Washington, D.C. — A new report released today by The Transportation Trades Department, AFL-CIO (TTD), a coalition of 33 unions, explores how features that have driven explosive growth and popularity in the ride-hailing industry—relatively affordable and convenient service—are based on a business model that exploits workers and undermines the goals of public transportation.
The costs of doing business: Why lawmakers must hold the ride-hailing industry accountable as they undermine their workers and play by their own rules comes as lawmakers discuss the future of Transportation Network Companies at a hearing today by the Transportation and Infrastructure Subcommittee on Highways and Transit. TTD President Larry Willis will testify during the hearing as a witness.
Willis’ testimony will focus on the report’s findings that the business model of companies like Uber, Lyft, and Via artificially drive down prices by classifying drivers as independent contractors, trapping them in low-wage, no-benefit positions, avoiding regulation, and relying on massive subsidies from private capital. Because those business practices have not translated into profit, ride-hailing companies are now seeking public funding to pad their losses.
“We welcome opportunities to work with any partners who advocate for innovation in public transportation services, but we expect those partners to subscribe to the promises that public transportation be equitable, accessible to all, affordable, safe and reliable,” Willis said. “We cannot stop Wall Street investors from pouring billions into these failing companies, but lawmakers can ensure the ride-hailing industry is not permitted to prey on public transportation and fleece the taxpayer.”
Other key takeaways from the report include:
- Many ride-hailing drivers make less than the minimum wage of the cities they work in, with some making as little as $3.75 per hour after expenses. By contrast, carefully crafted policy has long ensured the use of federal funding for public transportation comes with strong labor protections. Because of those policies, the average hourly wage for a bus driver is nearly $20 an hour and as high as $40 in some cities.
- While the federal government has invested millions into improving congestion and air quality, the ride-hailing industry has added nearly 6 billion miles of driving annually to nine of the largest cities in the U.S. Between 20 and 50 percent of that driving is without a passenger in the vehicle.
- Unlike public transportation, ride-hailing platforms are not, and never were, intended to serve all users equally. In Chicago, for example, one-way trips on Lyft and Uber averaged $15 more than the same trip on public transportation.
Uber, Lyft, and Via declined invitations from the subcommittee to participate in today’s hearing, which Willis called disappointing but not surprising.
“Rejection by Uber, Lyft, and Via to testify before lawmakers today demonstrates these companies’ disregard for Congressional oversight. It is also indicative of a broader pattern of behavior by the ride-hailing industry to sidestep any oversight or regulation that would provide accountability and ensure the wellbeing of drivers and passengers,” Willis said.
For questions about the report or to connect with the authors, contact Jonna Huseman at jonnah@ttd.org or 240-283-5470.