Since day 1, Lyft has promoted itself as being the driver-friendly alternative. In the last few years, we have seen rates dropped, Express rentals jump from $30 to $250+ a week and today, during a pandemic with unemployment levels at an all-time high, Lyft decided to pull out of California leaving tens of thousands of drivers without a way to make money.
“As a result of a court order, we’ll be suspending rideshare throughout California at 11:59 PM PT on Thursday, August 20,” the company said in an update on its website. “We did everything we could to prevent this from happening and keep Lyft available for you, but it wasn’t possible to overhaul our business model and operations in ten days.”
Sure, this was in response to AB-5 and drivers wanting to be classified as employees, but we have to think about what got us here in the first place.
Over the years, both Uber and Lyft have dropped their rates over and over again while raising fees to operate on their platform. As Independent Contractors, we have no control over the price. As an employee, at least we have some protections. Back in 2014, this was roughly $1.60/mile. Now? 60 cents a mile. We also saw an even split of 80/20 from earnings. (This was especially helpful during surge pricing, now we get a flat rate, usually less than $5 extra.
Another sticky point are Lyft rentals aka Express drive, that started off as free, (after x amount of rides) and eventually increased to $250+ a week. As an added bonus, Lyft express drivers do not see 60 cents a mile, rather they are paid about 50 cents a mile. How does that make sense?
While it is very likely we will see the same from Uber, as they have threatened to pull out of California as well, Lyft did pull out first. We saw this back in 2015 when the City of Houston announced permitting for Uber/Lyft drivers. Uber in all fairness ended up staying behind. Lyft abandoned its Houston drivers for several years.
There is a bit of silver lining though of Lyft pulling out:
Back in May 2016, when Uber and Lyft left Austin, about half a dozen rideshare companies popped up. While most of them did not work as flawlessly as Uber and Lyft, drivers did see an instant pay increase from each and every one of them since Uber and Lyft no longer controlled the market. I suspect California, especially with all the tech startups will experience the same, if not on a larger scale. Unfortunately, Austin drivers decided to come back to Uber and Lyft the day they came back and these companies failed. Hopefully, California drivers are a bit smarter and remember how these companies betrayed them.
It’s amazing how quickly drivers forget.