they are designed to be a small supplement to the job that provides you with most of your income, so hey, we don't really have to worry about working conditions, etc.<p>But I'm not sure I believe their stats. Over the past few years it is nearly 100% of the drivers I get that are doing it full-time, and many/most of the "teacher moonlighting for extra vacation money" type drivers have given way to lots of former actual taxi drivers who quit their taxi company and now work both uber/lyft.
"On average, Lyft drivers earn over $20 per hour."<p>I wonder if this figure takes into account all the waiting time, or just driving time on the app. If it is the latter, then that's a pretty scummy thing to say, considering that most drivers spend less than a third of the time actually driving people to their destination, putting the actual number closer to 7.00 an hour.
When low paid workers coordinate their efforts to increase their pay it's called an "artificial price surge" and allegations of fraud are thrown around.<p>When highly paid executives, investors, and board members coordinate their efforts to increase their pay what does the media call it?
As much as I would be displeased if my fare were manipulated, I can only blame Uber and Lyft for this. They created an incentive for drivers to act as a unit, and groups of drivers are figuring it out. Really makes you long for the transparent, posted pricing of municipal taxis
I can think of a ton of technical ways Uber and Lyft can combat this. And they probably will. And they'll be short term happy and long term foolish. Because they're treating the symptoms, not the cause.
I'm not a lawyer, nor do I agree with what I'm about to say, but the drivers need to be careful, because they might run afoul of collusion.<p>Since they are all independent contractors, they are "rivals" in the same industry, so with all of them cooperating to increase fares for their benefit (and based on my understanding of the law), they are technically colluding.
I have no issue with them not being available and having rates go up. that is what they system should do. I know uber/lyft drivers that turn off the app after drops off in areas they like being so that they don't get prompted to take a nearby fare.<p>I do find it annoying that these drivers are upset at the fees. Look, before then all you could do is work for a taxi service and they make uber and lyft look like saints for the most part. you are free to work for whomever you want and you got into the deal knowing what it was.
“Over 75% drive less than 10 hours a week to supplement existing jobs. On average, Lyft drivers earn over $20 per hour.”<p>These statistics could be very misleading. For example let’s say one driver works 4 hours, another 6 hours, another 10 hours with all three making making $25/hr and the final one works 80 hours making $10/hour. In this scenario 75% of drivers are driving 10 or less hours a week and the mean driver hourly rate is over $20. However 80% of the hours driven are by one driver making $10/hour. This one driver is clearly the workhorse of the ride-sharing company making the bulk of the profit.
Oh man these guys think this is fraudulent? They should come to China. When rebates were all the rage, where the ride hailing companies would pay drivers subsidies, they developed software that could fake the GPS address on the phone and pick up fake rides without actually driving and get massive rebates
I don't like the word "manipulating". It is like a trade union negotiating better terms. If they do it voluntarily without intimidating the drivers then I don't see any problem. They should not feel guilty.<p>Also, in a Lyft's statement:<p>> Over 75% drive less than 10 hours a week to supplement existing jobs.<p>I wonder, are those 75% working part-time or full-time? It must be tiring driving 2 more hours after 9-hour working day.
I’ve always been fascinated by the way Uber has implemented their market dynamics using surge pricing. Uber isn’t a market for rides in the way that, say, a stock exchange is a market for stocks. There aren’t drivers setting their asking price and riders making bids, nor is there an order book where matches are made at a clearing price, and understandably so - I can’t imagine how to build a comprehensible UX around a “true” bid-ask marketplace.<p>Instead, Uber presumably has historic estimates of the supply and demand curves at different locations, different times of the week, different passenger / rider populations (business travelers or tourists?) and then uses the measured “true” supply and demand to find a clearing price, and therefore decide whether or not a market is going to surge.<p>The UX of surge is important too - the raison d’être of surge pricing is to bring more drivers to an undersupplied market. That means that when you detect a supply or demand shock that would lead to surge pricing, you want to increase the surge as quickly as possible to send out the “we need more drivers” signal, because there’s a latency in getting more supply (drivers have to relocate). Conversely, Uber doesn’t want to drop the surge price too quickly - they want downward movement to be sticky - because you don’t want to tell drivers “there’s more money to be made over here” just to renege on that promise before the supply can even get there.<p>So if surge is sticky on the way down, these drivers may have found a way to exploit the pricing algorithm - simulate a price shock then reap the rewards. If surge were not sticky on the way down, this strategy might be much less effective - a few drivers would get better fares, but the market would return to equilibrium faster.<p>None of this is to say that you can’t have cartel behavior in a “bid-ask”-style market too, but I suspect this is a “hack” of Uber’s pricing UX as much as anything else.
