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Uber Drivers Speak Out on That MIT Hourly Pay Study

Last week, a public relations skirmish broke out between the Massachusetts Institute of Technology and Uber, after researchers at the school’s Center for Energy and Environmental Policy Research (CEEPR) released a dismaying study on the subject of ride-sharing drivers’ profits. Across the board, they estimated, after accounting for such business costs as fuel, depreciation, and insurance, Uber and Lyft drivers — independent contractors by definition, and thus granted few of the protections that even the most rudimentary part-time jobs boast — often saw their take-home pay dip well below $4 an hour. 

After the gist of MIT’s findings were conveyed to the public square by Sam Levin’s March 1 article for the Guardian, Uber — far and away the largest ride-share platform, with an estimated 88 percent participation among operators — quickly contested the numbers. Uber CEO Dara Khosrowshahi even took to Twitter to blast MIT, joking that the august research university’s initials stood for “Mathematically Incompetent Theories (at least as it pertains to ride-sharing).” By Saturday, the study’s lead, Stephen Zoepf, quietly emailed a walk-back to Reuters, suggesting that the fire MIT found in the industry’s smoke might allow for a few different layers of interpretation.

Lyft CEO Logan Green, who has tweeted a mere 167 times since 2008, adopted the WarGames strategy, in which the only winning move is not to play. Instead of wading into the firefight, Green took the opportunity to plug his company’s rapidly developing role in medical transport, i.e., non-ambulance rides to and from medical facilities. On the company’s official Twitter, its deluge of funny GIFs and earnest customer-care replies flagged not for a moment. Uber’s Khosrowshahi acknowledged (at least temporarily) mended fences on Saturday, and by the time The Shape of Water was anointed Best Picture of 2017 at the Academy Awards, there was, as Wheeler’s telegrams in Citizen Kane might have put it, no war.

Let’s take a step back. Bystanders to this fight will find it hard to resist assigning face and heel roles: In this corner, Uber, the mustache-twirling villain, tossing defenseless driver operators (“partners,” in gig economy parlance) into the meat grinder. Challenging the transportation Goliath, there’s MIT, benevolent bulwark of higher learning, ceaseless fount of geniuses across a broad spectrum of human endeavor, home of the finest Will Hunting movies, soberly but decisively assuming a defensive posture over the racked bodies of the ride-share industry’s labor pool, as the university apparatus is wont to do, or, at least, would like to be seen as doing.

“Bullshit,” Uber driver Shahid (who, like most of the contractors I spoke with, asked not to be named in full) told me Tuesday morning, as he used a cloth rag to wipe down his powder-blue Honda Accord, overlooking the Flushing Bay Promenade. I took an extended lunch break from one of my day jobs to pedal out to the LaGuardia Airport For-Hire Vehicle holding area (where drivers wait for audio alerts to scoop up a fare at the terminal) and find out what drivers thought about this public squabble over driver pay. I learned Shahid’s biography in about nineteen seconds: He had a mortgage, he had his children’s tuition bills, he’d worked at a grocery store for many years, and he’d turned to ride-share driving when he lost that job.

“Peak times, even when you take out the gas, the insurance, the car note, the tolls, you take home twelve to fifteen an hour,” Shahid said. “During slow times, you make about minimum wage. But that’s before tax.”

Most of the drivers I spoke with this week joined Uber at some point in the last three years, validating reports of low contractor retention. Shahid started in November of 2017 and had never before driven any kind of taxi, or for any ride-share company. By my lights, he seemed an incredibly quick study, and his grasp of ride-share metrics and P&L ratios were on par with someone who’d been in the game for years, not months. He was only too eager to crack open his driver app to show me a few relevant rides, such as a Westchester-to-Westchester job that was mostly spent on the Bronx River Parkway, with a payout of about $11. Another ride, one that brought him to LaGuardia from Brooklyn, was almost identical in terms of time and miles but paid more than half again as much. As we talked shop for almost thirty minutes, it became clear that he knew exactly which work practices would butter his bread.

