As Uber, Lyft IPOs prepare to mint millionaires, drivers say their pay is going down

SAN FRANCISCO — When Elias Da Silva first started driving for Uber and Lyft three years ago, he could make $250 within eight or nine hours of …

SAN FRANCISCO — When Elias Da Silva first started driving for Uber and Lyft three years ago, he could make $250 within eight or nine hours of driving. Now, he said, it takes him 12 to 14 hours to earn the same pay.

David Williams, who lives in Sacramento but spends his weekends driving for Lyft in San Francisco, said he’s seen his earnings drop over the last year by roughly one-fourth of what he was making when he started.

And Fnu, an Indonesian immigrant who would not give his last name for fear of losing his job, said he used to get bonuses of $500 or $600 per week from Uber for hitting a certain number of rides, but that figure has now dropped to around $200.

All three drivers spend their nights sleeping in their cars in a supermarket parking lot in San Francisco, along with roughly two dozen other Lyft and Uber drivers.

As Uber’s stock hits the market on Friday, following Lyft’s initial public offering in March, drivers for both companies say they have been seeing their own earnings fall. In the fiercely competitive ride-hailing market, both companies are battling to keep fares low enough to woo riders and repayment rates high enough to entice drivers, all while returning a profit to investors. Bonuses change from city to city and from week to week, increasing in areas where Uber needs to attract more drivers, a company representative said.

But the result is a maddening game of juggling incentives and trade-offs that often leaves drivers without consistent pay and wondering just how much they’ll end up taking home that day, said Jonathan Nalvarte, who lives in a suburb outside of Los Angeles and drives for Lyft in San Francisco for a week or two at a time. Unlike Da Silva and Fnu, Nalvarte didn’t participate in the international strike on Wednesday, when thousands of drivers turned off their ride-hailing apps to protest low and inconsistent wages, poor working conditions, and the lack of health care and other employee benefits, among other concerns.

Some, like Williams, work in the city only on weekends, while others, like Fnu, who lives in Los Angeles, come for one to two months at a time. Da Silva moved to San Francisco from Los Angeles about six months ago, he said, in search of higher-paying rides. But he can’t afford an apartment in the city, so he beds down every night in his white sedan.

“I came up here because they were paying more money to drive here, and the bonuses were better,” Da Silva said. “But now, they’ve cut the bonuses, too. So it’s hard to make a living.”

The strike was timed in advance of Uber’s initial public offering on Friday and followed similar actions before Lyft’s stock hit the market in March. Uber said Thursday it would set its shares at $45 to start, equal to a valuation of roughly $82 billion, but the company’s shares opened lower than that Friday. Lyft’s stock initially traded at more than $87 per share, but had fallen to $55 as of Friday morning.

Bothcompanies, in public filings, acknowledged the necessary role drivers play in keeping their businesses afloat. Though the companies depend on drivers remaining independent contractors — who are eligible for health care benefits, overtime pay and paid time off — the companies acknowledged that, without maintaining and attracting new drivers, their businesses could easily fail.

Both offered bonuses to drivers ahead of their IPOs. Lyft offered rewards of $100 to $10,000 depending on how many rides drivers have under their belts, while Uber offered bonuses of $500 to $40,000 under a similar schema.

But, placating workers with a one-time cash handout is not the same as consistent, meaningful pay and benefits, said Shona Clarkson, an organizer with Gig Workers Rising, a community of app and platform workers seeking to improve working conditions among on-demand laborers, categories that include Lyft and Uber drivers, but also other app-based platforms, such as Sittercity or Care.com, TaskRabbit or Handy, DoorDash, Instacart or GrubHub.

“Drivers, like all of us, need to have a job that helps them pay the bills and that leaves them time with their families and doesn’t leave them on their own if they are injured or sick,” she said. “Uber’s unstable business model, in which executives are pocketing millions while drivers are sleeping in their cars and eating from food banks, can’t last.”

Lyft reset its payment rates last year in an effort to make wages more consistent and phased out surge-pricing incentives, replacing it with ones based on geographic hot spots, a company representative said. Drivers said both decisions have so far resulted in lower pay.

Lyft said its drivers earn an average of $20 per hour, while a spokesman for Uber cited two studies showing its drivers make between $18.65 and $21.07 per hour. But those hourly rates don’t account for expenses, such as car payments or rentals, gas, cleaning supplies, oil changes and other maintenance costs, not to mention health care and lost wages from taking unpaid time off. Drivers said those costs eat up about half their earnings.

For Sam Tan, a San Francisco resident who drives for Uber and Lyft in his spare time, the job is a great way to supplement his full-time work as an auto mechanic.

“But if you’re trying to make a living,” he said, “it’s really tough.”

