Examining Corporate Citizenship: How Ride-sharing Companies Respond to COVID-19? What They Promise – and How It Turns Out
Posted on April 6, 2020 by Hank Boerner – Chair & Chief Strategist#an Economic Securities Act #California #CARES Act #CDC #Centers for Disease Control and Prevention #Cities Commuter Activities #CNET #Coronavirus Aid #Doorsah #ESG Investing #Governor Gavin Newsom #Grubhub #JUMP #Lyft #Relief #Ride Sharing #sustainability reporting #Uber #UberEats #University of California Davis #Urban Mobility #Visual Capitalist #WeRise2FightCOVID-19 #Yuyou Chen
G&A Institute Team Note
We continue to bring you news of private (corporate and business), public and social sector developments as organizations in the three societal sectors adjust to the emergency. This is post #12 in the series, “Excellence in Corporate Citizenship on Display in the Coronavirus Crisis” – April 6 2020 #WeRise2FightCOVID-19 “Corporate Purpose – Virus Crisis”
By Yuyou Chen – Sustainability Reporting Analyst Intern at G&A Institute
Just four months after surfacing in Wuhan, China, the Coronavirus has been spread all over the world and affected about 1.3 million people in total to date.
Up until April 6, 2020, the Centers of Disease Control and Prevention (CDC) has reported 330,8919 COVID-19 cases and 8,910 deaths in the United States. CDC has recommended statewide citizens to practice social distancing and working from home.
With less on-site working, there is a sharp decline in the usual daily commuter activity. According to the Cities Commuter Activities report by Visual Capitalist, Los Angeles and New York experienced 95% and 97% reduction respectively in commuter activity respectively over the past three months.
The same thing is happening to the driver’s side. Ride-sharing companies face challenges in keeping their drivers at work.
Uber and Lyft in the Crisis
While some Uber and Lyft drivers who work on a part-time basis refuse to take any orders due to infection concerns, other full-time drivers may still stay on the frontlines to serve travelers for basic needs – or, they will face unemployment.
Ride-sharing, featured with convenient apps and affordable prices, has become a popular mode of commuting among people nowadays. With algorithms matching passengers to nearby drivers, the businesses are operated based on sufficient numbers and balance between commuters and drivers.
Uber and Lyft are two leading North America-based ride-sharing companies, both of which are headquartered in San Francisco, California.
For the past month, ride-sharing companies experienced a slight turndown in the stock market: For Lyft, share prices are down 2.00% (Nasdaq: LYFT); for Uber, down 3.63% (NYSE:UBER).
While each company declares that it puts well-being and safety of employees and customers as priority during the COVID-19 crisis, they set out somewhat differentiated business and risk management strategies.
Similarity: both companies state they enforce cleaning practices among their drivers and partially suspend their operations in some cases.
Looking at Uber
Uber says on their official website that they will temporarily suspend the accounts of riders or drivers who “confirmed to have contracted or been exposed to COVID‑19”.
Uber provides drivers with disinfectants to keep their cars clean for free, with manufacturers and distributors keeping enough cleaning supply. In particular, the surfaces being touched most often should be wiped.
In addition, Uber enforces “no contact” policy in their sub-brand – UberEats – specializing in local food delivery.
With the social distancing order from California Governor Gavin Newsom, the state’s residents are encouraged to work at home.
UberEats expects an increase in demand for food delivery given the less commuting population. To support local restaurant businesses, UberEats waived the delivery fee for more than 100,000 restaurants in North America.
For safety concerns, they allow customers to ask for leaving food at the door by leaving a note in the app. Food delivery companies like Doordash and Grubhub undertake similar policies. UberEats also provides free meals to health care workers, according to JUMP website.
Looking at Lyft
Similar to Uber, Lyft also says in their official website that they will distribute hand sanitizers and other cleaning supplies to their drivers.
Further, to comply with California state order of social distancing, Lyft paused shared riding in all metropolitan markets, including San Francisco and Los Angeles. They also enforce cleaning activities in their bikes and scooters.
Lyft has established the COVID-19 fund to help drivers who are diagnosed with the Coronavirus disease survive the individual quarantine. (Uber also builds an employee relief fund for impacted restaurant workers.)
However, it turns out that Uber and Lyft are unable to guarantee their sick leave compensation at this moment, according to CNET reporting.
What Is Happening With the Local Drivers?
CNET recently spoke with three Uber drivers and one Lyft driver — all from San Francisco — who exhibited COVID-19 or other disease symptoms and had asked for paid leave. All of them said their companies need an extended period of time to review and process requests for sick leave.
Similar situations are reported to be happening in New York, Illinois and Washington State.
According to The Washington Post, such delay in unemployment aid issuance resides in the fact that “gig” workers are categorized as independent contractors.
In contrast to full-time laborers, they are not eligible for unemployment benefits such as paid leave and health insurance under the current U.S labor system. Without guaranteed labor protection, the Coronavirus has been posing a threat to their economic survival.
While the U.S. Congress and local government officials seem to be progressing to list self-employed labors to be protected under the Coronavirus Aid, Relief, an Economic Securities (CARES) Act, the realization of unemployment benefit issuance still depends on the corporate themselves.
The Coronavirus infections are increasing at this moment, and the spread across the United States is projected to slow down no earlier than the next two months. It will certainly further affect the economy of the ride-sharing companies financially.
While struggling to maintain financial stability, the ride-sharing companies still need to spend time prioritizing drivers and customers’ interests and concerns in facing up the unprecedented challenge.
In the midst of bad news, a glimmer of good news: The Coronavirus is stressful to all of us, of course, but viewing it from an environmental perspective, the nation’s overall GHG emission would be reduced due to such a large decline in commuting all over the United States.
* * * * * * * *
About the Author
Yuyou Chen works as a Sustainability Reporting Analyst Intern at G&A Institute. She is currently a senior working towards a B.S in Environmental Science and Management and a B.A in Economics at the University of California, Davis. She is interested in ESG investing, Sustainability Reporting, and Urban Mobility. She had previous internship experience in a British environmental consulting firm where she engaged on research and analysis of an eco-labeling project for a China paper making company.