Institute for Research on Labor and Employment

Ride-hailing, also known as ridesharing and ridesourcing, is where drivers connect withpassengers through Transportation Network Companies (TNCs), such as Uber and Lyft,through a phone app. This report, the first comprehensive study of ride-hailing driversin Los Angeles County, is based on 260 surveys, 8 interviews and an extensive policy andliterature review. It captures the reality of TNC drivers in the so-called “gig economy,”foregrounds the experience of drivers, and describes what this labor entails.

Because of its high population density, an increased demand for service work, and anemergent desire for more independent working conditions, Los Angeles is an ideal site for on-demand ride-hailing companies. Yet the rise of TNCs and other online labor platforms has prompted concerns about the future of essential employment laws, the quality of available work, and whether an economy that works for everyone is attainable. Moreover, uneven regulation has allowed technology companies to flourish in the gray areas of workers’ rights.

Ride-hailing is non-standard and often temporary work, and there are significant questions around how wages are determined, income instability, job security, and workplace safety. Drivers are currently classified as independent contractors, and thus absorb every risk associated with the work, while companies are freed from ensuring workplace benefits and other protections. In Los Angeles, Uber drivers actually earn less than the mandated minimum wage. Importantly, their classification prevents them from engagingin collective bargaining practices to address a wide range of issues.

In addition, TNCs operate under laxer regulations than those for taxis and other transportation operators. Many rules set for taxi operation, such as base fares and caps on vehicles, prevent the oversaturation of vehicles and provide a viable income for drivers. Other taxi regulations ensure that services offered are not discriminatory and provide access for those with disabilities. Ride-hailing also impacts public transportation, and has led to a 6% reduction in Americans using bus services and a 3% decline in the use of lightrail service. This year, the number of people taking for-hire vehicles nationally is expected to surpass that of those taking the bus.