Shahid and many others confirmed some things I already knew from my own years behind the wheel. For trips in the five boroughs, plus Westchester and Long Island, the absolute minimum fare (let’s say, driving someone from their apartment on First Avenue and East 86th Street to the subway station at Second Avenue and East 86th Street) is around $7 or $8. Traveling outside those eight New York counties reduces the base fare to $4 or $5, and drops the mileage and time rates as well. (Shorter version: New Jersey and Connecticut rides are cheap as hell.)

Nationwide, rates fluctuate based on region, county, and state. Some of the worst fare structures I found (by exploring city-specific pages on the Lyft website, as well as fare calculators on other platforms’ sites) are in Florida, with Miami, Tampa Bay, and Orlando drivers earning 30 percent less (per minute and mile) than their colleagues in Daytona Beach, one of the only Sunshine State markets to offer rates that begin to approach what one can earn in most other parts of the country. Working near small towns and in rural areas may permit drivers access to fare matrices that look reasonable at first glance, but when those ride requests come once an hour or less, as Raging Bull’s Jake LaMotta says on the subject of cooking a steak too long, it defeats its own purpose.

***

I caught up with Uber driver Dennis on his smoke break. I briefed him on the bullet points of the MIT study, and Uber’s response. He was carrying two smartphones, which is pretty common among drivers who want to cover all their bases by signing up for every available platform.

Dennis wrinkled his nose at the sub-$4-per-hour figure, and suggested that it sounded a bit extreme. “Maybe in the sticks,” he said. “If you want to make decent money at this, you have to work city jobs.” Our unscientific line of inquiry quickly concluded: Operating a car for a ride-sharing platform is a tough racket; you gotta put in the hours, don’t take two-hour lunches, do work crunch time in Manhattan, and always have a backup plan when the push alerts stop pushing.

This is all big-city talk, with some degree of carry-over into other metro areas around the country. Not surprisingly, online ride-share operator support groups have lamented the drought of fare opportunities in small towns and rural areas. Drivers in these markets may either make a special effort to head to the nearest larger market (Fargo instead of Moose Lake) or find alternative ways to make their dead time pay.

The MIT report relies on data from a 2017 study by “The Rideshare Guy” — Harry Campbell, a blogger and writer who has contributed to Forbes, the New York Times, and Wired — to make allowances for geography. Campbell’s survey, drawn from a pool of over 1,100 respondents, provides an array of interesting findings concerning demographic data like age, race, and gender. It’s a commendable job of work, and a fair place to start a conversation on dozens of intersecting concerns about the industry, about labor, and so on.

At the same time, as CEEPR’s only source of self-reported driver data, it’s being asked to do a lot of heavy lifting. When Zoepf tweeted out his official statement on the paper, he explained how differently calibrated calculations might show overall driver take-home pay to be more than double the now somewhat incendiary $3.37-per-hour estimate.

Still, skepticism or apathy toward MIT’s study doesn’t automatically translate to an unquestioning embrace of the tech platforms in question. More than one driver expressed ambivalence, or something harsher and more colorful, toward one ride-share company or another. The names of this or that company were sometimes spat more than spoken. Lyft loyalist Omar, who wound up at the LaGuardia lot after fruitlessly cruising for fares around nearby Flushing, explained that he’d shut the door on Uber after getting burned one too many times.

The last straw occurred in 2016 when he took a drowsy, late-night rider to Jersey City from Battery Park, only for the semi-coherent young man to inform him, well after crossing the Hudson, that the intended destination was Twelfth Avenue in Manhattan, not 12th Street in Jersey City. Although the New Jersey destination was, in fact, a matter of permanent digital record, Uber issued a merciless fare adjustment the following day, sticking Omar with the Lincoln Tunnel toll, and reducing the price of the ride to what it would have otherwise cost, had the somewhat blissfully impaired passenger double-checked his order details: eleven bucks to go from FiDi to one of those ice palace cinder blocks overlooking Chelsea Piers, down from a relatively lofty thirty plus a blanket twenty for going over the river. All in, counting an E-ZPass transaction that would now never be recouped, Omar netted negative one dollar for his trouble — not including expenses.

