Lyft share price up 2% while facing labor issues

The rideshare company's stock is up while addressing conflict with drivers.

Lyft logo after Lyft share price rises Source: Bloomberg

Lyft share price is up for the first time since launching its initial public offering (IPO) in late March. While the stock is finally rising after being a much-hyped 2019 stock, the rideshare company has recently had pay disputes with drivers.

Why did Lyft drivers go on strike?

Lyft drivers recently went on strike in Los Angeles to protest what they feel is unequal pay from the corporation. Lyft drivers are considered independent contractors, not salaried employees of the company. That distinction means that they can work any time they want or for rival companies like Uber. However, being an independent contractor also means that they’re not entitled to a minimum wage or overtime pay.

While Lyft was valued at $24 billion when its IPO launched, research showed that Lyft drivers make $210 a month on average. Many of the drivers work for at least 40 hours a day and pay for their own gas and car maintenance. One rideshare driver, Nicole Moore, said that it was unfair for workers to have to possibly have pay reductions while Lyft and Uber were going to be multi-billion dollar corporations.

‘We are an independent group of drivers, organizing ourselves, driver to driver, against the most powerful & wealthy tech companies in the world. Tech companies who are cutting our wages in order to win the millions of investors, on the threshold of their IPOs,’ said Moore.

How did Lyft respond to drivers on strike?

Lyft responded to the drivers by noting that they want to pay workers more, but the corporation isn’t profitable and will operate at a loss for a long time.

‘We have a history of net losses and we may not be able to achieve or maintain profitability in the future,’ said the company in its filing for an IPO.

Lyft also touts its option of offering stock options and cash bonuses to long-term drivers. The corporation will also open driver centers to help employees find low-cost car maintenance services. The company chief operating officer, (COO), Jon McNeil, said that customers, not the company, controls how much drivers are paid.

‘Raising prices doesn’t occur in a vacuum. We don’t set the price, the customer sets the price in terms of what they’re willing to pay for a ride. We feel like we really need to concentrate on what was under our control, which was how we can help drivers save on costs because that is another path to increasing their take-home pay,’ said McNeil.


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

See opportunity on a stock?

Don’t miss your chance. Try a risk-free trade in your demo account, and find out whether your hunch could have paid off.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance. Upgrade to a live account to take advantage.

  • Trade a wide range of popular global stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform, when it matters

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Bid
Offer
-
-
-
-
-
-
-
-
-
-
Bid
Offer
Bid
Offer
-
-
China 300
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.