The Transportation Network Company (TNC) is an app-based rideshare industry, the details of which are still being defined. Rideshare companies such as Lyft, or Uber, as well as drivers, and customers, all have expectations and responsibilities in order for the services to be sustained. This requires that driver’s wage rates be 75% of the money collected from each of the customers for a completed ride, and the Rideshare companies receiving 25% of the total charge to the customer.
A “transportation network company” is a company, corporation, partnership, trust, association, sole proprietorship, or similar organization that uses a digital network to connect riders to drivers to provide prearranged rides. A “prearranged ride” is the transportation by a driver of a rider that (1) begins when the driver accepts a request from the rider through a digital network, (2) continues while the driver transports the rider, and (3) ends when the last rider exits the vehicle. A “rider” is an individual or individuals who use a digital network to connect to a driver and receive a prearranged ride between points the individual or individuals choose.
Setting the percentage cap at 25% on app-based Rideshare companies would allow Rideshare Drivers to be classified as Independent Contractors. Providing Rideshare Drivers with some protections not only saves jobs, it also provides an equitable system for drivers providing the service. App-based rideshare drivers would benefit from three things: cap the Rideshare company’s fee-per-fare at 25%; protect workers who organize from intimidation or retaliation; and require that company data collection and reporting become public.
Flex hours and working multiple platforms, still remains possible for the Rideshare Drivers under this plan.
Uber argues that drivers are Independent Contractors. This was recently contested by the AB5 law in California. November 3rd, 2020 Proposition 22 exempted app-based gig companies from the new AB5 employment law. Proposition 22 cost Uber just over $70 Million to get passed, with other states lining up to try to eliminate the right to be an Independent Contractor. Rideshare companies taking a straight 25% for being a “Software as a Service” (SaaS) business would clearly show that Rideshare Drivers are Independent Contractors. I think Zoe Tucker’s National Employment Law Project conducted at Yale Law School illustrates this well, by saying that Uber can’t have it both ways:
“Workers in these companies are providing the core work…the very essence of the employment relationship. Yet, while claiming that workers are independent contractors, the companies try to have it both ways. They often manage the workers as if they were employees, unilaterally setting rates for services, dictating how the services are provided, and screening, testing, training, evaluating, promoting, and disciplining workers based on the standards the companies set.”
Insurance: Under this plan Uber would not be able to pay a driver’s insurance; however, they are not allowed to pay a driver’s insurance now. Being independent contractor’s means Rideshare companies can’t provide insurance, same as it has been to date. They could establish a system where total hours on platform each month would determine the tier in which your monthly bonus (stipend) would pay the difference between your already paid regular insurance and commercial insurance. Another big problem right now in the rideshare industry is that drivers are “encouraged” to have commercial insurance but not required. Vehicle inspections, medical exams, proof of registration and insurance, and proof of valid license are required; having the insurance needed to provide rideshare services are not required.
UBER benefits: End to the lawsuits, battling state-by-state over independent contractor vs. employee status, establishing true independent contractor status by the new federal test which, unlike California’s “ABC” test, allows a more fair way of testing a person’s employment status.
This “Rideshare Manifesto” may seem like it is restricting the Rideshare Company’s ability to earn in a free market America; when actually it would do the opposite and create profit for the Rideshare industry. Rideshare companies have been putting off the inevitable for years: raising prices. Instead, they have chosen to subsidize losses in order to undercut their competitors. The bottom line here is these companies must start making a profit, without a path to profitability for the Rideshare companies; there will never be positive change for the Drivers performing the work.
Connecticut State Rep. Joe Poletta said “I think it’s going to result in higher fares”.
Correct, without higher fares there is no way for the Rideshare companies, or the Drivers, to optimize profits on the platforms. That is something that everyone on all sides of this agrees on. Rates must rise, people will still use the platform, as even the riders know rates are low.
*IF YOU THINK ALL MANIFESTO’s ELUDE TO SOMETHING BAD, REMEMBER, THE DECLARATION OF INDEPENDENCE IS A MANIFESTO*
Questions, Comments, Concerns?
*please post them below*