Uber and Lyft drivers are expressing concerns for making less money and local governments are considering changing the driver's minimum wage, but the companies are warning that it could end up costing riders more, while giving drivers less.
In Minnesota Governor Tim Walz vetoed a bill in May that would have set a minimum wage for rideshare drivers, saying it was not the right bill. Rideshare services threatened to pull its services from greater Minnesota and surge prices in the Twin Cities. Now one of those Twin Cities, Minneapolis, is looking into minimum wage as a way to help workers who say they are seeing a drastic cut in wages.
Mauricio R. Castaneda emigrated from El Salvador to Minnesota over 20 years ago.
"I have three kids. I have a wife. Rent is expensive. With $100, we can buy nothing," Castaneda said.
He’s been driving Lyft for five years and Uber for nine. He says companies are charging riders more and lowering the amount drivers can make per trip, so he’s making less money now than he did just a few years ago.
"Now, I have to work like 18 hours every day, to make $250, sometimes not even 200," Castaneda said. "Insurance is not cheap; maintenance is not cheap, and we have to do everything."
Despite struggling to pay his bills, Castaneda says he decided not to work at night.
"It’s dangerous with the carjackings," Castaneda said. "You have to watch everywhere because you don’t know when anyone is going to attack you."
The Minnesota Uber and Lyft Driver’s Association says they want three things; better pay, safety issues addressed and protection against deactivation. Eid Ali is the president of the association. He says many drivers are immigrants who are new to this country and have education and language barriers that prevent them from seeking alternative work.
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"Hopefully, the living standard of those drivers who have been struggling to make ends meet will improve," Ali said about the potential for drivers to get a minimum wage. Under the ordinance, drivers would get at least $1.40 per mile and $0.51 per minute, or $5, whichever is greater.
Fox spoke with Sergio Avedian, an Uber driver in Los Angeles and senior contributor for the media site, "The Rideshare Guy." Avedian says he was making $1.40 a mile and $0.35 cents a minute in 2015. By October 2022, he was making $0.60 cents a mile and $0.21 cents a minute. He says the story is similar when he drives with Lyft too.
Uber did not immediately respond to a request about the Minneapolis city council proposal but has previously said a Minnesota minimum wage would increase the cost of rides by at least 50% and lead to at least 30% fewer tips. The company offered to pay $1.17 per mile and 34 cents per minute, but the legislature rejected the offer. Lyft said the Minneapolis plan could double rider fares, leading to fewer rides, and a potential drop in drivers’ pay.
Associate Professor of Management, Peter Norlander, Ph. D. researches employment relations and gig workers.
Uber and Lyft have been very active politically at the local level," Norlander said.
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New York City and states Washington and California have all passed laws that would give drivers a minimum wage. Uber, Door Dash and Grubhub sued New York City over their law and California’s Prop 22 is headed to the state’s supreme court.
"The lack of transparency that Uber and Lyft have about wages is basically one of the reasons why it's really frustrating for a lot of drivers who work for them. Workers at the end of the day don't know how much money they're going to earn," Norlander said.
Norlander says the future looks very unsettled. "Workers and employers are both looking for greater shares of the pie, and they are going to look to their allies in government," he said.
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Avedian says California’s Prop. 22 isn’t working and if it’s overturned by the state’s supreme court, he hopes the state will adopt a similar policy to Washington’s. A policy he considers the "playbook."
Colorado and Massachusetts state legislators have expressed interest in setting a minimum wage for Uber and Lyft drivers too.
