By Adam Robles
Rideshare drivers do not need a wage increase. Increasing their minimum wage may be a simple solution that helps them maintain a living wage, but there are flaws with this reasoning.
As of Oct. 15, a proposition to raise the minimum wage of rideshare drivers in Los Angeles to $30 per hour has been pitched by the LA City Council, with intentions to help drivers.
A study conducted last year by the Economic Policy Institution calculated the take-home profits of drivers for major cities in the U.S. It showed that the average L.A. driver makes $12 per hour after taxes.
The wage increase seems smart since the cost for rent, gas, car payments and insurance is very high in L.A. If room is left for manipulation, this wage increase for rideshare drivers could backfire on consumers and even on L.A. residents.
If this proposition is written for people driving in L.A. rather than drivers who reside in L.A., it could attract the attention of drivers from surrounding cities. That sweet bonus would be more than enough to get drivers from adjacent cities to drive in L.A.
This would be bad because the morning traffic coming into the city will be worse, as well as the horrendous traffic leaving the city in the afternoon.
The traffic is already bad enough so it wouldn’t be smart to allow the drivers to bend the rules so that they can earn a bigger paycheck. Collected data from the Auto Insurance Center shows that the annual average commute time in L.A. is at 80 hours.
Some drivers are unable to pay for rent because they don’t earn a living wage from driving alone, but the approach to this situation needs to be reviewed more carefully.
It is definitely harder to find a normal job than driving for rideshare companies such as Uber and Lyft, but being a rideshare driver isn’t meant to be a full-time job.
These driving services seems to be more of a “earn extra money on the way to your destination” type of service rather than a full-time taxi service. This means that it wasn’t meant to be taken advantage of and made a full-time job.
So the argument of drivers becoming homeless while driving for the company may not be the company’s fault. If its services were never advertised to be made liveable on, then why should they have to pay more money?
There are other ways for the company to help its drivers. They could partner up with a gas company or insurance company and offer free or discounted gas for drivers who reach a certain amount of miles per week.