Drivers who have other options say they are looking to get out of the ride-hailing business as soon as possible. Williams is working toward getting his commercial license to drive big-rig trucks, he said. Nalvarte is hoping it won’t be long before he can finish the classes he need to get his electrician’s license.

“And then I’m done with driving,” he said.

But for others, like Fnu, getting out of the ride-hailing industry is more difficult. Fnu worked in restaurants for nearly a decade before driving for Uber and Lyft, the only two types of jobs he’s had in this country. He’s not eager to go back to restaurant work, but isn’t sure what other industry would hire him.

Da Silva had been a taxi driver before Uber and Lyft came along and he saw his customer base dwindle. When he was a taxi driver, Da Silva was able to afford a small apartment in Los Angeles, he said. He worked around eight to 10 hours each day, five days a week. Now driving for Uber and Lyft, Da Silva says he hasn’t had a single day off in five months. He starts driving every morning around 8 a.m. and finishes close to midnight.

“I don’t have a life anymore,” he said. “But what can I do?”

Then he added: “Maybe go to New York City. I read on Facebook they pay you $1 per mile out there. Here, they pay you 68 cents.”

“Maybe I can make more money for less hours,” he said.

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Award-winning Minneapolis writer recounts harrowing Lyft ride in viral tweets

So when she arrived in Houston on Sunday night, she hailed a Lyft to get to her hotel. (Mass transit, she said, would have taken more than two hours.).

Kelly Barnhill. Star Tribune file photo by Anthony Souffle

It has been common enough for Kelly Barnhill to use a ride-share app. As a notable children’s author (the Minneapolis writer won the Newbery Award in 2017), she does a lot of traveling and speaking, and a lot of speaking at schools. Lyft and Uber are inexpensive, reliable ways to get around in a strange town.

So when she arrived in Houston on Sunday night, she hailed a Lyft to get to her hotel. (Mass transit, she said, would have taken more than two hours.)

“He was a personable fellow—youngish, handsome, smiled easily,” she wrote in a harrowing series of tweets yesterday describing what became a terrifying ride.

Barnhill tells the story better than I can, so you should check out her tweet thread. But suffice it to say that the youngish and personable driver took her the opposite way from her hotel, out into the countryside, where, as the evening grew dark, they were out of cell range.

And then the driver told her she had pretty eyes.

“According to Lyft’s website, what one is supposed to do in these situations is demand to be let off,” Barnhill writes. “Apparently there is a call for help button too, but that doesn’t help you if your phone doesn’t work. And I can’t see how it would help while going 90 on a lonely Texas road.”

In the end, perhaps because of her endless stream of peppy, nervous talk (punctuated with frequent pointed reminders to the Lyft driver of how her cell phone is loaded with security features and tracks and records her everywhere she goes), the driver turned around. Headed into Houston. The 15-minute $30 drive turned into an hour-long $90 drive.

She doesn’t know, now, if the driver was a sexual predator, or if he was simply trying to run up the Lyft charge. It hardly matters. Complaints to Lyft initially got her charge bumped back down to the original $30, and only after days did they erase the charge and fire the driver. (We’ve reached out to Lyft but haven’t received an immediate comment.)

Why does this matter, a scary enough ride that ended safely?

Because it has implications for authors—children’s authors in particular, Barnhill told me later.

“For a lot of us, school visits are a huge portion of our income,” she said. “And most of us use ride-sharing to get around in strange cities. When I first vaguely tweeted this on Monday morning, the people who responded were almost exclusively female children’s authors who all have felt unsafe at one point or another.”

Barnhill’s publisher, Algonquin Books of Chapel Hill, will hire cars for her in the future when she is on book tour. “But for school visits,” she said, “I don’t know what I’ll do.”

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Stocks making the biggest moves midday: Uber, Apple, Lyft, Caterpillar & more

Lyft– Shares of ride-sharing company tanked as much as 7% leading up to and after Uber’s initial public offering Friday. Lyft and Uber are the two most …

Check out the companies making headlines in midday trade Friday:

Uber– Shares of Uber were mostly down during its first hour of trading after going public on the New York Stock Exchange on Friday. Uber opened at $42 a share, lower than the $45 it was priced at on Thursday night.

Lyft– Shares of ride-sharing company tanked as much as 7% leading up to and after Uber’s initial public offering Friday. Lyft and Uber are the two most dominant companies in the ride sharing business. Lyft’s stock is down about 30% since its IPO at the end of March.

Apple– Apple’s stock fell 3% and was down as much as 9% for the week on Friday. The iPhone maker is viewed as particularly vulnerable to the recent escalation in the trade war given its dependence on China for production and sales.

Caterpillar– Shares of the construction company fell 2% amid the escalated trade tensions with China.

