Lyft share price up 2% while facing labor issues
The rideshare company's stock is up while addressing conflict with drivers.
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.
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