Economics in Brief: Uber and Lyft Drivers Stage Nationwide Strike for Right to Unionize
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Economics in Brief: Uber and Lyft Drivers Stage Nationwide Strike for Right to Unionize

(Photo by Dan Gold on Unsplash)

Uber and Lyft Drivers Stage Nationwide Strike for Right to Unionize and Better Pay

Uber and Lyft drivers have staged a nationwide strike under the leadership of Rideshare Drivers United, an organization asking for a fair and sustainable rideshare industry, Bloomberg reports.

Drivers are demanding better pay and pushing for the passage of the Protecting the Right to Organize Act, which would provide workers with the right to unionize. This legislation has passed in the House and awaits a vote in the Senate.

The coalition asked drivers and passengers to boycott the app on Wednesday in major cities including Los Angeles, Boston, Pittsburgh, among others. While there is no official estimate as to how many drivers participated, the Los Angeles Times reports that during the strike Uber was offering $16 bonuses for drivers to pick up rides at LAX.

Rideshare app drivers have long criticized the companies’ policies for years as drivers are labelled as independent contractors instead of employees 一 meaning they do not receive any benefits such as sick leave or health insurance. Workers also pay for their own fuel and car maintenance.

Next City previously reported on The Drivers Cooperative, a driver-owned ride-hailing platform that aims to end the exploitative practices of the taxi industry, and has been operating since May 30. Each driver owns a share of the company, and is able to vote on new leadership and business decisions, Fast Company adds.

The Drivers Cooperative also distributes the profits back to their drivers (not high level executives or shareholders) 一 allowing them to earn 8-10% more on trips than Uber and Lyft drivers.

D.C. Council Votes to Raise Taxes on the Wealthy to Fund Social Programs

A D.C. council voted to raise income taxes on the wealthy, a decision that would generate about $100 million in revenue for use towards issues like affordable housing, The Washington Post reports.

This provision will increase the marginal tax rate to 9.25% for those making $250,0000 to $500,000 annually. Previously, the tax rate was 8.5% for those making between $60,000 and $350,000. For income levels higher than a million dollars, the tax rate would increase from 8.95 to 10.75%. Only 5% of D.C. residents make more than this amount, however.

The council’s 8-to-5-vote will be revisited in August, where the council will finalize the 2022 budget.

Supporters of the tax increase believe that D.C. needs long-term funding in order to address poverty and homelessness in the city. Opponents claimed they felt the proposal was rushed, but did agree with the programs the tax increase would fund.

“We have the wealth and the resources in our city to solve these issues, not just for this fiscal year or next fiscal year but for decades to come,” Janeese Lewis George, a D.C. councilmember and co-author of the tax increase proposal, told the Washington Post.

Black Philadelphians Call for Support to Diversify Unions

Construction and building trade Black workers are calling on Philadelphia to help diversify the union, WHYY reports.

Philadelphia has more than 50 construction labor unions, but only one has a predominantly Black membership. The West Philadelphia Promise Zone’s Workforce and Economic Opportunity Committee hosted a panel where Black workers suggested the city take a stronger tack on union diversity by helping potential Black workers prepare for competency tests, offering mentorship programs, as well as mandating developers employ Black residents on city-funded projects or in community-benefit agreements.

“We have an overwhelmingly Black and brown population and a disportionate amount of our low-income residents are Black and brown. Labor unions in the construction trades are a powerful tool to correct this disparity,” said Soneyet Muhammad, moderator and Promise Zone’s Co-Chair of the Workforce and Economic Opportunity Committee. —Solcyre Burga

Regulators Push Reset on Community Reinvestment Rulemaking

Federal banking regulators announced on Tuesday they will move forward together on crafting a new set of joint rules for enforcement of the Community Reinvestment Act, the 1977 anti-redlining law that requires banks to meet the credit needs of low-income communities.

The announcement effectively rescinds changes made under the Trump administration to weaken those rules.

The changes were pushed through under the leadership of Joseph Otting, then Comptroller of the Currency, an office that shares responsibility for CRA enforcement with the Federal Reserve and the FDIC. Otting’s previous employer, OneWest Bank, paid a fine in 2019 to settle a case for redlining during his tenure as CEO of the bank. He began pushing for changes to CRA rules soon after being sworn into office as Comptroller of the Currency in 2017.

Community development groups, fair housing organizations, racial justice organizations and local policymakers opposed Otting’s proposed rule changes all along the way. They argued his proposed changes would make it easier for banks to comply with the law and potentially reward them for making investments that didn’t actually benefit low-income communities.

The Federal Reserve eventually proposed a different set of rules that community development groups and even some banks said would make more sense for the purposes of the law.

Eschewing the other two agencies, the Office of the Comptroller of the Currency finalized its rules last year, but the Fed and FDIC did not adopt those roles, setting up an unprecedented situation where the banking industry was facing two sets of rules for the same law.

All sides agree that CRA rules need an update, since they haven’t been through a major update since 1995. But now that rulemaking process officially gets a re-do, with all three agencies on board for one set of rules. —Oscar Perry Abello

This article is part of The Bottom Line, a series exploring scalable solutions for problems related to affordability, inclusive economic growth and access to capital. Click here to subscribe to our Bottom Line newsletter. The Bottom Line is made possible with support from Citi.

Solcyre (Sol) Burga was an Emma Bowen Foundation Fellow with Next City for summer 2021. Burga is completing her degree in political science and journalism at Rutgers University, with plans to graduate in May of 2022. As a Newark native and immigrant, she hopes to elevate voices of underrepresented communities in her work.  

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Oscar is Next City's senior economics correspondent. He previously served as Next City’s editor from 2018-2019, and was a Next City Equitable Cities Fellow from 2015-2016. Since 2011, Oscar has covered community development finance, community banking, impact investing, economic development, housing and more for media outlets such as Shelterforce, B Magazine, Impact Alpha, and Fast Company.

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Tags: philadelphiawashington, d.c.los angelespovertytaxesuberunionstaxisride-hailinglyft

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