Marriott– Shares of the hotel company fell 5% following mixed first-quarter earnings released Friday. Marriott reported adjusted earnings per share of $1.41, beating the estimated $1.34, according to Refinitiv. Revenue was $5.01 billion, missing the expected $5.11 billion.

Yelp- Shares of recommendation website Yelp plummeted 13% Friday after the company gave weak second-quarter guidance a day earlier. Yelp said for the second quarter it estimates revenue will increase between 4% and 6%, lower than the expected increase of 6.6%, per Refinitiv.

Booking Holdings– The booking company jumped about 3% despite missing on the top and bottom lines in its first-quarter earnings after the bell Thursday. Booking Holdings reported earnings per share of $11.17 on revenue of of $2.84 billion. Wall Street estimated earnings per share of $11.27 on revenue of $2.93 billion, according to Refinitiv.

Zillow– Shares of the home-finder website surged 6% after posting better-than-expected first-quarter earnings Thursday. Zillow reported a loss of 33 cents per share, compared to the loss of 35 cents per share analysts were expecting per Refinitiv.

News Corp.- Shares jumped 4% on Friday after the company reported a surprise quarterly profit in its third quarter, driven by growth in book publishing. The company reported earnings per share of 4 cents on revenue of $2.46 billion. Wall Street estimated earnings per share of 0 cents on revenue of $2.51 billion, according to Refinitiv.

Equifax– Shares of Equifax fell 2% after the company missed on revenue in its first-quarter results. Revenue was $846.1 million, lower than the expected $848.9 million, according to Refinitiv. Earnings per share came in line with estimates at $1.20 per share.

—CNBC’s Matt Lavietescontributed to this report.

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Lyft hits record low as Uber slumps in Wall Street debut

SAN FRANCISCO (Reuters) – Lyft Inc’s stock slumped to a record low on Friday as Uber Technologies, another company hemorrhaging billions of …

FILE PHOTO: Uber and Lyft stickers are seen on a car windscreen as protesters join an Uber drivers’ strike for higher wages at LAX airport in Los Angeles, California, U.S., May 8, 2019. REUTERS/Lucy Nicholson

SAN FRANCISCO (Reuters) – Lyft Inc’s stock slumped to a record low on Friday as Uber Technologies, another company hemorrhaging billions of dollars, fell in its Wall Street debut.

Uber fell 8% from the $45 price set in its IPO late on Thursday, which valued the company at roughly $82 billion, just above the $76 billion valuation it attained in its last private funding round

Smaller Lyft saw its shares drop 6% to $%51.79. Lyft’s 27% slump from the price in its March 28 IPO, and Uber’s drop immediately at the start of trading in its shares, underscore many investors’ trepidation about the two ride-hailing companies that have not said when they will become profitable.

“Uber is considered the leader and the one in the strongest market position. If investors are not getting behind it on the lower valuation, that creates a challenge for the smaller Lyft in investors’ minds,” said Wedbush analyst Ygal Arounian.

Uber lost $3 billion in 2018 from operations, while Lyft lost $1.1 billion in the March quarter of 2019.

Lyft’s falling stock this week put pressure on Uber as it finalized the price of the most anticipated IPO since Facebook’s debut in 2012.

Reporting by Noel Randewich, additional reporting by Shariq Khan in Bengaluru, Editing by Chizu Nomiyama

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Lyft hits record low as Uber slumps in Wall Street debut

By Noel Randewich. SAN FRANCISCO (Reuters) – Lyft Inc’s stock slumped to a record low on Friday as Uber Technologies, another company …

By Noel Randewich

SAN FRANCISCO (Reuters) – Lyft Inc’s stock slumped to a record low on Friday as Uber Technologies, another company hemorrhaging billions of dollars, fell in its Wall Street debut.

Uber fell 8% from the $45 price set in its IPO late on Thursday, which valued the company at roughly $82 billion, just above the $76 billion valuation it attained in its last private funding round

Smaller Lyft saw its shares drop 6% to $%51.79. Lyft’s 27% slump from the price in its March 28 IPO, and Uber’s drop immediately at the start of trading in its shares, underscore many investors’ trepidation about the two ride-hailing companies that have not said when they will become profitable.

“Uber is considered the leader and the one in the strongest market position. If investors are not getting behind it on the lower valuation, that creates a challenge for the smaller Lyft in investors’ minds,” said Wedbush analyst Ygal Arounian.

Uber lost $3 billion in 2018 from operations, while Lyft lost $1.1 billion in the March quarter of 2019.

Lyft’s falling stock this week put pressure on Uber as it finalized the price of the most anticipated IPO since Facebook’s debut in 2012.

(Reporting by Noel Randewich, additional reporting by Shariq Khan in Bengaluru, Editing by Chizu Nomiyama)

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