Move Over Uber, the Rideshare Industry Has a New Kid in Town
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The Driver’s Cooperative, a group of rideshare drivers in New York City, began providing rides through its new app on May 30.
The group was founded by a former Uber employee and has already garnered 2,500 members. They hope to wedge themselves into the rideshare market by giving drivers equity in the company, taking a smaller commission than Uber or Lyft, and charging less per ride to customers.
The group formed after becoming dissatisfied over how Uber and Lyft compensate and protect drivers. They hope to give drivers a fair, equitable option.
What is the Driver’s Cooperative?
The Driver’s Cooperative is a rideshare company and app much like their competitors, Uber and Lyft. What sets them apart is not what they provide to customers, but what they offer drivers.
Uber and Lyft both treat their drivers as contractors. This allows their drivers to structure their own time, but it also keeps Uber and Lyft from having to follow labor laws that protect employees.
The lack of protection and benefits for rideshare drivers has become a point of contention between the two tech giants and their service providers. The New York Times reported that recent efforts to force Uber, Lyft, and other "gig-economy" companies to treat their workers as employees failed.
The same report says the Driver’s Cooperative wants to offer drivers a better deal. Their drivers will get paid a fair wage for their work while also collecting dividends as part-owners of the company. They hope to hand this power back to drivers while also lowering the price of a ride for people using their app.
What is the Driver’s Cooperative up against in the rideshare industry?
With a crew of 2,500 drivers, the Driver’s Cooperative has a long way to go to catch up to its competitors. The report said Uber, the industry leader, had 3.5 million active drivers in May.
The established rideshare businesses also have years of app development, capital investments, and brand power that new players like Driver’s Cooperative will have to develop from scratch.
The timing of their launch might also be a problem for the new company. Uber and Lyft both struggled to hold onto drivers during the pandemic because of safety concerns. To motivate drivers to rejoin their ranks, they’re offering strong incentives and bonuses.
Because of the tough times we’re in, drivers might choose to drive for the app they know people use rather than trading the large user pool for the benefits the Driver’s Cooperative is offering.
Still, as the pandemic recedes and life goes back to relative normalcy, Uber and Lyft’s unaddressed labor issues might convince drivers to switch companies in the hopes of more control and bigger paychecks.
Thinking of becoming a rideshare driver?
With all this talk of incentives and dividends, you might be inspired to drive for a rideshare company like the Driver’s Cooperative. Driving can be an easy way to make extra cash, but especially in big cities like New York, the job is more complicated than choosing an app and signing up.
To be a successful driver, you’ll have to do your research to find out where to pick up passengers, what the industry’s standards are, how to stay safe, and how to make sure your car insurance covers you.
Uber and Lyft offer their drivers insurance, but it only covers you while you have passengers in your car. To get complete coverage while you work, you should add rideshare insurance to your personal policy.
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