Law would force Uber, Lyft to pay drivers 75 percent of what riders pay

The state of Connecticut is advancing a bill that would force rideshare companies like Uber and Lyft to pay drivers the bulk of what riders pay for the ride. The drivers would get 75 percent of what the rider is paying and the rideshare company would get 25 percent.

The law would mean an end to fleecing drivers and instead, paying them more fairly.

From the CT Mirror:

In written testimony submitted to the committee, Uber opposed the bill, arguing that it often pays drivers more per ride than what it receives from customers. An Uber spokesperson also warned that the passage of this bill could result in rideshare drivers, who are not employees but independent contractors with Uber, having to pay thousands of dollars more per year in insurance payments currently covered by Uber.

Uber is opposing the bill? I’m shocked!

Where’s the proof?

That first claim is a joke. I don’t think I’ve ever looked at a breakdown of a ride where I as a driver earned more than what the rider paid. I’d have to see proof of that claim. I don’t believe it.

I think riders believe drivers already earn the lion share of what they’re paying to go from point A to point B. It’s a falsity rideshare companies are not interested in dispelling.  Why would they? They don’t want riders to know how much the driver actually makes.

I love them, but I don’t want to know how much children in Viet Nam were paid to make them.

Likewise, Nike has no interest in informing consumers how much they pay workers in Viet Nam to make a pair of Air Jordans. This is the way companies naturally operate.

How much is Uber’s insurance worth?

Uber’s last claim about drivers having to pay thousands of dollars in added insurance is a joke. Uber owns its own auto insurance company, James River Insurance Company. It covers the driver from when they first accept a ride request to when the passenger leaves the vehicle. If Uber is contending their insurance is worth thousands a year to a driver, why doesn’t it show in the fare breakdown? Also, why don’t they allow the driver to opt out of James River Insurance Company coverage so that they can obtain their own insurance?

Most rideshare drivers have rideshare gap insurance anyway.

Keeping more money in the local economy is good

If Connecticut passes this bill into law, I expect the other 49 states to pass a similar law too. Why wouldn’t they? It makes perfect economic sense. More of the money paid by the rider would go to the driver. This means more money would stay in the local economy. For that reason alone I would expect most states to enact this type of bill into law.

It just makes sense.

In conclusion

I drive for Uber and Lyft because it works for me. That doesn’t mean I’m getting paid fairly. Since Lyft always follows what Uber does, it’s not like you can just drive for Lyft when Uber does something negatively affecting a driver’s earnings.

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Rick Rottman

My name is Rick Rottman and I live in Maryland. This is my blog. If you'd like to know more about me, check out my About page.

6 thoughts on “Law would force Uber, Lyft to pay drivers 75 percent of what riders pay”

  1. In some cases Uber ends up paying drivers more than rider pay but that’s rare. For an Uber pool or express pool that goes couple miles and adds no additional pickups Uber pays a minimum of $4.09 (in SF) to driver which might charge riders less but this is nothing compared to extra cuts for most trips. Beside if Uber pool in some cases results losing money for Uber they should look into their products not making driver pay for it.

  2. Many times in my area, as a driver, when I check what the rider pays, what I get paid, and what Uber keeps, they are keeping well over 50% of what the rider is paying in most cases. They also still charge surge to the rider using a multiplier, but are now only paying the drivers a dollar amount added to the total trip. it can be as little as $1.25 up to $6.00 or $8.00 for the entire trip. Doesn’t matter how far they are going. It is a flat fee payout for the driver whethe they go 1 mile or 100 miles. Having to drive more miles and put in more hours to make what I was making when I first started driving for Uber 2 1/2 years ago.

    1. I picked up a $2.25 surge yesterday. The rider paid a total of $10.54. Uber collected $2.73 and I received $7.81. The rider didn’t pay a multiplier for the surge, just the flat $2.25.

      I think what Uber is trying to do is put more of an economic incentive on time and less on distance. I’m all for that. You and I have been driving for the same amount of time, 2 1/2 years. When I first started out, driving someone to Baltimore or Washington DC was like hitting the lottery. Okay, maybe more like winning a scratcher. 🙂 If I did it in the morning, I wouldn’t even have to drive the rest of the day if I wanted to earn my daily average.

      As it stands now, I would rather be compensated for my time. If I have to drive someone two miles away in heavy traffic, I want to earn more than the minimum. I should earn more. That’s the worst, most difficult driving there is.

    1. Once it’s passed into law in Connecticut, I expect other states to do the same. Why wouldn’t they? It costs nothing. More money for drivers means they pay more in state tax and have more money to spend locally.

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