This seems like a logical outcome considering the company and contractors have an increasingly disconnected and at times adversarial relationship.<p>The entire gig economy is based on shifting risk onto the contractor (demand changes, benefits, protections regarding injury / illness)... and to some extent onto the consumer too.
Both companies claim that drivers are independent contractors who can drive when and where they want, so how can they say that these drivers are in violation of anything?
Uber/Lyft probably knew this was going on already, but since it increases revenue, probably was looking the other way. It’s going to be hard to ignore this now that it’s getting media attention.
The only economic model that make Uber and Lyft make sense is if drivers are willing to take low pay (considering all their other costs). If they make more money than cab drivers, the whole model falls apart, because then cabs will be cheaper and the service won't be competitive. (Granted, the lack of having to pay for medallions saves them a bunch of money)<p>I think the only long-term business plan that makes sense for them is black cars, or people who don't want the hassle of Taxis.
I've definitely experienced this at DCA, and it's worth nothing as well that it sometimes take <i>hours</i> to get out of the airport due to the insane traffic jams right around the terminals and in the parking garages. DCA has gone from my favorite airport to literally my least favorite over the last year or so. I've been using Dulles instead even though it's way less convenient.
> They can’t afford to pickup people at Reagan for $4 in rush hour traffic.<p>Are they really getting paid $4 to give someone a ride? That seems so low that drivers would be incentivized to find another job.
I don't quite understand this:<p>"The lot fills with 120 to 150 drivers sometimes for hours, waiting for the busy evening rush. "<p>Are they saying drivers site and wait for hours to do this?
Experienced this at LAX - another driver called my driver, commenting "It's at 3.5!!" - well played, I don't fault them for this at all.
<a href="https://callaride.com" rel="nofollow">https://callaride.com</a> is launching next month (local to the Tampa Bay, FL area only for now), and one of their key differentiators is giving drivers the ability to set their rate. There will be minimums and maximums in-place, but they will have more control than with Uber or Lyft.<p>Note: I am a third-party PM working with the web and mobile application teams.
I think many people are missing some facts from the article. They aren’t so much going on “strike” as they are just turning off their apps on masse 5 minutes before plane lands to trigger surge pricing, and then turning back on to catch the passengers at surge pricing. Obviously customers are still choosing to accept such fares, but may not know that the real price (if they wait a bit) would be much lower.
They can just counteract this by refusing to turn on surge pricing if they detect a large number of drivers disappearing if they predict that they'll come back shortly. Should be easy to predict that pattern and counteract it, unless the drivers are willing to skip work for an extended period of time.
I’ve heard about this tactic from people working at Uber years ago. I think they’re aware that it happens. The way it was described to me is the Ubers are in a line at the airport and each car signs off except the very first. That way rides keep coming and the first person in line gets surge pricing
Don't Uber and Lyft lose on every ride? I wonder if the increased fair caused by this cooperation makes the average ride profitable. Perhaps the price of a ride is more elastic than Uber and Lyft think? Especially at airports.
This is hilarious. Props to the drivers. Capitalism at it's finest: assumption of information imbalance.<p>If uber and lyft do nothing, this behavior will autocorrect itself: expect a few drivers to rebel/revolt after the news of the behavior spreads. Keeping the secret will get harder and harder.
I've seen something like this predictably happen with Grab in my office area in Singapore. At 5 you suddenly can't get cabs. You can at 4:55.
All this discussion about employee/contractor situation or possible collusion won't matter after Uber/Lyft close this loophole and this can be done easily. It makes no sense that the drivers would allow the reporter to publicize this trick.
Seems to me that if they're contractors they should have the ability to set their own rates. What's unfortunate is that they have to trick the app.
I wonder if this is legal?<p>With the drivers classified as independent contractors rather than employees would cooperation between drivers to manipulate prices run afoul of antitrust law?
I personally believe that driver's compensation is a valid discussion, but defrauding the system is not the way to do it. Uber/Lyft should just carefully identify and ban the cheaters and the lesson should spread as efficiently as the planning to cheat.