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Uber, Lyft Face Driver Strikes in NYC, London Ahead of IPO

May 8, 2019, 10:46 AM

Thousands of Uber and Lyft drivers will log off ride-hailing apps May 8 in a strike meant to draw attention to gig economy wages and job security concerns. The strike comes on the eve of Uber’s anticipated IPO later this week.

Driver groups have announced strikes in at least 10 cities, including Los Angeles, New York, and London. Strike times will differ in each city since the work actions are being organized by various driver groups. Los Angeles-based Rideshare Drivers United is calling for a 24-hour strike, while the New York Taxi Workers Alliance is calling for just a two-hour app sign-off from 7 to 9 a.m.

The strike shows drivers may have an increased ability to pressure Uber and Lyft through shareholder activism now that both companies will be publicly traded, according to Peter Rokkos, a corporate governance expert in the Rutgers School of Management and Labor Relations.

“At a minimum, you’ve got to get people’s attention and this is going to get their attention,” Rokkos said. Uber wants its IPO “to go as smoothly as possible—hopefully more smoothly than the Lyft IPO.”

“With the IPO, Uber’s corporate owners are set to make billions, all while drivers are left in poverty and go bankrupt,” New York Taxi Workers Alliance Executive Director Bhairavi Desai said in a statement. “That’s why NYTWA members are joining the international strike to stand up to Uber greed.”

Representatives from Uber and Lyft both said their companies are committed to drivers and are working to make their experiences better.

“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,” Uber said.

Lyft said its drivers’ hourly earnings had increased over the last two years and that on average they earn over $20 per hour.

“We know that access to flexible, extra income makes a big difference for millions of people, and we’re constantly working to improve how we can best serve our driver community,” the company said in a statement.

Little Impact, Big Statement

The strike is unlikely to have a significant impact on ride-hailing operations or profits, observers say. But the day of action will have a chance to capture political and consumer attention.

A March driver strike in Los Angeles protesting pay cuts attracted a few hundred drivers to a rally. A few thousand drivers were estimated to sign off the app, according to Rideshare Drivers United. For reference, there are over 50,000 drivers in the Los Angeles area, according to Harry Campbell, who writes about Uber on his blog, The Rideshare Guy.

The nationwide strike has the potential to spur conversation about regulating minimum driver pay rates. New York City recently became the first city in the country to mandate a minimum hourly rate for for-hire vehicles.

Presidential candidate Bernie Sanders (I-Vt.) tweeted his support for the strikes last week, saying drivers “who work for multibillion-dollar companies should not have to work 70 or 80 hours a week to get by.”

A number of labor organizations and unions also drew attention to the strike on social media, calling for members to support the drivers. The AFL-CIO, the nation’s largest federation of labor unions with 12.5 million members, urged members to avoid Uber, Lyft, and New York-based Juno.

Shareholder Value Is ‘Maximum’ Concern

Shareholder activism is a frequent tactic employed by labor unions during disputes with companies.

When changes are unable to be won at the bargaining table, unions will sometimes rally at shareholder meetings or put shareholder resolutions before voters that force discussion of certain issues. For example, the United Steelworkers took their concerns during a lockout with National Grid directly to shareholders last year.

“You’ve got to appreciate that maximizing shareholder value is probably the company’s maximum concern,” Rokkos said.

To contact the reporter on this story: Andrew Wallender in Washington at awallender@bloomberglaw.com

To contact the editor responsible for this story: Terence Hyland at thyland@bloomberglaw.com