Don’t expect the global Uber strike to change anything for drivers

Uber has always been disruptive, to steal a phrase from Silicon Valley, so it’s fitting that the days ahead of its much-anticipated IPO have been …

Uber has always been disruptive, to steal a phrase from Silicon Valley, so it’s fitting that the days ahead of its much-anticipated IPO have been disrupted by a global driver strike.

Drivers gathered on May 8 to protest Uber and its labor practices in cities from Los Angeles to Atlanta to New York in the US, and in countries from Brazil to Australia to the UK abroad. The strikes, which also targeted Lyft, to a lesser degree, garnered support from Democratic presidential candidates Bernie Sanders, Joe Biden, and Pete Buttigieg, among others, as well as Catastrophe co-star Rob Delaney. They also received extensive coverage online and on cable news.

How the demonstrations went, though, was less clear. The New York Post, for instance, reported yesterday that the strike in New York City was a “flop,” with cars plentiful and surge pricing scarce (the actual strike was scheduled for only two hours, from 7am to 9am local time). In San Francisco, a small crowd of drivers gathered outside Uber headquarters to demand better benefits and higher wages. “There are fewer people here than I think they anticipated,” the local CBS anchor admitted in a broadcast.

Uber didn’t respond to a request for comment. Lyft spokeswoman Chelsea Harrison said in an emailed statement: “Lyft drivers’ hourly earnings have increased 7% over the last two years… We’re constantly working to improve how we can best serve our driver community.”

Collective action has largely eluded drivers over Uber’s 10-year history. The company considers its drivers to be independent contractors, and in the US there are no collective bargaining rights afforded to contractors. Early attempts at strikes by driver groups were easily broken up by the company, which could pull one of its many levers—surge pricing, promotions, and so on—to ensure a critical mass of drivers stayed on the road. Uber has aggressively fought a first-of-its-kind 2015 law in Seattle that gave local drivers permission to unionize. It preempted a similar effort in New York City by sanctioning the Independent Drivers Guild (paywall), a non-union driver advocacy group that helped organize the May 8 strike.

I took an Uber on the day of the strike, which I suppose makes me a bad person, but I was in suburban Connecticut and needed a ride to the train station, and had no other options. My driver had briefly heard about the strike from a family member who saw it on TV, but didn’t know any details of where or when it was happening, or what was expected of him. We chatted about what it’s like driving for Uber and Lyft and how rising gas prices have depressed his wages. He said he hoped once Uber went public, it would finally give drivers the recognition they deserve.

While an IPO seems unlikely to make Uber change its ways, it’s also hard to see what a strike accomplishes. The public pressure may last a few days, but sooner or later people need to make money and get places, and Uber for all its faults helps them do that. The plight of contractors in the gig economy has also been a talking point for nearly a decade, and it will take more than some tweets from Democratic favorites to get anything substantial passed to improve their lot. The most successful efforts to help drivers have come from sustained local pressure, like the multi-year Independent Drivers Guild campaign in New York that led the city to implement the first-ever pay floor for drivers in February.

More to the point, Uber emerged not unscathed but intact from 2017, a year that revealed a culture of sexual harassment and irresponsible management and led to the ouster of Uber’s co-founder and former CEO, next to which yesterday’s strike looks like a comparative blip. Uber also counted 3.9 million drivers on its platform as of Dec. 31, 2018. Tens, even hundreds, of thousands of those drivers could go on strike before the impact was really felt.

Drivers are understandably angry that Uber employees are about to get rich while they get additional pennies per trip, yet the company is still hemorrhaging money, and it’s unclear whether Uber could pay drivers more even if it wanted to. After New York City’s driver pay rules took effect, the company paused new driver signups and said in an amended IPO filing that the rules “had a negative impact on our financial performance” in the first quarter. Uber has also basically admitted that it thinks of drivers as comparable to restaurant service workers, and that taking a bigger share of the fare is its path to profitability.

The tough reality is that Uber isn’t designed for workers to make good money, whatever it may have told them in the past, and it probably never was. Ahead of its IPO, no amount of striking will change that.

An earlier version of this post appeared in Oversharing, a newsletter about the sharing economy. Sign up for it here.

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Uber, Lyft drivers protest in Stamford, other cities

… drivers went to Uber offices at 470 West Ave., Stamford, this morning to hand-deliver a grievance letter addressed to Uber CEO Dara Khosrowshahi.
Uber drivers protest next to the Charging Bull statue in New York's financial district, Wednesday. The protests, which also took place in Stamford, arrived just ahead of Uber's initial public stock offering today. (AP)
Uber drivers protest next to the Charging Bull statue in New York’s financial district, Wednesday. The protests, which also took place in Stamford, arrived just ahead of Uber’s initial public stock offering today. (AP)

STAMFORD – Drivers for ride-hailing giants Uber and Lyft across the country including Connecticut turned off their apps to protest what they say are declining wages at a time when both companies are raking in billions of dollars from investors.

