Uber and Lyft Reveal Their Dark Side

uber

The distinctive pink mustache might bring a smile to the awaiting passenger, but the story behind the wheels is more involved than that. Lyft provides a far more reliable mode of transportation than buses or trains, and at a fraction of the cost of taxi cabs. Uber, a similar service, now operates in 128 cities in 37 different countries all around the globe, but these companies have been doing more than just revolutionizing public transit – Uber and Lyft slowly reveal their dark side as well.

Both companies operate by crowd-sourcing the taxi experience, doing away with dedicated drivers working a regular 9 to 5 job for a centralized cab company. Instead, anyone with a car, an iPhone, and a pink mustache can become a driver. When a request is placed via the proprietary App, it automatically gets dispatched to the closest available drivers in the area, who can then choose whether to take the order or not. The payment is done entirely electronically based on metrics such as the distance, and the drivers are not allowed to accept tips directly (which, as it turns out, may in some ways jeopardize the legality of the business). It is truly a brilliant idea that empowers and rewards the individual, with no messy middle men to deal with. Well, at least not directly – Uber and Lyft handle everything in the background, and take a chunk of the earnings.

It is no surprise, then, that Uber has been managing to double its revenue every six months and expand rapidly. The drivers love the flexibility, the passengers love the convenience, but more and more stories are cropping up showing that the service’s success may be due to cutting some corners. Serious corners.

The state of Virginia has recently issued a cease-and-desist against the company, claiming it does not adhere to the DMV regulations. While many rose an angry fist at the unfair state legislature, further interviews show that there might be some problems with Uber’s safety and personnel training. This is where Uber and Lyft truly reveal their dark.

As the New Yorker recently discovered, many of the drivers recruited for the UberX service in Austin, Texas were found through a simple Craiglist ad. Some explained their training was a brief forty five minute session, half of which consisted of filling out the necessary paperwork, not learning about the required protocols, laws, or liabilities. Few knew what to do in case of an accident, or who would even be responsible for it.

Uber might not always have the best relationships with its drivers either. Some have been displeased with the company dipping into their hard-earned gratuity, leading to a class action lawsuit in San Francisco. As a result, the company changed their terms, adding an arbitration clause preventing the drivers from joining together against it. A whole website, called Uber Lawsuit, has been set up to fight for the drivers’ rights.

What is even worse, the drivers operate for the company as independent contractors, meaning they are effectively self-employed and running their own business. Nasty tax surprises and complications aside, they are responsible for numerous costs Uber should be reimbursing them for (such as gas). But more importantly, it could significantly impact legal liabilities as well. In case of an accident or a lawsuit, the driver could potentially be held entirely responsible for all the damages and charges, absolving the company of any liability. Uber or Lyft might not even be require to assist their drivers with any reparations or legal costs, should such a case go to court.

There is a reason why men have created checks-and-balances and various regulatory bodies – to ensure the safety and fair treatment of its people. What these companies are doing, in a way, is circumventing the whole system. The immediate effect is the obvious convenience, but it could be laying out a framework for dangerous practices, and lack of accountability.

While Uber and Lyft reveal their dark side when these kind of problems crop up, it does not mean they are inherently a bad idea. The model employed by these companies is still fairly new – the concept of crowd-sourcing public services so directly has never been possible before, not until the advent of smart phones and fast easily accessible internet. It will take some time to really iron out all the kinks and get everything moving (well, driving) smoothly. Until then, it is best to keep these issues in mind and remain cautious when dealing with the service.

By Jakub Kasztalski

Sources
New York Times
ABC 7 News
Wall Street Journal
The New Yorker
UberLawsuit
SFGate

8 Responses to "Uber and Lyft Reveal Their Dark Side"

  1. Paul   June 9, 2014 at 6:15 pm

    Being an independent contractor means that a driver can work with all the rideshare companies at the same time, accepting whoever gives him a fare first, thus having access to more customers. The driver is an independent businessman paying a referral fee to these companies.

    Reply
  2. Jasmine. Schulz   June 9, 2014 at 12:51 pm

    Definitely did not thoroughly check facts. Lyft promises and has gone to court with every driver who was ticketed. Plus, Lyft drivers are insured up to 1 million dollars per incident by Lyft. Also, iPhone’s are only required- and provided- by Uber.there is an extensive background check done on all Lyft drivers, as well as motor vehicle checks and vehicle inspections.

    Reply
  3. David   June 9, 2014 at 12:41 pm

    $20 Dollars off your first UBER ride Code: tomjb0

    $25 Dollars off your first Lyft ride Code: DAVID6270

    Reply
  4. Kevin Williams   June 9, 2014 at 11:33 am

    I drive for Uber, Lyft, and Sidecar. This article is just chock full of errors.

    Reply
  5. Anon   June 9, 2014 at 10:28 am

    You might have bothered to do some fact-checking, Mr. Kasztalski, taxi drivers are (at least in SF) most definitely independent contractors, perhaps with the exception of drivers who own a medallion. Most drivers are not employed by the taxi companies. Same as Uber & Lyft.
    Maybe someone (not you) should look into the whole autonomous racket which SFO has set up to gouge money out of practically everyone who sets foot at SFO. And the City of SF allows and encourages it.
    Transportation providers already pay various safety fees, inspection fees, license fees, fees up the wazoo to various state and local agencies to operate. And I’m sure that many of them are totally necessary for the general public safety. Then SFO duplicates most of those fees and more to allow them to serve the airport.
    This is part of why the taxi drivers are so pissed. Their parent companies have to pay all sorts of regulatory fees while TNCs do not. The airport needs regulation.

    Reply
  6. Jackie O.   June 9, 2014 at 9:23 am

    This code will give you your first ride with LYFT for free: JACKIE787 (up to $25)
    This code will give you your first ride with UBER for free: roicj2 (up to $20)
    Just download the applications (UBER and LYFT) and type the code in before you request the first ride.

    Reply
  7. Jimbo   June 8, 2014 at 7:04 pm

    Everything referenced above is about Uber…why is this article about how both “Uber and Lyft reveal their dark side” when there are only examples provided for one company?

    Reply
  8. Cise   June 8, 2014 at 5:43 pm

    This code will make your first Lyft ride free, up to $25.00. Download the Lyft app. The code must be typed in before you click “Request Lyft”. Enter code: GP37TRRQSFCNPWE3 and enjoy your ride! http://www.lyft.com/invited/GP37TRRQSFCNPWE3

    Reply

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