The cost of living in cities like New York and San Francisco is similarly skyrocketing, making the time that taxi cabdrivers have to spend driving even more tedious. It is estimated that the average taxi driver in New Jersey works about 30 hours a week, compared to about 20 hours for Uber. These problems will only worsen as more drivers join the Uber-Lyft-taxi-service, which is expected to increase from about 10 million in 2016 to as many as 40 million by 2020. This has additionally been the case for other transportation services, including the recent surge in Lyft rides. Lyft’s founder and CEO John Zimmer have said that it’s challenging to find a job in this industry” plus that Uber’s drivers “aren’t getting paid enough. The problem is that these companies are using their drivers as a cheap labor source without paying the drivers correctly.
For example, Uber used to pay its drivers at least $3 per hour, whereas Lyft is now producing its driver at $7 and 50 cents per ride. Although the companies claim to make a profit, they are losing money. Because the cost to operate the vehicles has gone up, it was difficult for them to sell any more cars; therefore, they’ve had to lay people off. Consequently, instead of working more hours, drivers have given up their jobs and become unproductive. What is happening is not just an issue for taxi and limousine companies.
Taxi and light vehicle drivers in Detroit have also found themselves in the middle of this problem, with several drivers cutting back on their hours to try to survive. There are currently about 8,000 drivers who work for Lyft and Uber in Michigan, according to the Detroit Free Press, although some estimates put the number as high as 12 500. Of course, these are just the workers who have chosen to sign up for certain services. Many others have given it a shot, only to have their driver’s hours cut to zero. Drivers also find themselves with no benefits, no health insurance, or no retirement plan at their current jobs.
According to a New Yorker report, about 500 000 drivers work for Uber, Lyft (and others) in America, where the company has already brought in $1 2 billion in 2015. McKinsey Company’s study estimates a $5 point 7 billion market for ride services in American cities, which’s not all that bad, considering that a driver is earning somewhere between $2.60 and $4.80 an hour. However, only if they work around the clock because the pay varies wildly depending on where you are in a city.