Well, the first data set is in folks and the results are a bit of a mixed bag. Some of you might remember the recent ruling in New York City about six months back. The wage rule basically guarantees that drivers will be receiving at least a minimum wage while driving for the popular ride-hailing services of Uber, Lyft, Juno, Via, and more. But, what does it mean for the industry as a whole? One of the things that both rideshare companies have stated is that minimum wage rules would hurt their bottom line. Uber fare would increase, naturally, as well as Lyft’s. According to reports from New York City, it isn’t as bad as they made it out to be.
The Story from NYC
According to early reports on Bloomberg, ridership is currently experiencing a reflex to the uptick in Uber fare that occurred to make the wage rule go into effect. In short, in order to install the wage rule, the rideshare companies were forced to raise prices for riders. This has apparently coincided with an 8% decrease in rider demand on Uber and approximately 17,000 fewer rides for Lyft.
What Does This Mean for Rideshare Drivers?
Well, to be honest, the data isn’t clear, yet. The reason being is that in New York City, rideshare services usually peaks in March. After peaking this March it followed the trend and dropped in April. It was supposed to rebound in May. But this year, it didn’t follow the trend. This doesn’t look great for Uber or Lyft and their bottom line, but it could be working out for the drivers. Only time will tell. If you are a driver in New York City, we like to hear from you. Did the wage rule help or hurt you? How did the increase in Uber fare affect your daily earnings? Do you think the minimum wage rule is a fair pay for Uber drivers?
In response to the recent downturn, Uber CEO Dara Khosrowshahi said, “We think the environment can get better, but New York continues to grow for us and continues to grow at a healthy pace on a dollar volume standpoint.”
Is That Good or Bad?
This might suggest that Uber at the very least doesn’t view the recent wage rule as detrimental to their business. It is encouraging to see that it isn’t, at this point. As long as we see growth coinciding with an increase in cost for Uber, this is good news for drivers. It could mean that more initiatives like the wage rule could come into effect in additional cities without tipping the economic scales. If Uber and Lyft can absorb some of these costs and continue to grow it could mean that rideshare drivers could see an increase in earnings. Though it is still too soon to call this initiative a full-on success.
As for how much rideshare drivers make in NY? That remains to be seen after the dust settles and ridership comes back to normal.
One interesting aspect of the report to pay attention to…
New York City is obviously a huge urban setting, that isn’t a great indicator of things nationwide. However, the fact that they are starting to tax “road congestion” could be a precursor to new fees presented by Uber and Lyft. Drivers should keep their eyes peeled for congestion fees levied by their municipality as driver saturation increases in their market. Fees like this are one of many in which drivers could start to feel a decrease in earnings in the future.