Published: Wed, May 08, 2019
Finance | By Loren Pratt

Lyft posts $1B loss after IPO but revenue beats

Lyft posts $1B loss after IPO but revenue beats

The union wants fares to be increased by £2 per mile, the commission paid by drivers to Uber to be cut from 23% to 15%, and recognition of "worker" employment status for drivers so they are guaranteed to be paid the minimum wage and to receive holiday pay and other benefits.

Analysis by the union suggests Uber drivers in the United Kingdom earn an average £5 an hour, well below the legal minimum wage of £8.21 for over 25s.

'We do see added risk from Uber aiming to take greater share of the fare from drivers and expect that the more Uber pushes here, the more drivers will fight back and protest, increasing the likelihood of regulations (particularly at the state level in the USA and in Europe) of minimum wage guarantees, ' Daniel Ives, an analyst at Wedbush Securities, told the Washington Post.

"Don't use Uber, don't use Lyft", the New York Taxi Workers Alliance tweeted. Lyft said its hourly wages have risen over the last two years and on average are over $20 per hour. That means it's more hard for Chicago-area drivers to pay for proper vehicle maintenance or make a living wage.

Lyft indicated in a call held to discuss earnings that the Waymo partnership won't be extended to Uber, despite Google's early investment in the Lyft rival.

An Uber spokesperson declined to comment.

However, Uber's own prospectus, recently filed with the US Securities and Exchange Commission, admits that being forced to reclassify drivers as employees or workers would "require us to fundamentally change our business model" and have a big impact on the firm's finances.

While Uber has also cited studies showing its USA drivers were earning between $18-$20 per hour, a 2018 analysis by the Economic Policy Institute came to somewhat different conclusions.

Mishel also pilloried the notion that gig economy workers - independent contract or freelance workers - were becoming a significant economic force.

"Both Uber and Lyft have said that the greatest threat to their investors is driver dissatisfaction".

"Uber and Lyft wrote in their (regulatory) filings that they think they pay drivers too much already".

"Uber and Lyft are unlikely to increase drivers' minimum wage to $28 simply because of the May 8 strike", Beebe said.

"The companies may offer to increase drivers' pay on a one-time bonus basis or in small increments, but remember, although Uber is a tech unicorn, it is still deep in red, losing over $1 billion in 2018", Beebe said.

The company also forecast an expected adjusted EBITDA loss of $270 million to $280 million for the second quarter. Still, Uber is expected to price the sale within its existing range as it is keen to ensure strong aftermarket trading for the stock, they said.

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