[By Aaron Gordon]
At the beginning of October, Lyft rolled out a mandatory app update for its drivers. After installing the update, drivers noticed they could no longer see how much the rider paid for any given trip. It’s yet another move that potentially undercuts Lyft’s (and Uber’s) legal logic that classifies drivers as independent contractors instead of employees, to say nothing of how it further obscures how the app actually works.
This change, which was reported by users on the popular rideshare driver forum Uberpeople.net and written up by The Rideshare Guy, makes clear this change was an intentional part of a larger redesign of weekly pay statements Lyft announced in September.
In place of the “Rider Pays” section of the fare breakdown, drivers are directed to a web link that shows a weekly breakdown of their fares, how much Lyft took, and how much all of their riders paid during that time period in aggregate. In other words, when a driver looks at their history, the app now only tells them what they earned—not the total of what the rider paid, potentially keeping Lyft’s own take pretty opaque.
“Personally, it makes me wonder what they are hiding,” one driver, who, like all the others who spoke to Jalopnik, asked for anonymity in order to speak freely out of fear of retribution from Lyft. “I mean, I know when I was a kid and didn’t want my parents to know something I kept it from them and lied to them and it definitely was cause [sic] I was up to something that was wrong for me to do. It’s that simple.”
Lyft, however, says it is not that simple.
“Drivers have said that it’s hard to track how they earn with Lyft so we created a clearer and more comprehensive breakdown of their earnings with the weekly pay statement,” A Lyft spokesman wrote Jalopnik in an email, emphasizing the change is part of a broader redesign that highlights driver totals, earnings, and possible deductions in a clearer weekly summary. The company also says that individual ride details “can be misleading” so they “wanted to highlight” higher-level data.
Lyft’s hiding of the rider’s fare from drivers, which the company says began rolling out on September 12, came just a few weeks after a Jalopnik investigation found Uber and Lyft take a much higher portion of each fare than they publicly admit. Both companies denied those findings, but refused to provide any raw data to support their claims. Jalopnik used the information drivers could see about each fare, including the amount the rider paid, to conduct its study of 14,756 fares.
Two drivers who spoke to Jalopnik speculated Lyft removed this information as a result of the investigation’s revalations, but Lyft said “That is unequivocally false. This update was in the works for some time and is not in response to the take rate article.”
Aside from antagonizing drivers, the move has potential implications for the ongoing legal debate about the employment status of rideshare drivers. Lyft and Uber maintain they’re merely intermediaries that facilitate transactions between drivers and riders, which makes drivers independent contractors. Some legal experts, politicians, and drivers dispute this interpretation of labor law and contend they are, in fact, employees misclassified as independent contractors.
Removing the driver’s ability to even know what the rider pays for each trip further highlights the disconnect between Lyft’s legal arguments and its business practices. Over the last few years, Uber and Lyft have gradually de-coupled what the rider pays from what the driver earns. Riders are quoted a price for a ride based on an opaque algorithmic calculation, while drivers are compensated based on a “rate card” system, which is a simple time-and-distance calculation (say, 80 cents per mile and 20 cents per minute). Drivers can also receive flat-rate bonuses for trips in high demand areas.
What this means is, practically speaking, companies like Uber and Lyft are not so much intermediaries in a single transaction but one party in two separate transactions: the rider pays Lyft, and then Lyft pays the driver, based on two totally separate pay structures and calculations.
In its statement to Jalopnik for this story, Lyft explained how the decoupling of driver and rider payments influenced their decision to no longer show the driver what the rider paid. “Because driver pay is decoupled from what a rider pays, we wanted to highlight aggregate earnings content and basic insights like total hours & booked hours which can encourage drivers to rely less on individual ride details, which can be misleading, and more on the larger weekly earnings picture.” But as commenters at Uberpeople and The Rideshare Guy’s post on the subject pointed out, there’s nothing stopping Lyft from providing both.
Earlier this year, the National Labor Review Board’s general counsel issued an advice memo siding with Uber and Lyft’s interpretation of the independent contractor debate. But Marshall Steinbaum, an economist at the University of Utah who studies labor markets, said the removal of the rider’s fare affects a key element of the National Labor Review Board’s calculus on the subject.
One of their criteria is, in Steinbaum’s words, “whether the workers are at risk of ‘profit and loss,’ i.e. does their performance affect their revenue. [It’s] hard to say it does if the worker doesn’t know what the revenue is.” Steinbaum went on to call it “farcical” that Lyft can simultaneously claim to be merely facilitating a bilateral transaction when “drivers don’t know what the platform is charging.”
Sanjukta Paul, a law professor at Wayne State University who specializes in antitrust law, agreed that this change was “very interesting” from a legal perspective. “What kind of independent business isn’t allowed to have access to its own business revenues, by its software vendor?”
When asked about Steinbaum and Paul’s comments, Lyft replied, “Drivers still see these revenues on a weekly basis as the new weekly pay statement includes the weekly total amount riders paid, including all fees, taxes and other pass-through costs.”
At least some drivers say not being able to see what the rider paid will affect their revenue, or at least the thoroughness with which they can analyze their profitability. One veteran driver told Jalopnik that he used to look at every fare to see if the rider paid way more than he received. If that was the case, he would contact Lyft support and “pursue fare adjustments.”
“I’d consistently get adjustments,” the driver said. “They’d apologize. They’d admit mistakes. They’d explain new Power Zone features [when drivers receive a few extra dollars’ bonus in high-demand areas] and different rate card adjustments internally that were not debugged properly yet. They’d say sorry and compensate…I lose all of this now.”
Another driver said the change probably won’t impact them on a day-to-day basis, but “it’s more a matter of curiosity and knowledge of the business I’m engaged in. Knowing is better than not knowing.”