Lyft and Uber said they will cease operations in Minneapolis after the city’s council voted Thursday to override a mayoral veto and require that ride-hailing services increase driver wages to the equivalent of the local minimum wage of $15.57 an hour.
Lyft called the ordinance “deeply flawed,” saying in a statement that it supports a minimum earning standard for drivers but not the one passed by the council.
Like, in Seattle, I’m taking Lyfts and Ubers for ~$35 for a 20 minute drive. They could pay their driver $16 to cover the minimum wage for the full hour and then they still have OVER 50% of what I pay. Like, it’s such simple business economics. Why can’t these big corporations figure it out? I hope they get taken over by local services that actually pay their workers.
I don’t know the economics, truly, but there are a LOT more expenses involved in running a large business like Uber on top of driver wages, such as technology service and hardware costs, programmers and central admin/customer service, rent or cost of buildings including utilities, insurance, taxes, fees, consulting and auditing, cybersecurity, legal, and probably quite a bit more I can’t think of. Running a business is friggin expensive.
Definitely not defending paying workers less, just trying to explain why they still might not be in the black even in your scenario.
They shouldn’t even exist in the space since they skirted regulators when setting up. It’s like if the pirate bay set themselves up as a legitimate business.
They would only need to pay the driver 1/3 of the hourly wage for your 20 min ride so 5.3 dollars. Uber/Lyft would make 29-30 dollars.
That’s assuming the cars always have a fare on board - one truth of running a taxi is that there’s a lot of downtime when you don’t have a customer.
The extrapolated head math people like to do based on their narrow interactions to determine how large companies should run is rarely right or useful.