While Americans patronizing the country’s two largest unregulated cab companies may not have noticed much difference, the firms have dramatically shifted in three ways.
The first happened when, as per “Uber and Lyft Drivers in California Will Remain Independent” by Kate Conger in the November 4th New York Times, the state’s hotly contested “Proposition 22, a ballot measure that allows gig economy companies to continue treating drivers as independent contractors,” passed with 59% of voters agreeing, despite solid conceptual reasons why workers called by apps were true employees. While only in one state, the result has taken the wind out of the sails of status-conferring efforts elsewhere, has damaged true taxicab providers, and was described by Conger as “a bitter loss for state and local officials who have long seen the ride-hailing companies as obstinate upstarts that shrugged off any effort to make them follow the rules.” Following reactions were well summarized in the titles of two other articles, “Fight Over Gig Workers Persists Despite Win for Uber and Lyft” (Noam Scheiber and Kate Conger, The New York Times, November 11th) and “New U.S. rule could boost ‘gig economy’ companies while costing American workers billions” (Levi Sumagaysay, MarketWatch, January 6th). Since then, though, we learned from Henry Grabar in the April 30th Slate “What Uber and DoorDash’s Investors Are Suddenly Afraid Of,” that being a comment by Secretary of Labor Marty Walsh that “in a lot of cases gig workers should be classified as employees.” Perhaps such a pronouncement, here applied to a local delivery service as well, will direct legal changes, but for now California’s decision is fully in effect.
The second change was in what Uber and Lyft are planning. That was shown by three divestments of what these companies were developing to rescue them from indefinite money losses, as “Uber, After Years of Trying, Is Handing Off Its Self-Driving Car Project” by Cade Metz and Kate Conger in the December 7th New York Times, “Uber Jettisons Flying Car Project” also by Metz in the December 8th Times, and “Lyft sells self-driving unit to Toyota’s Woven Planet for $550M” by Kirsten Korosec on April 25th in TechCrunch. While it’s no surprise that after the past two years driverless vehicles have lost their immediate promise, it is noteworthy that Uber and Lyft, neither of which have ever been profitable as public companies despite billions in annual revenue, are seemingly staying the same.
The final large ridesharing swerve, actually a winding road, was delivered by the coronavirus, as “COVID didn’t kill gig economy, the pandemic accelerated it” (Brian Straight, FreightWaves, February 5th). The previous calendar year was a good one for such positions, with a daVinci Payments survey showing that total payments for gigs were one-third more, or $1.6 trillion-plus, than in 2019. However, USA Today reported on May 24th that “Permanent jobs rise as employers sweeten pay, benefits for gig workers amid labor shortages” (by Paul Davidson). That will last only as long as high numbers of candidates stay off the job, though, which will most likely end within a few months. That will leave Uber and Lyft once again in doubtful territory. As I said years ago and which still holds now, you can ride them to your heart’s content, but find better companies in which to invest.