In the first part of this article, I gave a brief overview of the issue of how to classify rideshare drivers. Some want to be employees, and others want to be contractors. Then, I dove deep into the reasons someone would want to be an employee.
In this second part, I’m going to explore the reasons some drivers want to be contractors, and then I’m going to talk about the effects rideshare has on the rest of us, and why the whole industry has an unsure future. Dealing with all of this requires a flexible approach and not one-size-fits-all solutions that end up fitting none.
Why Some Drivers Want To Be Contractors
In part 1, I laid out all of the things that make life not only hard, but sometimes almost impossible for rideshare drivers. Making drivers employees would end what I call “shall issue” employment, and limit the number of drivers on the streets, which would lead to the companies being able to give the drivers things like minimum wage, medical benefits, and maybe even paid sick leave. Obviously, drivers would be better off, right?
It turns out that not all drivers agree because not all rideshare drivers are the same. The awful things I described in Part 1 mostly apply to people who drive for these services full-time. If you drive full-time, you’re out there both during the busy times and the slow times, and on bad weeks where the bad times outweigh the good, the situation gets bleak fast.
Not all drivers are full-timers though. There are many people who work a normal 9-5 job or work full-time in some other form of self employment who do Uber and Lyft on the side.
For some, it’s just for extra spending money. The main job covers their bills, but they want to save up some extra money for vacations, luxury goods, or just so they can go party next weekend. They tend to only go out and drive on the busiest times, like Friday and Saturday nights, or during rush hours. There are also times when airports tend to be busy, and the part-timers show up for that to get a crack at getting a long, long drive that nets them $50-200 all at once.
I also met a lot of retirees who were out doing Uber and Lyft part time. They couldn’t get a traditional job because nobody wants to hire old people outside of the career they’re collecting a pension on, and retirement was either not financially great, boring, or both. Some men just wanted to get away from the “old ball and chain” for a few hours. One man showed us younger drivers a photo album he carries around with him, with pictures of his wife and him when they were younger, but now she’s in a nursing home with dementia and he goes out to get his mind off things and save up money for fishing trips.
I also came across a fair number of car enthusiasts. To afford the car they wanted, they drive it on Uber part time to make a payment they couldn’t afford otherwise. Working a couple of weekends a month let people get their hands on everything from a Dodge Charger to a four-wheel-drive truck to a Tesla Model X to enjoy for the rest of the month.
All of these part timers are afraid that the bonus pay for the limited times that they tend to work might go away if Uber and Lyft have to make everybody an employee. Some, especially the retirees and non-passing transgender drivers, are afraid that they just won’t be wanted anymore if it became a normal job.
There are also important tax benefits to being self-employed. Being able to write off vehicle expenses is a big one that keeps the tax man away. Unless Uber were to supply vehicles to employee drivers, they’d lose out on a big tax saving opportunity.
The Effect On The Rest Of Us
One thing I don’t see discussed enough is how this debate affects the rest of us.
Floods of rideshare drivers can make congestion much worse in cities, for one. When many cities (especially pre-pandemic) were trying to get people to switch to public transit, rideshare gave people another option that they really liked. When some cities tried to kick rideshare companies out, people in the city would get angry, so rideshare stayed. Other options, like taking the bus, the train, or riding a bike just aren’t as attractive when you can get a car to pick you up in 5 minutes, and when those cars must circle nearby to avoid paying for parking in downtown areas, the effect on congestion is much worse.
Pollution is also a problem. Rideshare drivers don’t tend to adopt electric vehicles, but love hybrids. Why? Because time is money. If you’re spending time charging instead of driving, you’re not getting paid. Hybrids let the drivers save money on gas while not incurring the monetary loss that comes with charging time. Unless cities and rideshare companies come up with good ways to incentivize switching to an EV, drivers just aren’t going to do it.
When the influx of new drivers crowds the streets, cities are also less able to safely make infrastructure changes that could make things safer for cyclists and pedestrians. When walking is inconvenient and cycling feels unsafe, it’s a lot easier to just open up the Uber app.
An Unsure Future Requires Flexibility On All This
Truth be told, we aren’t sure that rideshare drivers will have any driving to do in 5-10 years. Why? They’ll probably be displaced by autonomous vehicles of some kind. There will always be customers who want a human driver, but when you whip open the Uber app and see that the human driver costs an extra $20, and all of your friends have had great rides on the Tesla Robotaxi app that’s even cheaper, there’s going to be very little left for the humans.
Plus, if you pay a little extra, the Tesla app can bring you a car with a humanoid robot who can get out with you and help you carry groceries, or help you with that loneliness in some way or another. All the human Uber option can give you is a 350-pound middle-aged man who isn’t great at personal hygiene, keeps looking at your butt, and wants a tip for helping carry your stuff while he makes you feel uncomfortable.
Looking at this future, it’s hard to not see this debate about employee vs contractor as anything but rearranging the deckchairs on the Titanic. It doesn’t matter how perfect you get things. The whole ship is already sinking.
While it sinks, flexibility is key. Not every driver and not every city will have the same needs here, and those needs will constantly change. Giving drivers a choice on what type of relationship they want with Uber and Lyft would be a good start, but the relationships these companies and the drivers have with the cities they work in is also going to require flexibility.