Today, drivers for ride-hailing services “walked out” because of their paltry pay and lack of benefits.
During the recession, layoffs, unemployment and underemployment released floods of drivers onto city streets at the same time that new technology spawned transportation apps such as Uber and Lyft that allowed anyone with a car to offer rides to paying passengers. The abundance of drivers combined with lax regulations mean these ride-hailing services are a mess: In addition to low salaries and no benefits, protections for drivers and riders are scarce, and drivers have no say in the management of the industry.
This isn’t the first time that the drivers who provide rides for Americans resorted to a walkout to protest their mistreatment and unlivable conditions. In 1934, New York City taxi drivers stopped service and blocked city streets to call attention to grievances similar to those of ride-hailing service drivers today.
Thanks to the strike, city officials, taxi fleets and even popular media outlets grew concerned with the plight of the drivers — and with the need to keep the peace in a labor conflict tinged with violence. The need for robust policy moved to the fore. The strike and its aftermath reveal how ride-hailing service drivers today can refocus the narrative on their suffering, and not on the companies such as Uber and Lyft.
The Great Depression led many Americans to seek informal work in jobs that today would be hosted on such platforms as TaskRabbit, Care.com, DoorDash and ride-hailing apps — menial, manual labor jobs in the “gig economy.” Some worked temporarily on farms or as house cleaners. Many crafted homemade goods and sold them on the street to earn extra cash. Some became self-employed truck drivers. Many could only find work with the Mafia.
With an unemployment rate that peaked at 27.9 percent in 1933, and without a welfare state, these part-time gigs were crucial to Americans trying to avoid starvation and homelessness.
Becoming a taxi driver was an important option for poor and unemployed people seeking financial relief, because the barriers to entry were so low: Virtually anyone who wanted to drive a taxi could start taking passengers around the city. But those very low barriers to entry made it hard for taxi drivers to survive. “Fare wars” drove fleet owners to cut commissions and costs. This unchecked and unregulated competition drove prices down, leaving independent drivers and fleets with dwindling profits.
Fed up, 12,000 taxi drivers went on strike on Feb. 3, 1934. Attempts by policymakers to address the situation had failed to make a difference in the lives of drivers. Making matters worse, the previous mayor, James Walker, was caught up in a scandal involving one of the largest taxi fleets, which tainted any solution he offered. The nickel tax, meant to raise funds for the city and increase the pricing on taxi trips, ended up hitting drivers, not fleets or customers. Even during the strikes, negotiations among government officials, fleets and drivers often broke down.
On Feb. 5, two days into the strike, taxi drivers clashed with police, and what had been peaceful protests turned violent. Dozens of people were injured, and the violence shut down the city. The clash propelled the drivers’ plight to the forefront of public conversation. Artists wrote songs, plays and even Hollywood films about the hard life of a taxi driver.
But in the absence of effective solutions, the protests continued. By March 22, the number of strikers had dwindled, but their protests remained violent. That day, approximately 200 striking drivers marched to City Hall, leaving taxis stranded in the road. Police were frenzied, and protesters surrounded the mayor on his way home from lunch. He urged them to avoid “rough stuff.”
The situation festered, with protests continuing for months. Driven by concerns prompted by the strikers, in 1937, the New York City Board of Aldermen passed the Haas Act, leading to the creation of taxi medallions. This new licensing regime substantially increased the barrier of entry as prices of medallions soared. Taxi driving became a profession offering a surefire way to gain economic security. Unions such as the New York Taxi Workers Alliance began working for the benefits of drivers, with efforts continuing to the present. Many other U.S. cities followed suit with similar licensing policies intended to benefit drivers.
Ironically, the economic security offered by a prized medallion has been seriously compromised by the rise of ride-hailing services in the past several years. To some extent, these services have replicated the unregulated, intensely competitive marketplace of the 1930s, benefiting consumers and the companies themselves at the expense of drivers.
Today, Uber is seeking to raise at least $9 billion from investors in an initial public offering (IPO), which promises to turn shareholders into billionaires. Anticipating Uber’s IPO, Gig Workers Rising, a community of app and platform workers including drivers from Uber, Lyft and other ride-hailing apps, planned a protest at Uber’s headquarters in Seattle. Drivers in cities around the country are turning off their apps in solidarity. Their demands include higher wages, clear wage policy, employee benefits and representation for drivers in the company.
Will Uber, Lyft and other companies learn from the past to build a better future for everyone, including those who work in the gig economy? Or will they fail to learn history’s lessons and let the situation once again boil over?
If early moves are any indication, the trajectory is not hopeful. In celebration of the IPO, Uber is expected to pay up to $40,000 for some 1.1 million drivers as “driver appreciation.” This is already history repeating itself: Before the strikes of 1934, government officials required taxi companies in New York to pay back drivers for taxes that companies had passed along to them. This one-time, quick payout did little to provide economic relief to cabbies and failed to prevent the massive taxi strike in subsequent years.
The lesson from the Depression is that drivers must be willing to carry out a long strike and keep their demands at the forefront of public consciousness. If they turn their apps off long enough, customers and companies will notice, and drivers can loudly tell their stories. This will force politicians and the companies to confront their demands and forge a system that works for drivers, ride-sharing companies and the millions who use them.
The failure to create such a system would portend disaster. As the 1930s New York strike proved, Americans won’t keep driving around their peers for substandard wages and benefits. Continuing to ignore the problem will only compound it, with the potential for violence and serious economic damage.