Low-wage Uber drivers stage mass strike 24 hours before the IPO that has Wall Street drooling

As a non-traditional business prepares to mint a new class of millionaires, the workers making it possible are using non-traditional tactics to call them out.

(Photo Illustration by Budrul Chukrut/SOPA Images/LightRocket via Getty Images)
(Photo Illustration by Budrul Chukrut/SOPA Images/LightRocket via Getty Images)

The drivers whose time and labor have positioned insiders to cash out when  Uber goes public on Thursday are on strike, a day before the firm’s big stock exchange debut.

Drivers across New York City — including those who work for Uber’s competitors, such as Lyft — are turning off their ride-hailing apps for two hours on Wednesday morning, ahead of a planned 1:00 pm rally at those firms’ New York offices.

In Los Angeles, the call is for a 24-hour logout scheduled to begin overnight Tuesday and punctuated with rolling rallies at the city’s biggest airport. Drivers in Philadelphia, Boston, Chicago, Minneapolis, and San Francisco are making a similar push to choke Uber and Lyft’s service offerings for significant chunks of time.

A series of drivers’ groups in major cities called for the work stoppage over the weekend, both in anticipation of the spotlight Thursday’s stock sales will bring to their fight for reasonable wages and in reaction to a strike organized by Rideshare Drivers United in Los Angeles last month. The resulting disruptive pressure campaign promises to be transatlantic, with drivers expected to log off en masse in London, Birmingham, Glasgow, and Nottingham as well.

A virtual picket line

Uber’s frontline workforce ends up netting just $9.21 an hour, a recent analysis by the Economic Policy Institute’s Larry Mishel found, and drivers across the app-taxi ecosystem have spent years pushing back against startup business models that deny them traditional labor protections so that the techified version of taxicabs will look more financially sound than it is.


But given the non-traditional nature of the companies involved, this is not the classic factory walkout of popular imagination. “There are so many obstacles to organizing drivers as opposed to traditional employees because there is no one-shop floor,” New York Taxi Workers Association head Bhairavi Desai said.

There’s something inescapably strange about a collective action that relies on individuals in different places turning off an app at the same time. But Desai feels her group and its peers have mastered this odd new landscape.

“It means you go out to the collective spaces that do exist, from the airports to key intersections to restaurants and places of worship, key parts of a neighborhood. Much of our organizing is done away from the ‘workplace,’” she said, “but on the other hand everywhere we go is a driver’s workplace.”

The scattered and digital nature of this work doesn’t just change the optics of a strike. It also kicks out some of the tactic’s venerated girders. It’s hard to cross a picket line, but easy to flick a button on your phone – especially when the apps are expected to offer major cash inducements to get what Desai called “a surplus army of part-timers” to undermine the intentional shortage of labor on Wednesday. Success is harder to measure, too, when hard numbers on the strike must be dis-aggregated from company data on wait times and ride volume.

“The way I will know we’ve succeeded tomorrow will be what I see in a driver’s eyes,” Desai said. “You go out on strike to advance your demands and ultimately win, but we also strike so workers feel powerful, especially workers who’ve been so deeply exploited.”


Drivers have been stopping to grab flyers about the strike plan from NYTWA organizers on the street, she said, then immediately snapping a picture to share it on their WhatsApp groups. The enthusiasm among Uber and Lyft’s workforces is as clear a sign of momentum as she needs.

“We’ve already broken through that sense of individualism and apathy” that the company will count on in sending push notifications about bonus pay during the strike, Desai said. “That itself is such a triumph.”

The chase for digital gold dust

Uber’s debut as a publicly-traded stock has been subject of much excitement among the investor class. Such a tizzy is almost unavoidable considering the sheer volume of media that exists solely to advise amateur stock-pickers around the gobs and gobs of money that change hands among those wealthy enough to pay their bills, then play corporate moneyball with the leftovers.