You may be thinking, Omar’s mistake is his own affair, and if Uber hoisted him up by his Skechers to make his lunch money fall out of his pockets on behalf of an irate rider, well, c’est la guerre. I even told him about how, when I drove for Lyft and Uber, I always confirmed a passenger’s destination, especially when it was a long haul. Maybe Omar could write letters to E-ZPass, in the hopes of reclaiming the errant toll.

Or maybe you’re already cringing from muscle memory of a different kind of toll, a psychic toll, extracted after interacting with bureaucracies. A driver like Omar will almost always find that the less agonizing option is to take a mulligan, and just plug away for an extra hour or so, turning an anticipated twelve-hour shift into thirteen or fourteen hours.

Several drivers who had signed on with Uber, Lyft, Juno, and Gett showed me a relatively new feature, a shift timer, implemented to comply with new New York City Taxi and Limousine Commission rules aimed at curbing driver fatigue. When you’ve been on duty for ten hours, you’re automatically logged out for a mandatory eight hours. Even so, flouting the (debatably) well-intentioned TLC rule is a simple matter of logging off Uber and logging on to Lyft, or vice versa. And if you run out the clock on two apps, there is always a third, or fourth, and so on.

Which led to my final query to each driver at the LaGuardia lot: Yes, we talked about how you have to expect to put in a long day (upwards of twelve hours) to earn a decent take-home. But should you have to? You can imagine the answer, but if you can’t, here’s a hint: It was unanimous.

***

Over the years, I’ve spoken with drivers hanging out at Taxi and Limousine Commission offices, at Uber and Lyft headquarters, at airports, at dive bars and Indian restaurants. The complaints about the soft tyranny of ride-share platforms remains consistent. The Uber driver is, in antiseptic-smelling policy terms, a small business owner, and business owners are nothing if not familiar with the thousand bleeding cuts that threaten to make a hash of their bottom line.

But the “Morning in America”–esque swelling pride we’re supposed to associate with American small business strikes a dissonant chord when you consider the Uber driver. What kind of small business is it that keeps you turning the mill every minute of a fourteen-hour day, alone, where a restroom break has to be considered in terms of lost revenue opportunities? Ride-share drivers are bound to their own steering wheels by invisible handcuffs, and while they may be the only ones who have the keys to those cuffs, the first thing they notice is they can’t seem to find those keys, forever. Driving for Lyft or Uber — or carrying an order of poke for Postmates, or building furniture for TaskRabbit — often makes one feel like the emissary in Franz Kafka’s An Imperial Message, doomed to an eternity of insisting the urgency of his charge against unending throngs of spectators and bystanders pressed the other way. Or like inhabitants of a variation on Jeremy Bentham’s famous panopticon, where one laboring body is beset on all sides by innumerable collectors of fines and fees — a “pan-kleptocon” in the shape of a smartphone and an automobile of your choosing. Show me six months’ of checking account statements of those same 1,100 drivers, and I’ll show you a virtual prison with no bars and no guards, but an easy-to-use interface on Apple iOS.

If CEEPR’s long list of sponsors — energy companies like BP and National Grid, automakers like Toyota — is any indication, the center speaks to large policy-making circles, spread across massive global markets. But the center’s clinical remove, while plausible in terms of academic decorum and protocol, has produced a kind of haze over what kind of conversation the study was supposed to have ignited. (The one conversation it did start certainly couldn’t have been the one it was after.) And I can’t look at the heavy reliance on a single, secondary data set, the Rideshare Guy survey — already confined to a narrow array of subjects — without a fair amount of disappointment.

With all due respect to Campbell, is there no significant driver data on weight gain, blood pressure, or heart disease, or stats relating to morale and mental health? What about steep bureaucratic expenses, like livery operator insurance, special licensing, and vehicle tags? What about lost time spent duking it out with City Hall over parking tickets and moving violations? Perhaps in expanding the scope of its examination, CEEPR (or a research entity like it), having erred in calculating hourly take-home pay by as much as 253 percent, could have done more to make it less easy for Uber’s CEO to destroy months of research and analysis in a single 9:25 p.m. tweet.

