How much e-hail drivers earn has long been a bone of contention in the taxi industry, or at least since Uber began luring drivers away from yellow cabs with the promise that they could gross up to $90,000 a year.
Now the question is becoming part of the campaign to compel Uber to install an option for tipping in its app. The drivers say they need gratuities to make a living wage. And they may soon have research that backs them up.
For the first time since Uber launched in New York in 2011 and changed the yellow-cab and black-car landscape forever, the Taxi & Limousine Commission is surveying e-hail drivers to get an idea of how much money they make. And the labor group that represents the city’s Uber drivers is looking forward to the results as they pressure the company and the commission to make tipping something riders can do without digging into their pockets for cash.
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“We have anecdotal information” about wages and costs, said Jim Conigliaro Jr., founder of the Independent Drivers Guild, which is an offshoot of the international machinists union. “This has been a problem.”
He added that past statements from the company that drivers were netting as much as $35 an hour were unreliable because they did not take into account costs including lease payments and insurance.
The TLC has always surveyed yellow- cab drivers to help it determine the cap on how much owners can charge for a daily or weekly lease. A spokesman said that because the agency now issues a universal license, which allows drivers to move freely across segments of the industry, including taxis and black cars, it seemed time to look at what all drivers were doing. “When we’re done we will have a much clearer look at driver economics,” he said.
Uber, which typically resists when regulators tinker with its app and its business model, is moving to discredit the results before they’re even in. A spokeswoman criticized the TLC’s use of SurveyMonkey for its study.
“Objective data is the bedrock of good policymaking, and studying these important topics using a method that has selection bias and does not capture basic driver characteristics—such as demographics and years in the industry—fails to ensure that the results accurately reflect the driver community,” she said. She also insisted that “Uber NYC strives to offer the best earning opportunity for drivers.”
Because Uber controls 73% of the city’s e-hail market, it offers drivers the most opportunities for customers in that category. But that’s not to say drivers are happy with the company. The issue of pay surfaced with a vengeance two years ago, when the ride-hailing giant cut fares to spur demand. Drivers complained they were working harder to make the same money they used to, while Uber put out numbers that showed ridership was up and insisted that drivers were earning more. Hundreds of drivers went on a one-day strike.
The drivers guild has been pushing Uber to install a tipping function almost from the moment the group formed last May. Uber agreed to recognize the guild, which is not a union, to improve strained relations with its drivers and relieve some of the pressure from its mounting legal issues. (The company is now dealing with allegations of sexual harassment and a cutthroat corporate culture as well as allegations that its self-driving cars sometimes run red lights.) Drivers had sued the company multiple times contending that they were treated as employees, not as the independent contractors Uber claims they are, and were entitled to overtime pay and benefits.
Two weeks ago the guild launched a new front in the gratuities fight, petitioning the TLC to mandate the tipping function. The agency already requires taxis to include a range of tipping options in its electronic payment system.
Uber’s nearest e-hail competitor, Lyft, includes tipping in its app, as do smaller players Juno and Gett. (Via, a car pool– like service, does not.) But Uber has always insisted that tips are not “expected or required.” The company believes its customers prefer it that way.
“Riders tell us that one of the things they like most about Uber is that it’s hassle-free,” a spokeswoman said in a statement. “Riders are free to offer tips, and drivers are welcome to accept them, as has always been our policy.”
Getting Uber to adopt a different approach would be a victory for the guild—and for its drivers, more than 10,000 of whom signed the petition.
“Everyone tips in a yellow cab,” said Sohail Rana, a former yellow-cab and black-car driver who has been with Uber for the past three years. He estimated that just a $1 tip for each ride could add a $400 a month to a driver’s pay. “They don’t in an Uber because they are told by Uber [that] tips are not necessary.”
The TLC has 60 days to rule on the petition’s request.
How much e-hail drivers earn has long been a bone of contention in the taxi industry, or at least since Uber began luring drivers away from yellow cabs with the promise that they could gross up to $90,000 a year.
Now the question is becoming part of the campaign to compel Uber to install an option for tipping in its app. The drivers say they need gratuities to make a living wage. And they may soon have research that backs them up.
For the first time since Uber launched in New York in 2011 and changed the yellow-cab and black-car landscape forever, the Taxi & Limousine Commission is surveying e-hail drivers to get an idea of how much money they make. And the labor group that represents the city’s Uber drivers is looking forward to the results as they pressure the company and the commission to make tipping something riders can do without digging into their pockets for cash.
“We have anecdotal information” about wages and costs, said Jim Conigliaro Jr., founder of the Independent Drivers Guild, which is an offshoot of the international machinists union. “This has been a problem.”
He added that past statements from the company that drivers were netting as much as $35 an hour were unreliable because they did not take into account costs including lease payments and insurance.
The TLC has always surveyed yellow- cab drivers to help it determine the cap on how much owners can charge for a daily or weekly lease. A spokesman said that because the agency now issues a universal license, which allows drivers to move freely across segments of the industry, including taxis and black cars, it seemed time to look at what all drivers were doing. “When we’re done we will have a much clearer look at driver economics,” he said.
Uber, which typically resists when regulators tinker with its app and its business model, is moving to discredit the results before they’re even in. A spokeswoman criticized the TLC’s use of SurveyMonkey for its study.
“Objective data is the bedrock of good policymaking, and studying these important topics using a method that has selection bias and does not capture basic driver characteristics—such as demographics and years in the industry—fails to ensure that the results accurately reflect the driver community,” she said. She also insisted that “Uber NYC strives to offer the best earning opportunity for drivers.”
Because Uber controls 73% of the city’s e-hail market, it offers drivers the most opportunities for customers in that category. But that’s not to say drivers are happy with the company. The issue of pay surfaced with a vengeance two years ago, when the ride-hailing giant cut fares to spur demand. Drivers complained they were working harder to make the same money they used to, while Uber put out numbers that showed ridership was up and insisted that drivers were earning more. Hundreds of drivers went on a one-day strike.
The drivers guild has been pushing Uber to install a tipping function almost from the moment the group formed last May. Uber agreed to recognize the guild, which is not a union, to improve strained relations with its drivers and relieve some of the pressure from its mounting legal issues. (The company is now dealing with allegations of sexual harassment and a cutthroat corporate culture as well as allegations that its self-driving cars sometimes run red lights.) Drivers had sued the company multiple times contending that they were treated as employees, not as the independent contractors Uber claims they are, and were entitled to overtime pay and benefits.
Two weeks ago the guild launched a new front in the gratuities fight, petitioning the TLC to mandate the tipping function. The agency already requires taxis to include a range of tipping options in its electronic payment system.
Uber’s nearest e-hail competitor, Lyft, includes tipping in its app, as do smaller players Juno and Gett. (Via, a car pool– like service, does not.) But Uber has always insisted that tips are not “expected or required.” The company believes its customers prefer it that way.
“Riders tell us that one of the things they like most about Uber is that it’s hassle-free,” a spokeswoman said in a statement. “Riders are free to offer tips, and drivers are welcome to accept them, as has always been our policy.”
Getting Uber to adopt a different approach would be a victory for the guild—and for its drivers, more than 10,000 of whom signed the petition.
“Everyone tips in a yellow cab,” said Sohail Rana, a former yellow-cab and black-car driver who has been with Uber for the past three years. He estimated that just a $1 tip for each ride could add a $400 a month to a driver’s pay. “They don’t in an Uber because they are told by Uber [that] tips are not necessary.”
The TLC has 60 days to rule on the petition’s request.
A version of this article appears in the February 27, 2017, print issue of Crain’s New York Business.
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