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Mar 26

Car Rental Firms Could Garner Advantages Over Lyft and Uber Amid Disputes

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Image Credit: Dreamstime

Driver disputes cast ride-sharing companies in a bad light.

Ride-sharing companies like Lyft and Uber might be bragging about how much of the market share they’re starting to grab in the car rental industry, but recent events are demonstrating these upstarts might have some internal housecleaning to do. These events are making more established car rental firms look like better options for customers, especially if they get an earful from bickering contracted drivers.

Both Lyft and Uber are mobilizing for their initial public offerings later this year, but issues surrounding labor and transparency aren’t going to do much to get those stock market tickers going in the right direction.

Drivers working for both companies in Los Angeles and San Francisco have recently been making noise over declining revenue shares as well as how funds are being distributed internally. The latest projected logoff is the latest in a series of disputes years in the making. One driver interviewed by Fast Company said his income is roughly half of what he used to earn when he started working for Lyft in 2014.

Much of that declining revenue has much to do with how both companies have adjusted payroll for contracted drivers. In December Uber hiked per-minute fees to drivers to compensate for enduring the frequent traffic jams in San Francisco. But it also dropped per-mile rates, which affected longer trips that could be covered in shorter lengths of time. In Los Angeles, Uber cut per-mile rates by as much as 25 percent, which upset the bulk of its driver base.

In response California organizations like Gig Workers Rising are not only encouraging car-sharing drivers to join the protests, they’re also hoping they’ll be on board with a series of demands that the protest group plans to take to both Lyft and Uber.

The demands include a 10 percent commission cap, paying drivers a rate per mile and minute while picking up a passenger, setting a minimum pay of $27.86 before expenses (a policy already adopted in New York City) and a fuel price indexed surcharge built into the fare.

They also want greater transparency in how Lyft and Uber determine a driver’s share of revenue, especially with the cumbersome math involved in calculating costs of fuel, vehicle rent, car washes and variable mileage accumulated.

No doubt car rental firms are eyeing the situation as one that tilts in their favor. Major advantages car rentals have over ride-sharing options include the notion that renters prefer to be in the driver’s seat and prefer to choose their own routes and destinations without involving another party. And then there’s the fact that the driver dispute isn’t exactly going to have a positive public image of the likes of Lyft and Uber.

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