September 20, 2019

Will the fortune of ride-hailing drivers changed for the better?

Will the fortune of ride-hailing drivers changed for the better?

Technology has made a lot of impact into the daily lives of people.  It affects how we access news, where to shop, and even how we pay.

The wide influence of technology is caused by the adoption of ever smarter software in industrial giants.  Disruptions caused by these companies have displaced existing markets.  For example ride-hailing companies such as Uber and Lyft have basically changed the passenger transport industry.

As consumer of passenger transport services, or what used to be known as taxi services, we enjoy many benefits ever since the ride-hailing industry started.  Increased competition has made rides cheaper, faster and more pleasant in some cases.

But the livelihood of drivers have not improved.  Taxi drivers' income is affected due to increased competition.  Rides are cheaper as ride-hailing companies do not need to pay salaries & benefits to their drivers, as they are categorized as "Independent Contractors".

The livelihood of the ride-hailing drivers are not only battered by the increased supply of ride-hailing drivers due to weakening economy; they are also susceptible to the "Algorithm" that dictate the rides and fares available.  In software sense, the "Algorithm" is merely a modeling of how the demand for the rides could be fulfilled, and may be tuned for the benefit of the business.

Well folks, the fortune of the ride-hailing companies like Uber and Lyft is about to change abruptly.  The state of California in the US has made a rule that the drivers are indeed the ride-hailing companies' employees.  That means the companies will need to start paying benefits such as minimum wages, salaries, healthcare benefits, leaves etc to their drivers.

Will the welfare of ride-hailing drivers in the Asian region get the same benefits too?