Uber and Lyft drivers in Seattle are taking home a smaller share of each ride than they were three years ago, even as the highly valued companies they drive for go public, a new analysis of pay data released by a drivers organization shows.
Across about 560 Uber and Lyft trips in Seattle, the company kept a median of 31 percent of the fare a rider paid, up from 20 percent around 2013, according to the analysis. The report was compiled by the App-Based Drivers Association, a local group of drivers affiliated with Teamsters Local 117, the union that advocated in recent years for allowing ride-hailing drivers to unionize.
The companies disputed the findings, which are based on a limited sample size of self-selected drivers and rides.
Uber and Lyft have rocketed to prominence across the globe in the last decade, raising concerns about poaching rides from public transit and a business model that uses drivers who are categorized as independent contractors without the protections of traditional employees.
Together, drivers for the two companies provided about 91,000 rides per day in the Seattle area, according to ridership reports filed with the city last year.
In several other U.S. cities, drivers plan to strike Wednesday over pay and working conditions. Seattle drivers will hold a “speak out” event to share their experiences and concerns.
The analysis comes about a month after Lyft went public and before Thursday’s planned Uber initial public offering, where it could be valued at up to $91 billion. The drivers association analysis, as well as the companies’ own filings with the Securities and Exchange Commission (SEC), “shows that the IPO payday for executives is being sold to investors on a promise of decreasing pay for workers,” the report said.
The companies counter that drivers are making sufficient pay and benefiting from the flexibility of working through an app.
“Drivers are at the heart of our service ─ we can’t succeed without them ─ and thousands of people come into work at Uber every day focused on how to make their experience better, on and off the road,” an Uber spokesman said in a statement.
Lyft spokeswoman Chelsea Harrison said driver earnings in Seattle have increased 14% over the last two years, and the average Lyft driver in Seattle earns more than $20 an hour. “We’re constantly working to improve how we can best serve our driver community,” Harrison said.
The argument that Uber and Lyft are keeping a higher portion of each ride is reflected in the companies’ own documents, though the companies’ numbers are more favorable to drivers than those compiled by the drivers group.
Uber wrote in a filing with the SEC that its take rate was 22% in 2018, up from 21% in 2017 and 16% in 2016. The 2018 rate ranged from 12% to 25% by region, the company wrote.
Lyft’s rate increased from about 17 percent in 2016 to about 29 percent at the end of 2018, but includes the company’s rentable bikes and scooters, according to its SEC filing.
In the “risk factors” section of its filing, Uber identifies lower driver pay as a possible liability.
“While we aim to provide an earnings opportunity comparable to that available in retail, wholesale, or restaurant services or other similar work, we continue to experience dissatisfaction with our platform from a significant number of Drivers,” the filing reads. “In particular, as we aim to reduce Driver incentives to improve our financial performance, we expect Driver dissatisfaction will generally increase.”
Such filings are “an opportunity to look at what do the companies really believe because they have to truthfully share their risks and assessments with potential shareholders,” said Joshua Welter, an organizer with Teamsters Local 117. “They are telling their shareholders they intend to take more, intend to pay drivers less and expect drivers to be increasingly upset by that trend.”
An Uber spokesman pointed to another line in the company’s filing: “Our platform powers opportunity for drivers, fueling the future of independent work by providing drivers with a reliable and flexible way to earn money.”
The study looked at 564 standard Uber and Lyft trips completed by dozens of Seattle drivers between July and October 2018. The union would not specify how many drivers participated other than to say “dozens.”
Teamsters Local 117 has pushed to be able to organize drivers under Seattle’s landmark unionization law, passed by the Seattle City Council in 2015.
Don Creery, a Seattle Uber driver who plans to strike Wednesday, said he’s seen a decrease in the share of ride fares he keeps in the five years he’s been driving. But just how much the company is keeping can be an enigma.
“Oftentimes I get 80 percent … There are other times where it’s like, ‘wow I got 40 percent,’ ” Creery said. “All I can really tell you is since 2014, it takes me increasingly more rides, more time, more wear on the car to get to that sum I need at the end of the day.”
Walter Ellis, who has driven on and off for Uber and Lyft since 2015 and plans to attend Wednesday’s speak-out event, said pay on the apps has been shrouded in “a big cloud of mystery.” The companies’ take rates have ranged from 20% to 35%, he said.
Seattle’s unionization law for ride-hailing drivers has effectively been on hold, subject to multiple lawsuits. The council gutted a significant portion of it this year by voting to remove pay from the list of items drivers could negotiate over.
The City Council has indicated it could soon pursue a new strategy for addressing driver pay: setting minimum rates for base fare.