The companies say this enables lower fares and gives drivers flexibility, but their decision has spurred lawsuits and state legislation. This contractor model means drivers don’t get the security of a minimum wage, insurance, overtime pay or other benefits. Lyft takes a commission but doesn’t disclose its share. Lyft lost $1.75 billion last year and $2.60 billion in 2019, although last quarter it was profitable for the first time on an adjusted EBITDA basis, which ignores costs like stock-based compensation and taxes.Uber and Lyft regard drivers as independent contractors. Neither company has ever shown sustained profits, and instead have shown staggering losses compared with most other publicly traded companies. Uber lost $6.77 billion last year, and $8.51 billion in 2019, the last full year before the pandemic. The driver shortage calls into question whether the ride-sharing business model is sustainable.
It was a bit like a gold rush for drivers who were not able to deliver passengers during the pandemic while Uber's ride-sharing revenue decreased 43% between 20, its delivery revenue increased 179%, according to its 2020 annual earnings report. Polenz remembers, "I got turned on to InstaCart and Doordash, Amazon Flex, and I was driving like a quarter of the miles, and I was like making 200 bucks a day, easy." In fact, many drivers switched to food delivery, like Chad Polenz, creator of Chad The Gig Economist. But for those who are still relying on ride-sharing platforms to make a living, the companies are not offering enough. Lyft has a long list of incentives and bonuses for drivers. Uber's website says drivers make anywhere between $22 per hour in cities like Orlando, to $37 an hour in cities like New York. I think it was around $85 dollars for 12 hours." "Once everything started to slow down, I was making. "The companies don't really look at us as human beings, and they just consider us as profit," says Ben Valdez, a driver and volunteer coordinator for the group Rideshare Drivers United.
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