Demonstrations took place in 10 cities Wednesday, including Stamford, Chicago, Los Angeles, New York, San Francisco and Washington, as well as some European locations like London.

In Connecticut, it’s unclear how many drivers participated in the strike, but James Bhandary-Alexander, legal counsel for Connecticut Drivers United, said 30 drivers went to Uber offices at 470 West Ave., Stamford, this morning to hand-deliver a grievance letter addressed to Uber CEO Dara Khosrowshahi.

“They went to present the letter and someone from Uber talked to the drivers for a few minutes and said he was going to bring a supervisor down,” said Bhandary-Alexander. “Rather than send a manager down, they called the police.”

He said the police treated the drivers cordially, but added that “it was pretty outrageous because we were told to wait there. It’s kind of pathetic, because the whole point of the office is to be an interface between the company and the drivers.”

Uber said in a statement that it accepted similar letters at other sites around the country without incident and that a misunderstanding occurred at the Stamford offices. The company also said it did not see a significant impact on service reliability, including wait times, surges and the number of drivers online, during the day .

The protests arrive just ahead of Uber’s initial public stock offering Friday. Uber hopes to raise $9 billion and is expected to be valued at up to $91.5 billion.

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It’s not the first time drivers for ride-hailing apps have staged protests. Strikes were planned in several cities ahead of Lyft’s IPO last month, though the disruption to riders appeared to be minimal. More cities participated in Wednesday’s protest.

“Drivers built these billion dollar companies and it is just plain wrong that so many continue to be paid poverty wages while Silicon Valley investors get rich off their labor,” said Brendan Sexton, executive director of the Independent Drivers Guild, in a statement. “All drivers deserve fair pay.”

In Connecticut, State Senate Bill 989 would mandate that drivers keep 75 percent of all the money a rider pays an Uber driver. In a statement Wednesday, Uber said the bill’s passage would result in drivers paying an extra $4,500 per year in out-of-pocket insurance costs and fewer riders.

In New York, some drivers went offline between 7 a.m. and 9 a.m., though it was still easy to locate a driver Wednesday during rush hour near Wall Street in lower Manhattan.

Drivers in Los Angeles are participating in a 24-hour strike and picket line at Los Angeles International Airport.

Uber, in a prepared statement Wednesday, said it is constantly working to improve the working environment for drivers.

“Drivers are at the heart of our service – we can’t succeed without them – and thousands of people come into work at Uber every day focused on how to make their experience better, on and off the road.”

Lyft said its drivers’ hourly earnings have increased over the last two years, that 75% of its drivers work less than 10 hours per week to supplement existing jobs and that on average the company’s drivers earn over $20 an hour.

“We know that access to flexible, extra income makes a big difference for millions of people, and we’re constantly working to improve how we can best serve our driver community,” Lyft said.

In New York, striking drivers organized a caravan across the Brooklyn Bridge and are holding rallies outside Uber and Lyft offices in Queens.

Labor actions also took place in Atlanta, Boston, Philadelphia, San Diego.

“We’ll be meeting in the next few weeks to figure out what’s next,” said Bhandary-Alexander.

Associated Press contributed to this article.

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Aiming at Uber Black, Blade offers NY airport transfers via helicopter for $195

Blade’s most recent round of funding was led by Airbus SE, Tom Barrack’s Colony Capital Inc., and Kenneth Lerer’s Lerer Hippeau Ventures.
  • A Bell 407GX helicopter at the Blade Lounge West landing area in New York on May 7, 2019. Photo: Bloomberg Photo By Jeenah Moon / Bloomberg
    A Bell 407GX helicopter at the Blade Lounge West landing area in New York on May 7, 2019.
    A Bell 407GX helicopter at the Blade Lounge West landing area in New York on May 7, 2019.

    Photo: Bloomberg Photo By Jeenah Moon

Photo: Bloomberg Photo By Jeenah Moon
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A Bell 407GX helicopter at the Blade Lounge West landing area in New York on May 7, 2019.
A Bell 407GX helicopter at the Blade Lounge West landing area in New York on May 7, 2019.

Photo: Bloomberg Photo By Jeenah Moon

Aiming at Uber Black, Blade offers NY airport transfers via helicopter for $195
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It’s just enough time to mix a cocktail.

Helicopters have been whisking the wealthy from Manhattan to New York’s airports for decades. Now the ride costs as little as $195, and you can book it via a smartphone.

