Worker co-ops try to compete with Uber and Lyft

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Over the years, Uber and other rideshare companies have promised drivers an entrepreneurial spirit. Drivers who wanted to set their own schedule signed up in droves, pushing the odd-job economy into a multi-billion dollar industry.

However, some drivers did not get the control and independence they expected. They struggled with car maintenance, mortgages and insurance costs, and wondered if Uber and Lyft were paying fair wages. Legislative efforts to provide them with employment benefits were thwarted.

Disgruntled drivers and worker supporters are now forming worker-owned cooperatives to regain some of the money and power in the odd-job economy.

The Driver Cooperative, which opened in New York this week, is the latest attempt. Founded by a former Uber employee, labor organizer and black car driver, the group will begin assigning ownership to drivers in early May and launch a ridesharing service through the app on Sunday. is.

The cooperative has so far recruited around 2,500 drivers and will charge passengers lower fares for less than Uber and Lyft. It is an ambitious plan to challenge the cycling giant and faces the same obstacles that tend to block other start-ups in the sector. Creation of a company like Uber.

Nonetheless, the drivers who took part in the effort said that even small co-ops could make a big difference in their work, earn more money and give them a say in how the business works. The cooperative said it plans to pay an additional 10% of the minimum wage set by the city’s taxi and limousine committee and return the profits to the driver in the form of dividends.

In normal times, higher wages can attract drivers to co-ops. But these are not normal times. Many drivers are reluctant to hit the road again due to a pandemic, creating a national shortage.

In this month’s earnings report, Uber said it had 3.5 million active drivers and courier companies in the first three months of the year, down 22% from the previous year. The company responded by aggressively increasing its spending on bonuses and incentives and labeling its efforts as “stimulus”. Uber said in March that drivers in New York City earned an average of $ 37.44 an hour.

But if the supply of drivers recovers, Uber’s wages are expected to drop. The founder of the driver’s cooperative said that when group members were paid a salary for regular ride-sharing services, they struggled to meet their costs. A spokesperson for Uber commented on the cooperative. Rejected.

“We are constantly working to improve the driver experience on the platform and share the goal of enabling drivers to work efficiently and independently,” said Julie Wood, spokesperson for Lyft. Make.

Due to the economic stress caused by the pandemic, workers want to use co-ops as a means to counter existing businesses and raise wages, said Ariana R. of the University of Louisville Brandy Law of Law.・ Professor Levinson said. ..

It’s hard to organize workers together, but Levinson said he’s formed a small food delivery and vehicle shipping cooperative. “Independent entrepreneurs take advantage of the cooperative model to organize themselves and compete for a living wage,” she said.

“I’ve never seen a driver’s thirst for this change. Each agreement reveals an exploitation, ”said Eric Four, union organizer and founder of the driver’s cooperative. Mann said. “They believe the way to regain control is to have control and ownership of the platform.”

Forman has started a partnership with Alissa Orlando, former Uber business manager in East Africa, and Ken Lewis, a black car driver in New York City. Orlando said he quit Uber after seeing drivers demonstrate against pay cuts.

During the pandemic, she began investigating the co-op as Uber and Lyft drivers struggled to secure unemployment insurance and appropriate protective gear. Lewis and his brother worked in the taxi and black car industry, but dreamed of running their own business.

The drivers’ cooperative receives technical and business support from volunteers in the tech industry, Orlando said.

The cooperative aims to raise wages for drivers and address other common concerns such as predatory lending rates and restrictions on the use of apps that connect with passengers. Is also covered. The group is hoping to partner with the Lower East Side People’s Federal Credit Union to help drivers refinance their mortgages, further lowering costs.

In 2017, Uber agreed with the Federal Trade Commission to a $ 20 million fine to resolve allegations of tampering with driver income and loan terms. The company no longer offers mortgages.

Drivers say they’re more likely to continue driving for black car gig businesses and services, in addition to driver co-ops, adding to the range of shipping and delivery mobile apps.

“Working with Uber is because you have no other choice,” said Michael Ugwu, who has been driving at Uber for six years. Ugwu said he will continue to drive at Uber, but will prioritize customers who request a ride through the co-op app.

“Having your own business is both a step forward and a path,” Ugwu said. “Even if you have a small income, focus on co-ops to be successful.”

Other groups of workers are also looking to cooperatives for greater influence in the odd-job economy. Founded in 2019 and operating primarily in Denver, Portland and Los Angeles, Driver’s Seat Cooperative helps drivers collect industry data on the most profitable transportation and delivery applications. We maintain an independent income register.

“The starting point was to hear the driver’s frustration and his feeling of being manipulated by the algorithm,” said Hayes Whit, CEO of Driver’s Seat. The platform reports to drivers in different ways. Drivers find it difficult to judge what is best for them. “

According to Witt, the driver’s seats aim to market traffic data and traffic to the city, but the city has little transparency from companies in concert on its environmental impact. The cooperative will also begin membership with drivers later this year.

“People are trying to figure out, ‘How do we maintain the value that we’re creating and get away from this super-mining model? Said Witt. “This is happening because the real problem is happening and co-ops are providing the real solution.”

Drivers Cooperative founder Lewis said drivers like him wanted to build apps like Uber since Uber was introduced, but didn’t know where to start. Some efforts started nationwide, like delivery partner LoCo, but New York City didn’t have a place to go.

“The pilots will say, ‘Why can’t we do this alone? Lewis says. When the opportunity to join a cooperative presented itself, he said to himself: Let me make the last effort. “

Worker co-ops try to compete with Uber and Lyft

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