Workplace

The Drivers Cooperative thinks ridehailing should be owned by drivers, not venture capitalists

The Drivers Cooperative is raising $1 million through crowdfunding to offer a driver-owned alternative to Uber and Lyft in New York City.

Rows of model cars on a white background.

Since its launch, the co-op has amassed 40,000 registered users and 3,400 drivers, and completed more than 2,000 trips.

Image: Randy Tarampi via Unsplash

Uber, Lyft and other tech companies have long held a monopoly in the on-demand economy.

A new driver's co-op operating in New York seeks to change that dynamic, but it's going to be an uphill battle. The Drivers Cooperative has raised a little over $989,000, with the ultimate goal of raising $1.07 million for its ridehailing service that is owned by drivers, rather than founders, executives and venture capitalists. The cooperative told Protocol that it plans to use the crowdfunded money to further develop the app and increase marketing.

Competitors have tried and failed to challenge Uber and Lyft in the past, but the founders at The Drivers Cooperative are hoping the company's fate will be different from the others. The co-op is banking on the notion that customers want more affordable fares while also doing right by drivers and "doing a solid to New York City," The Drivers Cooperative co-founder Ken Lewis told Protocol.

"I think a sense of fairness is what every person feels when they take the cooperative," he said. " ... We're hoping that if The Drivers Cooperative can show their worth, it will show that everyone has got to share in this economy. That's one of the things we want to put the emphasis on: How can more [money] go to the people at the bottom who make the city move?"

The Drivers Cooperative pays drivers $1.64 per mile, which is higher than the required $1.26 per mile NYC minimum. The Drivers Cooperative also only takes a 15% cut from driver fares, compared to Uber's 21.5% take rate. Meanwhile, the cooperative status gives drivers true ownership in the company, which means they get back some of what they put in.

Each driver-member gets one voting share in the company, Lewis said. Drivers also get points for completing trips, recruiting other drivers, recruiting passengers, attending co-op meetings and more. The points ultimately determine the amount of profit-share each driver gets, Lewis explained.

Lewis, a longtime black-car driver who immigrated to the U.S. from the island of Grenada in the nineties, founded The Drivers Cooperative alongside Alissa Orlando, a former operations manager for Uber in East Africa, and Erik Forman, a union organizer and former member of the Independent Drivers Guild. The IDG formed as a partnership between the Machinists Union and Uber in 2016. Despite Forman's involvement with IDG, The Drivers Cooperative is a separate entity, Lewis said.

A key point of contention in the gig economy centers around whether drivers should be independent contractors or employees. In the case of The Drivers Cooperative, driver-members are not employees, Lewis said.

"I think the contractor or full time discussion is one that will continue because most drivers, of course, love the flexibility of this job," Lewis said. "But I do think that there has to be more responsibility of the company, much akin to what the federal standards are for full-time workers."

While The Drivers Cooperative does not offer drivers health insurance, which is one of the biggest concerns many drivers' rights organizations raise, the goal is to eventually offer that benefit.

"It is definitely a long-term goal," Lewis said about providing health insurance to drivers. "Though we cannot promise health care immediately, we can continue to fight to give workers the right to get those kind of benefits. The whole independent contractor scheme, for instance, has to be readdressed so people who work all these long hours can get benefits. And we will see in any way if it's possible how we can [offer health insurance]. At the moment we're just trying to survive."

Lewis said The Drivers Cooperative's vision is to better support drivers. Even if Uber and Lyft were to change their business models and give drivers ownership of their respective companies, for example, "that would be a big win for us," Lewis said.

In a statement to Protocol, a Lyft spokesperson said, "We're constantly working to improve the driver experience on our platform and share the goals of allowing drivers to work efficiently and independently."

Uber did not respond to Protocol's request for comment.

The Drivers Cooperative is in its early days, having just launched the rideshare app, Co-Op Ride, in late May. Since then, the co-op has amassed 40,000 registered users and 3,400 drivers, and completed more than 2,000 trips. The company is nowhere close to being on par with Uber and Lyft, but Lewis said The Drivers Cooperative "will be fine" even if it only obtains 3% of the market share in New York.

Since the demand is not yet there, The Drivers Cooperative encourages drivers to work for Uber or Lyft as the co-op ramps up.

"As much as drivers support and love the cooperative, if the co-op is not busy enough, we'll have to work with Uber and Lyft," Lewis said.

The Drivers Cooperative doesn't envision completely taking down Uber and Lyft but it does hope to be able to expand the co-op rideshare model into other markets. As the saying goes, Lewis said, if The Drivers Cooperative can make it in New York, "you can make it anywhere."

Lewis added, "This is a free market and Uber has a right to exist, and so do companies formed by workers ... I just think we have to become far more people-centered and worker-centered in terms of how the wealth is spread, and in terms of how riches are distributed."

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