In 2014, when Rob Wiesenthal founded Blade Urban Air Mobility, a chopper ride to John F. Kennedy Airport-13 miles from Manhattan-started at $3,000, he says. Wiesenthal has been able to chop that price after finding efficiencies in fueling, equipment, and scheduling.

A new, efficient helicopter model from Bell Helicopter, one of the companies Blade uses to arrange its flights, is key to its continuous, lower-priced service.

“You used to have to charter an entire aircraft, and people were using the wrong aircraft for the mission-an expensive, gas-guzzling helicopter,” says Will Heyburn, head of corporate development at Blade. By increasing the number of people on each aircraft and operating only between the city and the airports, efficiency has improved steeply. ” We’re using the most fuel-efficient jet engine that Bell has available,” Heyburn says.

Getting to this price point took about five years. “We began chartering. Then we started testing specific days and times, and this is what was enabled by our partnership with Bell,” says Heyburn. “We’d been incrementally lowering the price and testing the way consumers want to fly. Everything came together at the right time.”

Blade has lowered the price without compromising safety, Wiesenthal says, and his company is the first to add continuous service between LaGuardia and Manhattan’s Wall Street Heliport, as well as Newark and the East 34th Street Heliport. The JFK service that Blade started in March will continue from the West 30th Street Heliport across from Hudson Yards. Blade sees those commutes as the pain points for its client base: Traveling from the East Side of Manhattan to Newark or from the West Side to an outer borough airport most often means battling maddening city traffic. Flights leave multiple times an hour.

“We’re seeing faster-than-expected adoption by people choosing to fly to the airport rather than driving,” Wiesenthal says. Over 75 percent of first-time customers have never flown in a helicopter before, and 22 percent of fliers to JFK have come back in the same month, according to Blade.

The regularly scheduled continuous service is significant, because it makes it easier to hop a ride or to be flexible in your timing. It also allows Blade to lower the price because, unlike charters, helicopters more reliably carry passengers in both directions, minimizing wasted resources.

“Everything else has been charters,” says Brian Tolbert, manager of the Downtown Manhattan Heliport, who started working in the chartered helicopter business in 1986. “Blade is the first continuously scheduled service.”

During rush hour, rides in Uber’s top-tier Black SUV service commonly exceed $200-and can take an hour, or even two.

The new service is “for someone who works in Midtown, has lunch at a great restaurant at Hudson Yards, and walks across the street at 1:30 p.m. and makes a 3:30 p.m. flight,” Wiesenthal suggests.

The average age of Blade’s clients is 38, and 55 percent of them are men; 95 percent of customers book on the mobile app.

“The biggest misconception is: This is not affordable for me,” says Wiesenthal. “We cut our teeth on the most demanding fliers,” he continues, although in three to five years, he’d consider lowering the price from $195 to the $70-to-$90 range.

Blade doesn’t own its helicopters. It partners with Airbus SE, Lockheed Martin Corp., and Bell Helicopter Textron Inc. to arrange flights through more than 30 aviation operators, which provide pilots. Flights depart every 20 minutes or so, from 7 a.m. to 7 p.m. weekdays, and on Sunday afternoons and evenings. If you show up early, you can be put on an earlier flight. If your intended plane flight is delayed, you’ll automatically be put on a new helicopter, free.

It flies the Bell 206L-4 single-engine helicopter, which has a better safety record than the average twin-engine helicopter, according to the company.

Flights to JFK land on Sheltair’s 4.5-acre plot on the loop of the main access road. Complimentary ground transportation in a black SUV to all commercial airline terminals is included. The farthest drive to a commercial terminal is American Airlines at Terminal 8, which takes three minutes, absent heavy traffic. For $150, an American Airlines representative will meet you after your helicopter arrives and transport you, via Cadillac, to expedited TSA screening; for $350 they’ll meet your plane and do the reverse, escorting you through baggage claim and onward to the helicopter.

Add $85 for flexible tickets, $75 weather insurance (for a cash refund, instead of a Blade credit), $85 for bags heavier than 20 pounds, $250 for luggage pickup up to two hours before your flights, $100 for meet and greet, and you’re easily nearing $800. But many business travelers don’t need such contingencies.

The JFK service breaks even for Blade when two to three people populate a flight that can accommodate six, which has been happening, Wiesenthal says. A potential competitor, Uber Inc., is working on a product called Uber Air with partners that include Bell Helicopter and Aurora Flight Sciences, a Boeing subsidiary.

“Dallas and Los Angeles will be the first to offer Uber Air flights, with the goal of beginning demonstrator flights in 2020 and commercial operations in 2023,” says Uber spokesman Matthew Wing. As for UberX, the company’s lowest-cost private car service, fares to the airport cost less than $200.

