For immediate release: May. 14, 2020
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In Case You Missed It: Independent financial analyst says Uber and Lyft would need 75 percent fewer drivers if forced to convert from independent contractors to employees
“It’s a very material impact” compounded by “skyrocketing unemployment” when “people are losing their jobs left and right”
SACRAMENTO – A financial analyst interviewed this week on the Rideshare Guy podcast said forcing app-based delivery and rideshare drivers to reclassify as employees instead of independent contractors could reduce the number of needed drivers by 75 percent.
This forecast comes at a time when California is facing record unemployment and app-based platforms are providing immediate work opportunities for thousands of Californians who have been laid off at jobs in retail, hospitality, restaurants and many other industries.
The interview was between Rideshare Guy host Harry Campbell and former financial analyst Charles Zvibleman, on The Rideshare Guy podcast published Monday. Zvibleman noted, “I would say Uber and Lyft could have a big impact on people being able to get jobs when they’re otherwise unemployed.”
Campbell: So you’re sort of saying that if and when there are a lot of unemployed people it’s sort of better to have more job opportunities available as independent contractors versus if they were to hire all employees … It would be less jobs available for fewer people?
Zvibleman: … Consulting studies exist that talked about if we move to an employment model, the number of drivers that Uber and Lyft would need probably would be down like 75 percent. It’s a very material impact. And so yeah, I don’t think that that’s going to be in a regulator’s interest at a time when unemployment is skyrocketing, people are losing their jobs left and right. Like do you want to knock out 75 percent of the Uber and Lyft workforce?
Among other things Zvibleman shared:
- Tough to predict how consumer demand for rides will rebound
- Have to take into account how unemployment will affect demand
- Depending on whether or not Uber has to make drivers employees could affect the flexibility and even number of job opportunities for drivers
- If we move to an employment model for Uber and Lyft, U/L would probably need to reduce the number of drivers by 75% – not exactly in regulators’ interest at a time when unemployment is skyrocketing
- Zvibleman said on the podcast he owns shares of Uber and Lyft.
The Protect App-Based Drivers & Services Act, supported by more than 55,000 app-based drivers, provides a better path forward for drivers, ensuring their independent contractor status with new protections and benefits for drivers. The measure, aimed for the November ballot, provides drivers with historic new benefits and protections, including:
- A guaranteed earning of at least an amount equal to 120 percent of minimum wage plus 30 cents per mile compensation toward expenses;
- A new health care contribution;
- Occupational accident insurance to protect against injuries and illnesses on the job. The measure is also backed by a broad coalition, including public safety organizations, social justice advocates, business and community leaders.