Uber and Lyft did not oppose the organizing campaign
More than 50,000 California ride-share drivers have signed cards to join the newly formed California Gig Workers Union, according to organizers — the biggest U.S. effort yet to organize a workforce that numbers in the millions nationwide. Organizers told drivers the union could help them secure more take-home pay in one of the nation’s least affordable states, where the country’s highest gas prices and a growing fleet of driverless taxis are undercutting the economics of gig work.
The drivers’ grievances start with the arithmetic of the job. When Margarita Peñalosa began driving for Uber and Lyft in 2017, eight hours a day was enough to cover living expenses and send cash to family in Colombia. Now, she said, it takes 12-hour days. “The cost of driving is twice what it was when I started,” Peñalosa said.
Ride-share drivers set their own schedules, which gives them flexibility to care for children or hold other jobs. But because they are classified as independent contractors rather than employees, gig workers lack traditional labor protections in most of the U.S., including minimum wage laws, workers’ compensation and collective-bargaining rights. Instead of an hourly wage, Uber and Lyft drivers are paid by the ride, offered upfront rates set by the platforms’ proprietary algorithms, and required to be “online” with the app to receive trip requests. They are not paid for time spent waiting for a request or driving back from a distant drop-off with an empty car.
Overhead is eating into those earnings. Drivers pay vehicle insurance, repair and maintenance costs that have outpaced inflation in recent years, and they are especially exposed to gasoline prices that are up more than 50% nationwide this year. California drivers were recently filling up at about $6.31 a gallon for regular gas, the highest average of any state, according to AAA.
The pay gap shows up in drivers’ own numbers. Artur Gevorkyan, 46, who has driven for Uber off and on since 2015, made $1,006 before taxes and expenses for about 22 hours of active driving time in one of his better recent weeks, according to a review of his pay statement — nearly $45.50 an hour measured by active driving time. Including the nearly 30 additional hours he spent online that week, hours Gevorkyan considers working hours, his pretax income for the same week came out to less than $19.50 an hour. His expenses include a $600 monthly payment on his 2019 Infiniti QX60, close to $800 every six months for insurance, and nearly $70 for gas on a typical 250-mile day. “The gas is killing me,” Gevorkyan said.
Several ride-share drivers in Los Angeles told the Journal that after operating costs and unpaid online time, their actual hourly earnings often fall below the state’s $16.90 minimum wage. Gridwise, an analytics platform used by hundreds of thousands of Uber and Lyft drivers, estimates that average gross pay nationwide was $24.38 an online hour in the second quarter — up 7.3% from a year earlier but down about 10% from 2021, when driver earnings peaked amid a postpandemic labor shortage.
Sam Gutierrez, 54, who drives 10 to 11 hours a day for Uber and Lyft in the Inland Empire east of Los Angeles, said he typically grosses $140 to $150 a day, minus about $30 of gas for his Ford Focus. He said he had to apply for Medicaid and food assistance this year for the first time in his life. “It’s crazy the way we’re living right now,” Gutierrez said. “I just went on medication, my blood pressure went up so drastically.”
Los Angeles is among the first cities to allow driverless Waymo taxis to compete for customers, a practice that began in 2024. More than 900 of the self-driving taxis now roam the city’s streets, doing work that would otherwise fall to human drivers. Earnings have lagged behind in Los Angeles, where Uber says its drivers make more than $34 an hour “when actively working” — meaning the time between accepting a ride and dropping off a passenger — an increase of about 17% since 2019. Lyft declined to comment on driver pay, but a spokesman said the company “does well when drivers do well.”
Unlike their opposition in other states to classifying drivers as employees, Uber and Lyft have not fought the California unionization push. Part of the reason is that the California bill that allowed drivers to unionize was part of a legislative bargain that also reduced the ride-share companies’ insurance costs. Organizers made their pitch in airport ride-share parking lots in Los Angeles, San Francisco and other cities, often over free coffee, doughnuts or pizza. Beyond pay and benefits, the union has said it could help drivers appeal “deactivations,” in which the companies cut off drivers’ app access for alleged rule violations, unsafe driving or other reasons.
California Gig Workers Union spokesman Tim Sandoval said the organization will eventually represent all of the estimated 300,000 to 350,000 ride-share drivers in the state.
California is the second state to reach this point. Massachusetts certified the nation’s first union for ride-share drivers in May, a few months ahead of California, and Illinois could follow after Gov. J.B. Pritzker signed a law in August allowing Uber and Lyft drivers to unionize. California and Massachusetts also guarantee drivers a minimum wage based on the time they spend actively driving passengers, though time spent waiting for fares remains uncompensated. New York City, Washington state and Minnesota have adopted rules in recent years guaranteeing drivers earn a minimum amount per mile, and Portland’s city council considered a proposal earlier this year to cap the “take rate” — the share of a passenger’s fare that goes to Uber and Lyft — at 20%.