A ride sharing car with an Uber sticker on the rear window, turns south onto Market St. in downtown Toronto on Oct. 3 2018.Fred Lum/the Globe and Mail
Ah, the holidays. When everyone gets extra time to relax, visit and generally enjoy life – except for those who don’t.
A slew of undersung workers keeps Toronto running while the rest of us pause, from hotel cleaners, transit workers and emergency room staff, to cooks, servers and young journalists stuck with New Year’s Eve shifts (sob story: it happened to me).
High on the list are paid drivers, for whom the season means carting around joyous revellers while being either ignored or drunkenly yammered at. An etiquette review: Don’t squish in more people than there are seat belts, don’t ghost on a ride you’ve requested, and do your best to keep the particularly inebriated from barfing in the car.
And, above all else, don’t calculate the cost of getting from here to there without factoring in a tip.
Now, there’s myriad justifiable complaints with both traditional taxis and “ride-sharing” services (which provide rides for money, and don’t share anything).
Yes, it’s ridiculous that taxi drivers often still refuse to take payment by card, or charge extra to do so. Yes, summoning a random stranger with a few swipes still seems a bit sketchy, and having to request trunk space in a ride-hailing vehicle is annoying.
And indeed, map apps have resulted in a generation of drivers with no idea where they’re going, which can be genuinely dangerous. In March, a young ride-hailing passenger died in a highway crash; last week, city council voted to consider reinstituting mandatory driver-safety training that was eliminated in 2016.
I’m not saying drivers are superheroes, or even upstanding citizens. I’m saying times are tough and they deserve a tip.
By now, it’s clear that ride-hailing has severely damaged the livelihood of old-fashioned taxi drivers. In Toronto, owning a city-taxi plate used to provide a reasonable living and a bit of a retirement fund.
Since the arrival of Uber, Lyft and smaller services such as the female-targeted DriveHer, the value of those plates has plummeted 70 per cent in less than a decade. Infuriated cabbies have launched a $1.7-billion class action against the city because of it.
Their argument, which has merit, is that by not regulating ride-hailing, the city left cabbies impossibly outnumbered. There are about 5,500 taxi drivers in Toronto, compared with between 50,000 and 75,000 ride-hailing drivers.
Basic supply makes requesting a Lyft much faster than calling a taxi, and so more people are choosing to do it. This story is playing out all over the world.
In New York, the taxi licenses known as medallions used to cost up to US$1-million, but now sell for about US$200,000. There, too, ride-hailing has resulted in cabbies not just losing their nest eggs but being plunged into negative equity.
Eight New York taxi drivers have committed suicide this year. According to their families, many were scrambling to support themselves while paying off huge loans now worth more than the medallions themselves.
At the same time, driving a ride-hailing car doesn’t sound particularly lucrative, either. There isn’t an average rate of pay for an Uber or Lyft driver, since peak evening and weekend hours earn the highest fees, and one of the so-called perks of becoming a driver is choosing your own hours (i.e. juggling driving with another job, or school).
That said, a number of U.S. studies have come up with numbers between US$8 and US$12 an hour after expenses such as gas and insurance. Uber has protested such low numbers, but it was also fined US$20-million for exaggerating its drivers’ incomes just last year.
In Ontario, with the current exchange rate, that suggests that the best-case scenario for driver income is just slightly more than minimum wage.
One significant reason that it’s unlikely that drivers are raking it in is that ride-hailing companies have always undercharged. Ride-hailing is cheap for customers because it’s operated at a loss, part of the ongoing effort to overtake taxis and even public transportation.
The two big ride-hailing companies are bleeding money, and neither has ever turned a profit. Despite that, Lyft is valued at about US$15-billion and Uber at US$120-billion or so, numbers that have come out as both companies prepare to go public in 2019.
That means they will be opening their books, and the truth of drivers' earnings will finally be revealed. Until then, no extra passengers, no ghosting, no vomit – and make sure to include a generous tip.