How the Drivers Cooperative Is Helping Immigrant Workers Reclaim Their Power
The Drivers Cooperative, a grantee partner of the WES Mariam Assefa Fund, is a New York City-based organization of over 9,000 drivers who came together during the pandemic in pursuit of fundamental change in the rideshare vehicle industry.
A driver-owned alternative to Uber and Lyft, the co-op has been able to create a guaranteed $30 per hour minimum wage for its members, the first and only guaranteed living wage in the gig economy. Since its launch in 2021, the Drivers Cooperative has provided over 200,000 trips and become one of the leading providers of transportation for people with disabilities in New York City’s Access-A-Ride program. The Fund first made a grant to the Drivers Cooperative in 2021 to help increase its membership and promote opportunity and equity in a sector that attracts many immigrants.
The co-op has had a meaningful impact on the lives of their driver members, offering ownership stake and profit sharing in the business, says Cynette Wilson, finance manager and driver member. “Having an equity stake goes a long way after a hard day’s work. Being a member as both a driver and now as part of management has impacted my life by affording me the opportunity to deepen my skill sets and grow as a leader. As we closed our books for 2022 and prepared our annual report, I felt very proud to be a part of this work,” she says.
And just last week, the organization launched Co-Op 2.0, a brand new rideshare platform their team built from scratch. The platform provides parity on key functionality with the major platforms and will be made available on an at-cost basis to cooperatives all over the world. With this technology, the Drivers Cooperative aims to further increase hourly wages for drivers while improving service quality for riders.
To help address the outsize impact of transportation on climate change, the co-op has also launched an ambitious plan to support a green transition in the rideshare industry. The plan proposes adding a $1 “green transition surcharge” to each trip and depositing the surcharges into a savings plan that will support each driver’s purchase of an electric vehicle (EV). The plan’s biggest ambition is embodied in a commitment to a 100% conversion to electric within five years. To get there, the plan includes an EV Navigator program through which drivers help one another navigate the options for obtaining the subsidies they need to finance the switch to an EV.
We recently sat down with Erik Forman, co-founder of the Drivers Cooperative, who shared his thoughts about the organization and what’s on the horizon:
Q: How does the Drivers Cooperative aim to support immigrant workers?
A: Rideshare platforms that dominate the industry attract mostly immigrant drivers with promises of autonomy and freedom, and then entrap them with a treadmill of debt to make car payments and insurance premiums by working long hours for low pay. Based on our analysis, competing New York City rideshare platforms extract over $50 million per month on average from the 91 percent immigrant, predominantly people of color, workforce that powers the gig economy. These platforms are only interested in appeasing outside shareholders with the highest possible return on their investment, and they get away with abusing that power because immigrant workers don’t have a voice.
The result is a workforce where over 70 percent of drivers have less than $1,000 in savings and take home around $30,000 per year while working full-time hours in one of the most expensive cities on the planet. Drivers have organized for change and won city-level regulations intended to provide a gross hourly minimum wage of about $27 per hour (or a net of $15 per hour), but companies find loopholes and pay increases aren’t keeping pace with inflation.
We founded the Drivers Cooperative with a mission to end exploitative conditions in the for-hire vehicle industry through system change. For us, drivers are the owners, so our mandate is to look for every possible way to help drivers build wealth. We seek to create good jobs for our co-op members – most of whom are immigrants – and empower them to reclaim the value of their labor. By coming together as a cooperative, we’re able to build, own, and operate our own platform. We take only a minimal commission so all profits go back to workers, and we’re able to use our collective voice to reduce our costs and speak out for change in our industry. This has allowed us to go beyond the industry minimum wage by providing a living wage of $30 per hour to our members.
This stakeholder ownership model makes for better business. When our interests are aligned, we can all work together for the common good. However, that’s not how companies like Uber and Lyft are structured. In the conventional model, shareholders would likely oppose diluting their ownership to give equity to drivers and see an hourly wage guarantee as a threat to their profits.
Q: Environmental justice was not originally central to your mission as an organization. How did it become a priority?
A: Climate change is a major driver of the instability that leads to mass migration and also exacerbates other inequities. In New York City, it is predominantly immigrant neighborhoods like the ones our members live in that face the worst pollution – and, as a result, high rates of asthma. Even initiatives to reduce environmental impacts affect immigrant neighborhoods negatively. When you approach problems without thinking through how all things are connected, you end up creating a new problem for every problem you solve. For instance, the recent implementation of congestion pricing in Manhattan will provide cleaner air for predominantly white Manhattanites, while likely diverting even more truck and car traffic into the Bronx and other communities of color.
We have always taken a holistic approach with workers at the center. Even before founding the Drivers Co-Op, our team had been looking at legislation to help drivers transition to EVs. The for-hire vehicle fleet of 96,000 vehicles in New York City puts 1.4 million tons of CO2 into the atmosphere every year. That’s the air we breathe and the planet we live on. We support a just transition to electric vehicles because it’s the right thing to do for our planet and because it just makes economic sense. The costs associated with gas-powered vehicles can push drivers into poverty. A switch to electric can help drivers save money on maintenance and fuel and increase their net incomes.
Q: How is the Drivers Co-Op adopting a more climate-conscious approach to its day-to-day work?
A: Rideshare giants have failed to make substantial investments in a green transition, namely supporting drivers with EV costs. The Drivers Co-Op has a real plan, the Community Power Plan to Electrify Rideshare, which includes a commitment to a 100% conversion to electric within five years. It’s the most aggressive – but also the most realistic – commitment to just transition to EVs in this industry. To provide drivers with a pathway to make the transition, we have created an EV Navigator program where drivers help their peers navigate the options for getting subsidies and financing a switch to electric. Our plan also includes two partnerships to provide low-interest and no-interest loans for vehicles from local banks that don’t engage in predatory leasing arrangements. We apply a $1 “Green Transition Surcharge” to each trip, which collects in a savings fund each driver can use to help buy an EV.
Learn more about the Drivers Cooperative and download their new app here.