The Industry

How to Tell if the Uber Strike Is Working

A ride share driver picks up passengers at O'Hare Airport on April 10, 2019 in Chicago, Illinois.
Maybe don’t count on hailing one of these on Wednesday. Photo by Scott Olson/Getty Images

If you take an Uber or Lyft on Wednesday in several major U.S. cities, you’ll be crossing a picket line in the eyes of many drivers. Thousands of workers for ride-hail apps are expected to strike ahead of Uber’s highly anticipated initial public offering, which is scheduled for Friday. The mobility company is expected to go public with a valuation topping $90 billion, which would be the third-largest public offering on record and would make millionaires out of many early Uber employees. Drivers for Uber, on the other hand, earn what the left-leaning think tank Economic Policy Institute estimates is $9.21 on average after expenses. Just last month in Los Angeles, Uber reduced what it pays drivers per mile by 25 percent, slashing the rate from 80 cents per mile to 60 cents.

And so they’re striking.

Will you be able to tell? Uber, after all, has a decentralized contract workforce, and it’s certainly possible most won’t strike—and even if lots of them do, the company may not share how big the impact is. Still, if you live in Los Angeles, San Diego, Chicago, Philadelphia, Washington, D.C.; Atlanta, New York, or San Francisco and plan to take an Uber or Lyft (whose drivers are striking too), you should have a contingency plan to get around on Wednesday. It may take much longer than usual to hail a driver and if the number of drivers is way below demand, surge-pricing could go into effect. Then again, Uber could also suspend surges, an action that would give riders the base fare while obscuring any effects of the strike.

Expect for this strike to be bigger than earlier, single-city demonstrations. For one thing, unlike previous driver demonstrations, this time the striking gig workforce is asking that riders abstain from using ride-share apps too. Airports in the Washington, D.C., area are warning passengers that they should plan to take public transit or a taxi in case there aren’t enough drivers working Wednesday. In Los Angeles, drivers are planning to picket at the airport. And in the Bay Area, the public transit authority even made an infographic, “Worried about the May 8 rideshare strike? Take BART to/from the airport instead.” If you open your Lyft or Uber app on Wednesday in a major city and the closest available driver is 10 minutes away, that’s a pretty good sign the strike is having an effect.

Drivers are demanding that Uber pay them a living wage and provide health care, pointing to the fact that despite being unprofitable, the company was able to pay its CEO, Dara Khosrowshahi, $45 million last year. Drivers are also demanding transparency into how much they’re earning from fares and tips, a calculation that currently changes as Uber sees fit, and a clear policy for when drivers are deactivated from the app. They also want to be able to organize without fear of retaliation and are demanding the formation of an independent drivers’ organization so they can make collective demands to improve working conditions. (Some workers who have been driving for a long time will be able to buy small amounts of stock with bonuses Uber is handing out, based on the number of rides completed.)

Because Uber drivers aren’t employees—at least until a court says otherwise—strikers won’t have to call out sick. Uber and Lyft’s whole pitch is that drivers can work whenever they want, so in a sense, the strike will simply be an instance of a bunch of drivers not working because they don’t want to. Still, the collective action could highlight the fragility of Uber’s business model. If the vast majority of their drivers in the participating cities opt not to work, it could cut into the productivity of the company just as painfully as a strike by full-time software developers.

And if the strike is big, it will be painful. Drivers in Los Angeles, San Diego, Chicago, Philadelphia, Washington, Atlanta, and San Francisco are all planning 12-hour strikes. In New York, where drivers are already required to receive a $17-an-hour minimum wage, they are planning a two-hour strike in the morning. Drivers in Sao Paulo and London are striking, too. Uber admitted in its paperwork filed to the Securities and Exchange Commission to take the company public that in 2018, rides from L.A., New York, the San Francisco Bay Area, London, and Sao Paulo made up 24 percent of its bookings. And 15 percent of its bookings happen from airport trips. All of which means: If drivers organize at airports and decide to continue organizing like this in major cities, Uber really will have a big problem at exactly the moment in which it must impress investors.

Uber may have expected this. The company also admitted in its IPO paperwork that it has been slashing driver payouts. “[A]s we aim to reduce driver incentives to improve our financial performance, we expect driver dissatisfaction will generally increase,” Uber’s filing reads. No kidding.

Nor is this the company’s first brush with labor organizing from workers behind the wheel. In 2017, before Uber founder and former CEO Travis Kalanick was ousted, the #DeleteUber campaign led hundreds of thousands of users to delete the app off their phone. The hashtag emerged amid (admittedly overblown) accusations that Uber had planned to cash in on striking taxi drivers in New York who were demonstrating in protest of the Trump administration’s refugee travel ban. That was a very public black eye, which, when combined ugly stories about the company’s frat-boy corporate culture, helped usher Kalanick’s out the door. Now, as Uber becomes a publicly traded tech company, it appears driver strikes, this time from its own workforce, are once again present at the end of an era. In its next chapter, Uber will need figure out how to make its millions-strong driver workforce much happier—or hurry up with its so-far-troubled plans to ditch them in favor of self-driving cars. If not, the riders in liberal urban centers upon which so many of its business depends may paint the app as toxic once again, as they did two years ago. And winning back those drivers won’t come cheap.