The numbers and jargon and acronyms that fuel that dust-storm in the trade papers can be dizzying. But the baselines for Uber are relatively simple: Thursday’s offering will set out a 180 million-share buffet of company stock for amateurs and megabanks alike to pick over.

At an expected initial price between $44 and $50, Uber is banking on a $8 to $9 billion cash infusion from the new shares. But they’re dwarfed by the roughly 1.5 billion shares that already exist pre-IPO, held by a mix of investment houses and insiders. If the stock can hold the optimistic-end $50 price-point, Uber will officially be worth a shade under $84 billion – think “the entire Ethiopian economy, plus a $3 billion tip” – on paper.


No wonder, then, that the drivers getting paid roughly the same as they’d make at Burger King are peeved. The work they’ve put in as “gig economy” laborers will generate fortunes for Uber’s staff and early investors, if the stock does what the firm is hoping over the months to come. But drivers will merely continue to take home their current meager leavings, in transactions that are only possible because Uber’s investors have subsidized their business model, accepting that the firm will operate at a loss year after year in service of the cash fountain insiders hope to see Thursday.

“Uber is far from profitable. It’s not even clear there’s a path forward to profitability,” Mishel said. Thursday’s invitation to the general public to chip $9 billion into the Uber kitty is, in effect, a pitch to outsiders that they, too, should want to help subsidize the losses Uber still takes on the transactions it facilitates.

The company’s voluminous official filings in prelude to Thursday’s hoped-for bonanza contain a mix of promises and warnings on the subject of drivers. Uber anticipates their discontent will be a headwind to future business prospects, and is legally obligated to say so in writing before selling anyone stock.

But don’t worry, the documents also say, we’re working on it.

“They acknowledge in their own IPO that in order to become profitable they will have to decrease driver incentives and things of that nature. They’re going to make drivers unhappy,” EPI’s Mishel said, adding that the documents further inform investors that Uber sees itself as competing for workers with restaurants and retail storefronts.

“But if you actually look at the education credentials of Uber drivers, they’re quite educated, so they probably don’t self-identify as the lowest wage workers,” Mishel said. “Ninety percent of workers [in the overall economy] earn more” than the $9.21 hourly figure he calculates as average Uber pay after the expenses a traditional employer would cover but which contractors — as the ride apps insist their drivers are — shoulder alone.

Short-term savants, long-term losers

Striking drivers may have a promising immediate future ahead. As they use the attention Uber’s IPO is garnering to keep their grievances with the firm close to the top of public minds, there is some hope of winning some significant wage gains in some key jurisdictions.

Drivers won two major court victories in the past year; one which upheld a higher hourly pay floor in New York, the second which opened the door to misclassification lawsuits in California. Meanwhile, the retail and restaurant workers Uber sees as its recruiting pool have spent the past half-decade proving that strikes work.

But with the IPO valuation Uber insiders are counting on Thursday predicated on keeping labor costs where they are, any positive development for drivers is a potential catastrophe for the people betting on a stock market reward.

“I gotta tell you, as somebody who grew up poor I’m always fascinated at how quickly rich people panic,” Desai said, pointing to the steady decline in Lyft’s stock since its own April debut on the Nasdaq. Lyft’s price is down 30 percent even as analysts remained rosy about the company’s ability to cut costs through automation — and even without a show-of-force labor stoppage on the eve of the Lyft IPO.

“As much as Uber has tried to cast drivers as expendable and driver dissatisfaction as just a bump in the road, I think the message of this strike will be that we’re not going away.” Desai said. “Our poverty is not collateral damage, and you can’t just quiet us. We’re going to have an impact on your valuation.”

But all of the pre-IPO hullabaloo masks an unavoidable reality: The story Uber is selling – one in which driverless automation and expansions like Uber Eats rescue the core business from its current underwater mathematics – may be a longer shot than the futurists who’ve hyped the Silicon Valley darling for nearly a decade wish to believe. Advantage, then, accrues to those investors who jump in for the short term, as opposed to those left holding the bag.

“People want to cash out,” Mishel said. “It’s up to other people to buy their fantasy.”