Lyft Drivers Protest Falling Wages as Execs Drum Up Investor Money for $25 Billion IPO

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Photo: Patrick Howell O’Neill

Inside the luxury Omni Hotel in downtown San Francisco on Monday morning, Lyft executives and investors wheeled and dealed about the company’s upcoming IPO as the firm’s valuation hit a whopping an estimated $25 billion and climbing.


Outside the Lyft investor meeting, 75 drivers and labor organizers protested falling wages, a lack of pricing transparency, as well as calling for a driver minimum wage.

“The number one reason we’re here is to get a fair wage,” Lyft driver Rebecca Stack-Martinez told Gizmodo. “Since the inception of these rideshare apps, they’ve done nothing but cut drivers wages. It seems to happen two to three times a year. And it’s not only falling wages, it’s the way we get paid for particular rides and that they change the way they structure things like surge pricing.”

Various demonstrations took place around California. In San Francisco, Los Angeles, and San Diego, several hundred rideshare workers and a patchwork of coalitions for Uber and Lyft drivers joined in a planned 25-hour strike that began at midnight on Monday. These actions follow months of reports of falling driver wages at the two companies expected to go public at multi-billion dollar valuations in 2019.

Uber’s estimated $120 billion valuation will likely dwarf Lyft’s. According to a recent study, however, half of American Uber drivers make less than $10 per hour after expenses.

Uber drivers are protesting a recently enacted 25 percent reduction on per-mile earnings. Lyft drivers say they’ve seen similar cuts as well as unilateral changes to how surge pricing payouts work, a combination that makes it increasingly difficult to live where they work. Much of the time, drivers move back and forth between the two apps.

“They change the way they handle surge pricing,” Stack-Martinez said about her experience with Lyft. “We used to get paid on the multiplier that riders see, now they changed it to a flat dollar amount so a 200 percent multiplier is a flat $2.00. They cut the bonuses drivers receive for number of rides. The cost of living isn’t going down, it’s going up. We live in the most expensive city in the United States and they’ve done nothing but cut our rates. It’s become harder and harder to maintain a profit.”


The San Francisco drivers, organizing with Gig Workers Rising, are also pushing for a minimum wage equal to New York City’s recently adopted $26.51 per hour gross pay floor, which is estimated to amount to $17.22 per hour after expenses.

Lyft and Uber drivers are categorized as independent contractors and not employees. Both companies insist that the vast majority of drivers are part-timers.


“Lyft also has a strong track record of helping drivers increase their earnings, and has led the industry in initiatives like in-app tipping, same-day payments, access to affordable rental vehicles, and more,” Lyft spokesperson Chelsea Harrison told Gizmodo.

Omar Alkhameri, a driver for six years, said many drivers felt stuck in the job due to monthly car payments. Alkhameri, a leader in the Yemeni immigrant community, said refugees from Yemen arriving in the U.S. found driving for Lyft or Uber was one of the only jobs they could get to survive and support their families and they initially felt boxed in. Now, he says, they’re finding its difficult for them to leave.


“We don’t care whether Lyft goes public, the main concern is about how much we drivers make,” said driver Mostafa Maklad. “To drive 80 hours a week, how many hours can you sleep everyday? Their model is that it’s a flexible job, but the fact is that we can’t work whenever we want. We work sometimes 12-16 hours a day, seven days a week—that needs to be changed.”

Drivers have been attempting to directly engage with Lyft for over a year. In October, drivers delivered petitions to both Uber and Lyft asking for meetings with executives to discuss company policies like driver deactivation. A driver was tackled outside Uber headquarters trying to deliver the message, while Lyft received the petition and then held a meeting with drivers. Both sides described the meeting positively but no substantial changes seem to have occurred as a result.


Lyft had previously scheduled a second meeting with drivers and organizers for today, but the company promptly canceled the meeting when the protest against falling wages was announced.

“We want to show up to show this company is greedy,” said Omar Alkhameri. “They build the company on our jobs. We do everything for this company and they call us partners but we are not. We use our cars, we pay insurance, we do maintenance, the company is growing because of us and we get no benefits.”


Despite no shortage of worker grievances and energy, organizing gig workers is uniquely challenging. There is no central workplace either in the form of an office or online. Gig companies typically don’t connect their gig workers in the way they connect their technical and business operations, a symptom of the two-tier system emblematic of the gig economy. In one company, an engineer and a driver have completely different day-to-day experiences—as well as salaries that may as well exist in alternate universes.

Lyft lost $911 million last year, an even bigger reported loss than its $688 million loss in 2017. Union pension fund advisor CtW argued last week that the only way for Lyft to achieve profitability will be to reduce driver pay. That strategy, CtW warned, was pioneered by Uber.


“Over the past three years, Lyft has mimicked Uber’s pay compression strategy, and IPO investors face the risk that the far smaller company will not be capable of sustaining low pay any longer than the market leader could,” Richard Clayton, research director at CtW, wrote.



What we’ve learned after 20 years of the Web:

Silicon Valley is 90 percent hype and 10 percent technology.

The more money your company loses, apparently the more valuable you are.

The gig economy depends upon your frontline contract employees being excited and/or dumb enough to work hard for very little money.