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Businesses Transportation

A New Worker-Owned Cooperative Starts Competing With Uber and Lyft (nytimes.com) 72

The New York Times reports that for years, Uber and other ride-hailing companies "offered the promise of entrepreneurship to drivers" to drivers eager to set their own schedules. "But some drivers never received the control and independence they had expected." They struggled with the costs of vehicle maintenance, loans and insurance, and they questioned whether Uber and Lyft paid a fair wage. Legislative efforts to grant them employment benefits were thwarted.

Now, dissatisfied drivers and labor advocates are forming worker-owned cooperatives in an attempt to take back some of the money — and power — in the gig economy.

The Drivers Cooperative, which opened for business in New York this week, is the most recent attempt. The group, founded by a former Uber employee, a labor organizer and a black-car driver, began issuing ownership shares to drivers in early May and will start offering rides through its app on Sunday. The cooperative has recruited around 2,500 drivers so far and intends to take a smaller commission than Uber or Lyft and charge riders a lower fare.

It is an ambitious plan to challenge the ride-hailing giants, and it faces the same hurdles that tend to block other emerging players in the industry: Few have the technical prowess, the venture capital dollars or the supply of readily available drivers to subvert an established company like Uber. Still, drivers who joined the effort said even a small cooperative could make a big difference in their work, allowing them to earn more money and have a say in the way the company was run. The Drivers Cooperative said it planned to pay 10 percent above the wage minimums set by the city's Taxi and Limousine Commission, and return profits to drivers in the form of dividends.

One of the labor organizers who founded the Drivers Cooperative tells the Times that "I've never seen this hunger for change that exists with drivers."
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A New Worker-Owned Cooperative Starts Competing With Uber and Lyft

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  • Capture (Score:5, Insightful)

    by bill_mcgonigle ( 4333 ) * on Saturday May 29, 2021 @01:51PM (#61434652) Homepage Journal

    Watch for NY and CA to classify them as employees of the coop and demand they be paid wages and benefits, no matter how it's structured.

    The pandemic redefined work and the extant power structure is terrified of the [inevitable] gig economy.

    This coop (or its successor) may wind up using Tor and blockchain payments to route around corrupt financial sanctions.

    "Pssst - hey buddy - you wanna engage in mutually-beneficial trade?"

    • Doing that will fuck the driver. W-2?well you cant claim mileage. Thats a huge hit. Along with home office. 1099 will get you close to 20-30k in income deduction. I used to claim miles before the 2017 tax changes. Now I lose out in 22k miles a year as well as my home office. I used to get a tax refund. Now I end up paying almost half as much as was withheld while claiming married with zero deponents (in spite of two kids) CA probably just wants to fuck over the drivers and make them pay higher taxes.
      • If you were a worker owned rideshare cooperative, your car would probably be a depreciable asset, and you should be able to subtract gas, tires, all vehicle maintenance as an operating expense before any taxable profit. I am no tax expert. But I am guessing that making it a cooperative would have some benefits.

    • if it's just an independent co-op. As long as everyone sets their own hours, prices, picks their own tools, etc, etc.

      The problem with Uber/Lift is they control everything (including hours, if you work too few they'll start cutting you off from profitable rides, and they do the same if you refuse unprofitable rides). In short, they function as an employer in every sense of the word.
      • by HiThere ( 15173 )

        There's no real reason that the drivers not be considered employees as well as owners. But the degree of ownership (number of shares?) would need to be dynamically dependent on the amount of time worked.

        Workers cooperatives are a quite reasonable approach, but they require significantly different organization than other approaches. And if different workers have significantly different degrees of commitment (say 40 hr/week vs. picking up an occasional ride) then the coop principle of "everyone gets exactly

        • It really isn't too hard to structure if the cooperative as an entity essentially doesn't try to generate any additional profit to distribute after that fact. They're far better off if they let everyone operate as their own independent contractor with their own hours, rates, etc. and letting the market determine what's a fair rate based on what customers are will to pay and drivers are willing to charge. The cooperative only needs to take enough of a cut to maintain the infrastructure and pay for other staf
          • by HiThere ( 15173 )

            Won't work. You need *SOME* distribution of roles, and some of those roles will be non-driving. You'll need accountants, e.g., and at least one lawyer.

        • by MrL0G1C ( 867445 )

          Why shouldn't they all get one vote? If half the drivers drive 25 hours a week and the other half driver 50 hours per week that doesn't turn the drivers doing 25 hours into half a human. The half that drive 25 hours should have a vote just the same.

          If the half that driver only 25 hours choose the busier hours then that serves the customer better and it makes the quieter times less painful for the half that drive 50 hours.

          If you sat in a union meeting and tried to suggest that part time workers only get half

    • Watch for NY and CA to classify them as employees of the coop and demand they be paid wages and benefits, no matter how it's structured.

      Fortunately it is structured to pay them wages and benefits anyway so it should not be too much of a burden.

  • by Rick Schumann ( 4662797 ) on Saturday May 29, 2021 @01:59PM (#61434678) Journal
    Because Uber must be run by organized crime, they certainly do business that way.
  • There must be a more humane way to offer independent self-scheduled employment. Let's hope this is a step in that direction!

    • I can see that being the case for continuous work like programming or custodial services. But taxi service is literally composed of multiple short single jobs. It is a perfect match for gig work, with the driver free to give as few or as many rides as they want.

      Uber and Lyft screw drivers by excessively inserting themselves between the rider and driver, collecting all the revenue and having complete control over how much of the money paid by the rider ends up going to the driver. The way it should be str
  • Way to go New York (Score:4, Informative)

    by PPH ( 736903 ) on Saturday May 29, 2021 @03:03PM (#61434816)

    I remember back when Uber was just a gleam in a few people's eyes. Some cab companies proposed on-line cab hailing. The NYC Taxi and Limo Commission threw a fit. Had they been a bit more proactive, with the market leadership NYC has in the taxi biz, they could have bumped off Uber and defined the business to their liking years ago.

  • by GeRM_007 ( 627791 ) on Saturday May 29, 2021 @04:15PM (#61435008)
    Many years ago, one of the challenges with the gig-car companies was insurance. The driver's individual insurance didn't want to pay out for business related claims/accidents when they were taking riders places. So then passengers were covered by Uber/Lyft's insurance during rides, and drivers' used their own insurance for the time between riders.

    How will these co-op drivers be insured?
    How will riders be protected/covered in the event of an terrible accident?
    Is there screening and background checks of drivers?
    • Yeah, it'll be interesting to see how they address those issues. Another challenge is to ensure adequate supply, requiring oversupply. They won't be terribly popular if wait times are long and unpredictable.

      To my knowledge neither Uber not Lyft have turned a profit on this business model. This new business may have to find a niche as opposed to operating as a taxi service in all but name.

  • What is the benefit to the riders for this as opposed to Uber/Lyft?
    • They get to share in ownership and company earnings. Oh wait, Uber earnings per share are negative! Well, unless the new co-op can figure out a way to make it profitable, maybe the company will let the drivers invest more money to keep it afloat. Saying "we pay our drivers more" is easy, finding money for it is hard.

  • For those younger than 40, let me describe circles to you. Circles are paths that start in one place, then move in a direction away from the origin. They continue to move away from their current point, repeatedly, until they wind up back at their initial origin.

    1. taxis are too expensive to hire, and it's too expensive to be a taxi driver with regulations and laws and medallions and unions.

    2. we'll do this as a free-for-all, anyone can be a taxi, anywhere, at any time, yay!

    3. we need organization. let's

With your bare hands?!?

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