Uber and Lyft have already caused extreme disruption of the taxi industry in the U.S. in the same way that airbnb has disrupted the hotel industry. Both of these companies are identified with and substantially drive the so-called sharing economy which is powered by very sophisticated software running on smart phones. However, there are more surprises to come from these companies one of which was hinted at in a recent article (see: Older Drivers Hit the Road for Uber and Lyft). Below is an excerpt from it:
Ms. [Carol Sue] Johnson is among a growing number of older Americans who are driving for Uber or its competitor Lyft to augment their retirement income. Some drivers say it is a great chance to be independent and earn extra cash on their own schedule. But others, including some drivers, say it is exploitation of older people who work as independent contractors, without any benefits, because their age means they have a harder time finding full-time employment. Many retirees, like Ms. Johnson, drive part time, about 20 to 30 hours a week; others may drive full time, which in many ways takes them out of the fully retired category. Drivers are in such demand that last July Uber and Life Reimagined, a subsidiary of AARP, the organization for people over 50, formed a partnership to recruit more people as drivers. They are trying to tap into the 50-and-older work force, a segment that is growing steadily, according to an AARP report released last year. As the population ages and more baby boomers challenge traditional retirement norms, the number of older workers should continue to rise. One reason is that many people are leaving the full-time work force with less money than they need to support themselves at a comfortable standard of living.
Older drivers strike me as very suitable candidates for Uber and Lyft positions as long as they have no major physical disabilities. However, Uber's relationship to its drivers seems to be gradually changing. The company is becoming more bureaucratized and professionalized with new rules pertaining to the hours that drivers must work and how they interact with customers as independent contractors (see: Uber's Clever, Hidden Move: How Its Latest Fare Cuts Can Actually Lock In Its Drivers). Here's a quote from this article:
Uber is guaranteeing hourly earnings for drivers of anywhere from $10 to $26 depending on if they are “peak” hours or not. But there’s another layer to the guarantees not mentioned in the company blog post: drivers only qualify if they obey Uber’s rules, which make it almost impossible to work for another car-service company at the same time. To qualify for the hourly guarantees, drivers have to accept 90% of ride requests, do one trip per hour and be online 50 out of 60 minutes. That makes it difficult if not impossible to work for more than one platform at once, something many drivers do to stay busy.
Putting all of this together, driving for Uber and Lyft may become less attractive as a temporary, part-time "gig" for free spirits who are looking for flexibility in their work life. I don't present this necessarily as a problem. Rather it reflects the growing maturing of businesses participating in the sharing economy. These new rules may even make Uber and Lyft more attractive for older drivers as younger ones choose other forms of employment.