Blade’s most recent round of funding was led by Airbus SE, Tom Barrack’s Colony Capital Inc., and Kenneth Lerer’s Lerer Hippeau Ventures. Eric Schmidt, the former CEO of Alphabet Inc., Barry Diller, chairman and senior executive of IAC Inc., and David Zaslav, chairman and CEO of Discovery Networks, are also backers.

Such use of helicopters in New York dates from 1965, when they were used to circulate between the roof of the MetLife Building (then the Pan Am Building) and JFK’s Pan Am terminal, until 1968. It resumed briefly in 1977, until in May of that year a New York Airways helicopter blade broke off, killing three people waiting to board on the helipad, as well as a pedestrian on the street far below.

By 2010, helicopters were making 80,000 takeoffs from New York, according to the Economic Development Corp. Flash forward to now, when more than 160 million people a year go to and from airports surrounding the city. The average ground speed in New York over the past decade has plunged, from 11 mph to 7.8 mph. “That adds up,” Wiesenthal says.

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Global Drivers’ Strike Shows Tide May Be Shifting for Uber and Lyft

From 7 a.m. to 9 a.m. on Wednesday, Uber, Lyft, Juno, and Via drivers went on strike in New York City. Their work stoppage was one of several that …

Drivers and supporters protest against Uber and other ride-hailing companies near the Wall Street Charging Bull on May 8. Photo: Drew Angerer/Getty Images

From 7 to 9 a.m. on Wednesday, Uber, Lyft, Juno, and Via drivers went on strike in New York City. Their work stoppage was one of several that took place in major cities around the world. In a press release, members of the New York Taxi Workers Alliance complained of low pay and worsening work conditions. Syed Ali, identified by NYTWA as an Uber driver, said he’s striking because the company “has broken their promises to drivers time and again.” At first, he added, working for Uber had seemed like a promising gig. “But then Uber cut our rates and they tried to tell us we’d be earning more even though they paid us less. What kind of craziness is that?”

There’s data to back up the drivers’ claims. Last year, analysis from the JPMorgan Chase Institute found that drivers for Uber and Lyft make “less than half of what they did four years ago.” That decline may be attributable in part to a decline in the number of hours drivers work, but Uber has also reduced per-mile pay rates for drivers. As Vox reported in March, the company cut rates by 25 percent in Los Angeles County and certain areas of Orange County; at the time, drivers picketed the company’s offices in L.A.

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Breakingviews – Uber’s losses are nothing like young Amazon’s

Uber, led by Dara Khosrowshahi, is racking up tremendous losses. Its accumulated deficit since its founding in 2009 totaled $7.9 billion at the end of …

Uber sign is seen on the outside of their Greenlight Hub in the Brooklyn borough of New York, U.S., April 12, 2019. REUTERS/Shannon Stapleton

NEW YORK (Reuters Breakingviews) – Uber Technologies is no Amazon.com. Some of the ride-hailing firm’s boosters have pushed a comparison with the e-commerce giant in roadshow meetings for the company’s imminent initial public offering, according to news reports. The idea is that hefty losses now are laying the foundation for a future profit juggernaut. Instead of the income statement, though, investors should look at cash flow numbers.

Uber, led by Dara Khosrowshahi, is racking up tremendous losses. Its accumulated deficit since its founding in 2009 totaled $7.9 billion at the end of 2018. It estimates it lost another $1 billion in the first quarter this year. The hope is that subsidies to drivers and passengers help the company grow and dominate what could be a winner-take-most market. Once that happens, Uber will be able to raise prices and reduce incentives. And if and when autonomous vehicles arrive, eliminating drivers could result in hefty profit margins.

The Amazon comparison initially hangs together. It took Jeff Bezos’ firm some seven years to deliver its first profitable quarter, and more than a dozen years for accumulated earnings to wipe out earlier deficits.

Yet Amazon needed little outside funding. It raised less than $10 million initially and a bit over $50 million when it floated, plus nearly $2 billion in convertible debt during the dot-com boom. That’s a relatively light demand for capital. Bezos managed to finance most of his company’s growth with positive cash flow: Customers pay first, and Amazon can reimburse most vendors later. The firm’s operations threw off cash in its first quarter as a public company in 1997, and operating cash flow has been positive on an annual basis since 2002.

In contrast, Uber’s operations burned nearly $6 billion over the past three years, and there’s no reason to suspect that will change any time soon. Rivals such as Lyft are competing aggressively for market share. And hefty R&D expenditure, as well as expansion in new areas like meal delivery and freight, may accelerate Uber’s cash burn. It has plenty of funds on hand – more than $10 billion of net cash after the IPO, according to the latest draft prospectus. But in one important way the company’s voracious appetite for cash makes it almost the opposite of Amazon.

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