Automotive Blogs

Uber, Lyft: No Partitions, No Testing, No Profits, No Shame

by Roger Lanctot | Nov 12, 2020

Of all of the voluminous reporting on the mobility sector generally and ride hailing in particular most shocking is the lack of coverage of driver and passenger infection rates.  There is the odd report, here and there, of drivers becoming infected or dying or of ride hailing companies supporting customer tracking but nothing on comprehensive testing of these vulnerable workers.

Uber and Lyft have reported upwards of 40% reductions in year-over-year ride hailing business, a decline that is largely attributable to the onset of the COVID-19 pandemic. Both companies have gotten a post-Pfizer-vaccine announcement bump in their stock prices, but the latest spike in coronavirus infections and fatalities continues to cast a shadow on their operations.

Both companies, and their global rivals, have shifted gears to focus on food and product delivery services or the integration of car rental or scooter and bike sharing partnerships and operations in a bid to shore up revenue growth. But those revenue gains have failed to replace the frothy growth that originally propelled both organization's public stock offerings and early venture investments.

The various business innovations and expansions have had the effect of flattening the downward slope of declining revenues but have come at the expense of profits. Both companies – and their global rivals – also continue to tout their passenger and driver protection measures during the pandemic including Uber’s no-mask-no-drive policy and Lyft’s strenuous sanitation measures.

In the wake of California voters passing Proposition 22 both Uber and Lyft are also talking up their plans to offer their drivers broader health insurance options – details to be determined. What neither of these organizations are doing is providing a robust testing regime for drivers.

Many Uber and Lyft drivers will never return to these platforms while the COVID-19 pandemic persists in the U.S. and elsewhere around the world. In fact, many passengers can be expected to eschew ride hailing indefinitely as well.

Surveys conducted by Strategy Analytics and multiple other market research organizations and consultancies have shown that potential passengers are returning to the use of personally owned vehicles and even avoiding public transit. Ride hailing - previously considered a convenient, inexpensive and luxury service - has fallen into disfavor.

Lyft, at least, has made partitions available to its drivers – who must install these partitions on their own. Uber, in contrast, has neither acknowledged the efficacy of in-vehicle partitions to protect drivers and passengers nor made them available.

Uber has announced charging station discounts in partnership with EVgo for Uber drivers who drive EVs on the platform - but no partitions.

The Los Angeles Times reported the fate of one Uber driver prior to the vote on Proposition 22 last week:

https://www.latimes.com/business/technology/story/2020-11-01/prop-22-uber-driver-covid-19-death-benefits-workers-comp

“Khaled Zayyid worked long days, driving as much as 80 hours a week for Uber, to provide for his family. When he died in a Riverside County hospital in July of complications from COVID-19, his wife and children were left without a breadwinner. Reeling from grief, they were left to grapple with the nation’s worst economic downturn since the Great Depression.

“Then they applied to the state workers’ compensation program for death benefits — and got nothing.

“The 56-year-old Zayyid had taken a hiatus from work when pandemic stay-at-home orders took effect. But expenses piled up. One morning in June, Zayyid packed a cooler with a few Diet Cokes and his diabetes medication and went back to driving full time.

“He came home with stories of customers who jumped into the car bare-faced and refused when he offered masks from his personal stash. His children begged him to return to spending his days at their house in suburban Corona, but the family’s savings had dwindled and federal stimulus money had run out. He felt he had no choice.

“About a week later he came home early, exhausted and sweating. Zayyid said he felt cold, he felt hot, he couldn’t breathe. He was buried on a sweltering day in July, relatives lined up in cars by the cemetery to pay their respects.

“Through the state-administered workers’ compensation program — created to provide wage replacement and medical benefits to workers who suffer job-related injuries or illnesses — the family might be eligible for at least $320,000 in death benefits, according to a lawyer the Zayyids consulted. “Given that his wife, Lamis, and the two of their children who are still teenagers had been dependent on Zayyid’s earnings, the lawyer said the family might even be eligible for additional hundreds of thousands of dollars over the next few years.

“Still numb from the loss, the Zayyids filed a workers’ compensation claim. But the claim was shut down. A letter dated Sept. 30 said benefits were denied because Khaled Zayyid had been an independent contractor and never an Uber employee.

“As part of Proposition 22, one of the highest-profile measures on Tuesday’s ballot, Californians will decide what should happen to families like the Zayyids.”

Needless to say, California voters passed Proposition 22 exempting Uber, Lyft, Doordash, and other app-based transportation services from the requirements of AB5. It remains to be seen how “generous” Uber and Lyft will be in facilitating access to the medical, disability, and life insurance benefits taken for granted by most full-time employees.

But providing access to insurance (i.e. not paying for it) during a pandemic is not enough for employers that are routinely putting their “independent contractors” at risk. Yet again, during an important earnings calls last week and this week, Uber and Lyft have failed to come to grips with their responsibility to protect their drivers and passengers.

A minimum requirement for legally operating during the current pandemic ought to include in-vehicle partitions – provided free-of-charge to drivers by Uber and Lyft with installation also provided in partnership with car dealers or other service organizations – and regular driver testing. In fact, the results of the latest driver tests should be visible to potential passengers in the apps.

Anything less than these minimalist measures is criminal and ought to be subject to sanction. Yet, for some reason, neither the press, nor financial analysts, nor legislators, nor regulators have stepped forward to measure the impact of these operators on the spread of the coronavirus or to assess the health of drivers.  For shame.

Previous Post: Uber's Proposition 22 Movement Must be Stopped | Next Post: DoorDash IPO Spins COVID-19 Impact

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