I can grok the letter of MIT’s study, but not the spirit. I envision the CEEPR panel through the famous Hindu parable about the roomful of blind men who cannot identify an elephant by its parts. Except that the creature in the room is an Uber driver, and the room is an abattoir, and the wise, blind men are conditionally (yet permanently) unable to figure out why the animal is dying.

 

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FOOD ARCHIVES Media NYC ARCHIVES

Restaurant Workers Sing, Dance, and Demand a Higher Minimum Wage

A new video posted earlier this week to YouTube shows cooks, servers, and dishwashers all over New York City singing and dancing to Barrett Strong’s “Money” as they demand a $9 minimum wage.

The video is cute, but it also brings attention to one of the most overlooked issues in the food industry: Unlivable wages. The minimum wage in New York is just $7.25, and for those working with tips, it’s only $5. “Not all of us work in $30-plate restaurants and bring home $400 a night in tips,” says Brenda McLean, a 31-year-old server in New York, “Most of us are just getting by.”

Tim Murphy and Jonah Green, freelance writers who worked together previously at New York magazine, made the video for Restaurant Opportunities Center United and Strong for All. The duo filmed workers lip-synching into pepper mills at La Palapa, Bogota Latin Bistro, Crema, and the employee-owned cooperative, Colors.

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Assembly Speaker Sheldon Silver Wants To Bring The $9 Minimum Wage To New York

Because, in 2013, $7.25 is seriously not cutting it.

One of the most attentive features of President Obama’s State of the Union address the other night was his proposal to raise the federal minimum wage to $9. The move comes as a reaction to inflation, the higher costs of seemingly everything and the revelation of “Oh wait, no one can live off of $7.25” (let alone $9 too, actually).

So, as a result, Assembly Speaker Sheldon Silver announced yesterday that he has introduced legislation to bring that same level to New York State. If the bill is enacted, the higher minimum wage would begin next January, with inflation indexed in 2015.

But, of course, the bill has some sort of political subtext. Last year, Mr. Silver wanted to raise the current state minimum wage of $7.25 to $8.50. In Governor Cuomo’s budget speech a few weeks ago, he called Mr. Silver’s bluff and said $8.75 would be more properly sufficient for the State. And, now, Mr. Silver is using Mr. Obama’s speech as evidence that he meant $9 the whole time.

It’s common that states follow federal trends in situations like these; states peg their minimum wages to D.C. and build upon the federal as a default. But who knows what Washington will do in this situation. Congress has a hard enough time passing Sandy relief bills, let alone a minimum wage bump.

And, in this case, New York only moves if Washington moves. We’ll just have to wait and see.

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NEWS & POLITICS ARCHIVES THE FRONT ARCHIVES

Cuomo’s Push for Minimum Wage Hike is a Good Start, But it’s Not Quite Enough, Critics Say

Low-wage workers and advocates took New York City by storm at the close of last year with mass demonstrations across the city for better wages and work-place conditions.

Thus, one might assume that Gov. Andrew Cuomo’s call for a $1.50 minimum wage increase during his annual State of the State address would signal a great victory for those advocating for higher worker wages.

But it turns out that while advocates for wage increases are happy to see the governor put his stamp of approval on a potential wage-hike, many also contend that a $8.75/hour minimum wage still isn’t enough for workers and their families to survive.

“Is $8.75 sufficient? Of course not , but it’s a huge step in the right direction.” James Parrott, chief economist at the Fiscal Policy Institute, tells the Voice. “I think people see that this is the year that this will happened in New York State. This is not going to be the end of it. This is not going to be sufficient.”

Last January, the FPI released a report that called for incremental increases in minimum wage levels that would pay workers a minimum of $10/hour by 2014. New York’s minimum wage hasn’t increased since 2009, and has only gone up, in accordance with the federal minimum wage, by 10 cents in the last six years.

A $10/hour figure would bring the minimum wage to 108 percent of the federal poverty line for three-person families — a percentage that hasn’t been achieved since the 1960s and 1970s. New York’s current minimum wage is only 82 percent of the federal poverty line for three-person families, according to the report.

