Prompted by growing numbers of frustrated Uber and Lyft drivers, lawmakers will hold a hearing on establishing minimum pay for app-based drivers.
After three separate legislative proposals regarding pay for drivers flooded the Labor and Public Employees Committee, the committee will raise the concept of driver earnings as a bill, said state Rep. Robyn Porter, D-New Haven, who chairs the committee, on Friday night.
A coalition of Uber and Lyft drivers from New Haven has been pressuring lawmakers to pass a pay standard, following New York City’s landmark minimum pay ordinance for app-based drivers approved in December. The legislation, which set an earnings floor of $17.22 an hour for the independent contractors, took effect on Feb. 1.
Connecticut drivers have no minimum pay guarantees.
Guillermo Estrella, who drives for Uber, worked about 60 hours per week last year and received $25,422.65 in gross pay. His pay stub doesn’t reflect how much Estrella paid for insurance, gas, oil changes and wear-and-tear on his car. Factor those expenses in, and the Branford resident said his yearly take-home earnings were about $18,000 last year.
Estrella and other New Haven drivers have suggested bill language to cap the portion of riders’ fares that Uber and Lyft can take at 25 percent, with the remaining 75 percent heading to drivers’ pockets. The idea has already received pushback from Uber, which said it was unrealistic given their current pay structure.
Connecticut legislators have suggested two other models for regulating driver pay. State Sen. Steve Cassano, D-Manchester, filed a bill to set a minimum pay rate per mile and per minute for drivers. His bill has not assigned numbers to those minimums yet.
“What (drivers) were making when Uber started and got its name, they are not making that anymore,” said Cassano. “The company is taking advantage of the success of the company. I understand that to a point, but it shouldn’t be at the expense of the drivers.”
State Rep. Peter Tercyak, D-New Britain, proposed legislation that says if drivers’ earnings do not amount to hourly minimum wage payments, Uber or Lyft should have to kick in the difference. Connecticut’s minimum wage is now $10.10, although Democrats are making a strong push this year to raise it.
As lawmakers consider these proposals, they will confront issues raised by the growing “gig economy”: a clash between companies seeking thousands of flexible, independent contractors and a workforce that wants the benefits and rights of traditional, paid employment.
Some Democrats at the Capitol support the changes that favor drivers.
“I thought it was important to make sure our labor laws are keeping up with the changes we are seeing in this emerging gig economy, that we have sufficient safeguards to make sure that drivers are not being exploited,” said Sen. Matt Lesser, D-Middletown.
But the proposals also raise broad, difficult questions like what protections does a large independent contractor workforce need? And how would constraining the business model of Uber and Lyft impact service availability around the state?
Sen. Craig Miner, a Republican of Litchfield who sits on the Labor committee, wondered why Uber and Lyft drivers should have guaranteed pay, when other independent contractors do not. How would this impact the tax benefits realized by independent contractors, he asked.
Uber and Lyft declined to provide data on how many drivers they have in the state, and the Connecticut Department of Motor Vehicles does not keep count. In Connecticut, 82 percent of Lyft drivers drive fewer than 20 hours per week, said Kaelan Richards, a Lyft spokesperson.
Last week, Hearst Connecticut Media spoke to 20 Uber and Lyft drivers in New Haven who are demanding lawmakers protect their pay. All drove full-time for Uber or Lyft or both.
An immigrant from Ecuador, Estrella, the Branford driver, struggles to pay for rent and groceries for his pregnant wife and seven-year-old son using his Uber wages.
“A cup of coffee at the local Starbucks cost $3 or $4,” said Estrella. “How can a trip can cost $3 when you have to drive to them five minutes away and drop them off after seven or eight minutes?”
In December, 50 Uber and Lyft drivers held a strike in New Haven demanding better pay. The New Haven drivers last week said they are planning more strikes soon.
“Why is Uber lowering the rates and why do we have to say yes to keep working?” asked Carlos Gomez, a Guilford Uber driver, last week.
The drivers believe Uber and Lyft are decreasing driver pay and taking a larger chunk of rider fares for company profits. Many New Haven drivers said pay per mile has been decreasing. They liked Sen. Cassano’s idea of setting minimum pay per mile and per minute.
“The payment by mile, it went down by 10 cents,” said Rosanna Olan, a driver from West Haven. “Before it was more than one dollar and now when you have a big truck SUV, working long distance especially is not worth it anymore.”
Uber and Lyft both declined to provide pay rates per mile and per minute for drivers. Drivers are not paid for time spent driving to pick up a passenger, nor for time spent idling waiting for a ride, although the companies’ model depends on having drivers ready to pick up passengers at any moment.
Lyft said nationally drivers earn an average of $18.83 an hour, but did not provide Connecticut specific earnings.
“Our goal has always been to empower drivers to get the most out of Lyft, and we look forward to continuing to do so in Connecticut, and across the country,” said Rich Power, public policy manager at Lyft.
Uber discouraged lawmakers from considering the drivers’ proposal of capping the transportation companies’ cut of rider fares. Uber spokesman Harry Hartfield said the idea wouldn’t work because Uber no longer uses the “commission model” — that stopped about two years ago.
“In order to make sure we can provide customers with an up-front price, driver fares are not tied to what the rider pays,” said Hartfield. “In fact, on many trips drivers actually make more money than the rider pays.”
What the rider is pays to Uber is an estimated price, calculated before the ride starts, Hartfield explained, while the driver receives from Uber a fare that is calculated based on actual drive time and distance. Changing the model could make it hard to give customers up-front pricing and “lead to reduced price transparency,” Hartfield said. New York’s changes raised rates for riders.
James Bhandary-Alexander, a New Haven Legal Assistance attorney who is working with the drivers, said Uber’s current pay model is “irrelevant to how drivers want to be paid for the work.”
“The reason that drivers care is it seems fundamentally unfair that the rider is willing to pay or has paid $100 for the ride and the driver has only gotten $30 or $40 of that,” he said.
Pursuing any of the three driver-pay proposals would bring Uber and Lyft lobbyists back to the Capitol, where they negotiated legislation spearheaded by Rep. Sean Scanlon, D-Guilford, from 2015 to 2017.
Scanlon said the companies eventually favored the bill passed in 2017, which, after some compromise, required drivers have insurance, limited “surge pricing,” mandated background checks for drivers, imposed a 25 cent tax collected by the state and stated passengers must be picked up and delivered anywhere without discrimination.
“One of my biggest regrets about that bill, which I think is really good for consumers in Connecticut, is that we didn’t do anything to try to help the driver,” said Scanlon, who briefly drove for Uber.