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Uber, Lyft Drivers Plan Strikes In 10 Cities To Protest Low Wages And Working Conditions

Uber and Lyft Inc (NASDAQ: LYFT) drivers are planning to strike on May 8 at 10 locations in the U.S. to protest low wages among other concerns.

Organizer Rideshare Drivers United is planning a "National Day of Action" and has been joined in its efforts by the New York Taxi Workers Alliance (NYTWA), which represents 21,000 yellow taxi, green cab, app-based, livery and corporate black car drivers in the New York City area. That group plans a two-hour strike, from 7:00-9:00 a.m. EDT, across the city with a rally at 1:00 p.m. at Uber and Lyft headquarters.

Rideshare Drivers United is planning actions with local groups in Los Angeles, San Diego, Chicago, Washington, D.C., Boston, Georgia, Philadelphia and Connecticut.

In New York, drivers are demanding an end to unfair deactivations that force drivers to fear losing their jobs, livable incomes and regulated fares that would guarantee drivers between 80 percent and 85 percent of the fare.

"I'm striking for my kid's future," Uber driver Sonam Lama, said in a statement. "I have a five-year old son, and I drive for Uber to support him. But it's becoming harder and harder. First Uber cut the rates, then they put too many cars on the roads so there weren't enough fares to go around. In the IPO filing, Uber said drivers will only get more dissatisfied because they plan to cut our pay and stop incentives. We don't want our wages to stay just minimum. We want Uber to answer to us, not to investors. The gig economy is all about exploiting workers by taking away our rights. It has to stop."

Uber says it's losing money

Uber's initial public offering (IPO) is scheduled for this Friday, May 9. Lyft just had its IPO in March, raising $2.3 billion. Uber has claimed it loses 58 cents per ride, and lost more than $3 billion in 2018, but its IPO is expected to value the company at between $80 billion and $90 billion, according to experts.

Rideshare Drivers United is calling for a 24-hour strike among its members, which include 4,400 in Los Angeles. It is demanding that Uber reverse a 25 percent wage cut and that both Uber and Lyft guarantee a $28 per hourly minimum rate, which it claims works out to $17 per hour after expenses, the equivalent rate mandated in New York.

The group's Drivers Bill of Rights includes a10 percent commission cap, transparency around deactivations, the right for drivers to organize and negotiate with the companies, and community standards around traffic and emissions to ensure that the rideshare industry benefits the cities where it operates.

"Uber estimates that 15 percent of its revenues come from airport pickups," said Karim Bayumi, a Lyft driver who typically works at the Los Angeles airport. "We provide an essential service, but Uber and Lyft investors are the only ones reaping the benefits. Our picket and rally will show that rideshare drivers will not be invisible – we demand justice.

Government: Gig workers are contractors

The efforts by drivers for Uber, Lyft and other ride-sharing services to increase pay has been complicated of late by court rulings, and a decision by the Trump Administration to recognize "gig economy" workers as independent contractors in a decision seen as a big win for business.

A U.S. Department of Labor opinion letter, issued on April 29 by the department's Wage and Hour division, concluded that workers who provide services to consumers through this specific company's virtual platform are not employees of the company, and therefore the company is not obligated to pay benefits such as medical insurance, minimum wages and overtime.

"An important role of the U.S. Department of Labor is to ensure that employers who want to do the right thing have clear compliance assistance," said Keith Sonderling, the division's acting administrator, in releasing the opinion. "Today, the U.S. Department of Labor offers further insight into the nexus of current labor law and innovations in the job market."

In January, the National Labor Relations Board made a similar ruling, determining that drivers for an airport shuttle service were not employees under federal statute, but independent contractors.

Higher wages could impact earnings

In its IPO filing, Uber noted that ongoing litigation over classification of drivers could have a materially harmful impact on its earnings. In March, it settled a case involving drivers in Massachusetts and California for $20 million. Further reclassification of drivers would "require us to fundamentally change our business model, and consequently have an adverse effect on our business and financial condition," Uber said.

Lyft has fought the minimum pay directive in New York, but a state Supreme Court judge rejected its efforts just last week.

"This ruling is a testament to the power of driver unity," Bhairavi Desai, NYTWA executive director, said in a statement. "For the first time ever, app drivers and taxi drivers united through our union to win the historic minimum pay rule and vehicle cap in New York City. But both Lyft and Uber continue to put their craze for money before the humanity of hard-working drivers."

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