The sharing economy is seeing its prices slashed. Last week, Uber announced that it’s slashing its base fares, minimum fares, and per minute rates to the glee of riders in 100 cities across the U.S. and Canada. This new pricing structure will amount to a 15 percent discount per ride for the average rider. In New York City, this means that Uber’s base fare will fall from $3 to $2.55. NYC base taxi fares are between $2.50 and $3, depending on the time of day.
These fare cuts were a strategic move on the part of Uber to undercut the NYC taxi and livery cab markets. This past summer, Uber drivers marched the steps of City Hall in order to protest impending legislation by the city that would limit the scope of Uber and other private car sharing services in favor of unionized taxis. Now, Uber drivers are gathering at the steps of Uber’s headquarters in order to protest the deep price cuts.
Drivers argued that the price cuts would effectively require more work for less pay. One Uber driver interviewed by the New York Times said that the new fare cuts would cause him to have to work 10 to 14 hours a day to make the same fee that he once commanded with an eight-hour workday. Drivers were not consulted prior to the implementation of the price decreases.
In the past, drivers for car sharing services have complained that they’re being shorted with respect to tips. Riders who patronize yellow cabs and car services usually offer their driver a tip via cash or credit card at the end of a ride before departing the vehicle. With Uber, Lyft, and other similar services, riders’ credit card information is stored in the app that’s used to digitally hail their ride. The post-ride tip requests are often ignored, with the rider only paying the fare charged for the ride.
Uber has previously come under fire for its hiring structure and the way it classifies its drivers. A class action lawsuit was brought against the company by its drivers at the beginning of September for their right to be considered employees of the company, rather than independent contractors. Unlike workers in its corporate offices, Uber’s drivers are issued 1099 tax forms and are responsible for their own benefits, maintenance, and expenses incurred as a result of operating their own vehicles. Uber responded by issuing a document that bans active drivers from participating in the lawsuit.
As a result of their status as independent contractors and having to pay for benefits that are typically included in the benefits package of a salaried employee, many of Uber’s drivers moonlight for other car sharing services and cab companies.
The story of the struggles of these employees is not limited to Uber. If you’re in a situation where you believe that you’re being denied a fair wage, fair employment status, and access to benefits, contact Morgan & Morgan. We’ll provide you with a free consultation about your ability to receive what you’re rightfully owed by your employer.