“It is imperative that any discussion about increasing New York’s minimum wage be realistic about just how much money it takes to live in this State, and reflect the needs of the families who work so hard to make ends meet,” UnitedNY, a labor coalition, said in a statement.

A true living wage in New York City comes out to about $12.75/hour for one adult and $32.30/hour for a single adult with two children,” according to Poverty in America’s Living Wage Calculator.

Despite the disparity between the minimum wage and the actual living wage needed to stay afloat in New York, there are still those who are opposed to any type of minimum wage increase — including a number of employers within the business industry.

“It is difficult for an employer, if they only consider their own situation in the short term.
Public officials should help in communicating to employers that there’s a longer term effect here,” Parrott says. “When you raise the minimum wage…without putting any one company [or] any one business at a disadvantage, decades of history show that employers are able to adjust over time to the higher wage levels. They become more efficient in the process.”

If the state legislator does pass the $8.75 minimum wage increase, that would boost New York up from the 19th to 3rd on the list of states with with the highest minimum wages, according to the FPI report.

The report proposes that New York begin adjusting its minimum wage to reflect changes in the Consumer Pricing Index — as a number of states, including Washington and Oregon already do.

“The Governor’s commitment to raising the minimum wage is a step in the right direction toward improving conditions for workers, but the proposed increase from $7.25 to $8.75 an hour without indexing it to inflation simply doesn’t go far enough,” UnitedNY said.

Whether truly sufficient or not, Cuomo at least appears committed to getting some kind of wage increase passed.

“The current minimum wage is unlivable. It’s only $14,616,” Cuomo said in his address. “My friends, it does not add up. Nineteen other states have raised the minimum wage; we propose raising the minimum wage to $8.75 an hour. It’s the right thing to do. It’s the fair thing to do. It is long overdue. We should have done it last year. Let’s do it this year.”

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NEWS & POLITICS ARCHIVES THE FRONT ARCHIVES

NYC Living Wage Bill Heads to Court

‘Living’ sounds much better than ‘minimum.’

When Council Speaker Christine Quinn announced the introduction of a ‘living’ wage bill, Mayor Bloomberg compared the gesture to Soviet statism in April, arguing that “the last time we really had a big managed economy was the USSR, and that didn’t work out well.”
Unfortunately for him, the rest of the City Council didn’t see eye-to-eye on his shrieks of socialism: in June, the City Council overrode Mayor Bloomberg’s veto on a bill that would establish what has been called a ‘living’ wage, which would pay any worker in a firm that receives city subsidies at least $10 an hour with benefits or $11.50 without benefits. The margin against the Hozziner was indeed vast: the veto was thrown out in a 46-5 vote.
But the bill that resulted was much more watered down than the original idea: in it, firms had to receive over $1 million in subsidies and make over $5 million all together in revenue every year to qualify. Now, the ‘big managed economy’ that Bloomberg warned against only affects about 400 to 500 people.
Regardless, the Mayor’s office is still taking the legislation to court.
The lawyers for the City filed a suit with the Manhattan Supreme Court yesterday on the basis that the ‘living’ wage bill infringed upon national and state laws of minimum wage. Also, they argued that the bill interferes with Bloomberg’s executive privilege to negotiate economic deals. According to the Mayor, the bill threatens businesses, especially industrial firms, real estate developers and a whole slew of contractors.
The City Council is fighting fire with fire, assuring it will meet the Mayor in court over the bill. As of now, the bill is deemed to take effect in late September. In a statement, Christine Quinn vented her frustration over the Mayor’s decision to sue the legislative branch of Gotham – a move that hasn’t happened in years:
“It is disappointing that the mayor has chosen to challenge these laws rather than enforce them. The Council stands by this legislation, and we look forward to proving our case in court.”
While the powers-that-be strive to bring legal matters into the situation, the workers on minimum wage are still living in this expensive city on $7.25 an hour. And Lord knows how much Bloomberg makes in a single day on the job. Anyway, it looks as if we’ve got ourselves a court showdown on our hands come fall.