Expert: How higher pay for Uber, Lyft drivers can benefit riders
Seattle Mayor Jenny Durkan announced a large proposal to mandate a minimum wage for ride-share drivers Thursday. The measure will up the cost of rides by 51 cents each, but there are still plenty of benefits for both customers and drivers.
“I don’t remember the last time I got into an Uber or Lyft car and they offered me candy and water and all of those extra amenities, and frankly, it’s because the companies have lowered pay over time,” rideshare expert Harry Campbell told KIRO Radio’s Candy, Mike and Todd Show. “I think there’s a lot less incentive, and it’s a lot tougher for drivers to want to go above and beyond and build that Uber and Lyft brand when they don’t get to reap as much of the rewards.”
Campbell runs “The Rideshare Guy” blog and podcast, previously drove for both Uber and Lyft, and worked as an engineer to boot.
For him, an ideal proposal would pay drivers a fair wage, allow them the flexibility that walks hand-in-hand with the gig economy, and make it so prices for customers track with the profits Uber and Lyft pull in.
“I’ve worked for a number of companies not in the gig economy, and in my former career as an engineer … they would hire [full-time] W-2 employees, and they would also hire independent contractors, and they would literally be doing the same job, but with different requirements and restrictions,” he described.
He sees a similar way forward for companies like Uber and Lyft, by providing a safety net for those who want to be full-time employees with a guaranteed minimum wage, as well as flexibility for those who’d prefer not to be fully committed to driving.
As for paying drivers, Campbell largely sees that as a positive for one, simple reason: When your employees feel like they’re being fairly compensated, they’re more likely to pass that down onto their customers.
And even if the cost per ride does inevitably increase with higher pay for drivers, Campbell points out how that would represent the market as it always should have been.
“I think really what it boils down to is up until this point, (rideshare) companies have lost a lot of money, and passengers have gotten a great deal,” he said. “They really haven’t had to pay the true cost of all of these rides.”
As Uber and Lyft continue to become more profitable, that leaves more money to go around for drivers, especially if they become full-time employees.