$90M Spent by Popular Ride Share and Food Delivery App Companies to Avoid Better Pay for Drivers
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Uber, Lyft, and Doordash…all familiar names to most Americans. The three have not only become household names because of the services their companies provide, but because they seem to be constantly in the news facing lawsuits from their drivers. Most recently, Uber, Lyft and Doordash are actively fighting against legal actions seeking better pay for their drivers. In fact, they will spend an estimated $90 million just to avoid paying their drivers higher wages.
The three companies, along with other gig companies, have spent months attempting to talk the California legislature out of passing a bill that would effectively strengthen the employment protections of their “drivers.” The bill is now on the verge of final passage with a solid endorsement from the governor. And the chance to talk the legislature over their way of thinking seems to have come and gone. In response, the three powerful gig companies have contributed $30 million each to support a ballot initiative protecting them from the requirement to classify their drivers as employees.
This makes the campaign one of the most expensive in the history of California, right behind the $105 million campaign by dialysis companies last year to beat Proposition 8 because it would have placed limits on how much they charge for their services. In comparison, supporters of the measure were only able to gather $20 million.
The action taken by Uber, Lyft and Doordash creates a virtual $90 million war chest and is another example of how the “big money” is usually not aligned with the interests of the ordinary citizen. This type of big spending is usually a bargain for the donors involved. They stand to gain a lot more from defeating this type of ballot measure that goes against their interests (or supporting the passage of a bill that enriches them) than they are required to spend to make a difference. The $30 million contributions per gig company seems far less substantial when compared to the annual revenues of the companies actively supporting the campaign.
Uber collected $15.7 billion in revenue in the second quarter (that ended June 30th).
Lyft collected $867.3 million in revenue in the second quarter (that ended June 30th).
Both the companies are losing significant revenue (Uber lost $5.2 billion and Lyft loses $644 million in the most recent quarter), but their losses would have been much more significant if they were required to cover the cost of their drivers’ fuel, vehicle maintenance, maintain workers compensation coverage, pay taxes, etc. These are type of expenses that would require reimbursement if the classification of their drivers were to leave them eligible for employment protections under FLSA.
If you have questions about unpaid overtime or if you need to find out how to file a California overtime lawsuit, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik and DeBlouw LLP today.
