Uber Technologies Inc (NYSE: UBER) and Lyft Inc (NASDAQ: LYFT) have long faced controversy over how they treat their drivers. For this reason, many are unsurprised by the number of new ride-hailing apps that promise to treat drivers better than the two giants.

One such app is Alto. The company, which is in Dallas, stands out from Uber and Lyft as it gives drivers annual compensation. Furthermore, it hires its drivers as employees rather than as contractors.

Other companies are Wridz in Austin, Texas and Empower in Virginia, which give drivers 100% of the cab fares. The New York Drivers Cooperative also states that it will share profits with its drivers.

New companies provide benefits to drivers 

One complaint made by Uber and Lyft drivers is that the platforms overcharge them. Another common complaint is that the apps list them as contractors to deny them the benefits of being full-time employees. The pandemic negatively impacted many drivers as fewer people were interested in travelling.

As a result, many drivers sought unemployment benefits which paid more than driving. Others opted to go into grocery and food delivery, while others sought alternative employment. This resulted in a shortage of drivers creating a new power dynamic between the ride-hailing companies and drivers. The companies sought to create incentives to encourage drivers to come back to work, which was mostly unsuccessful.

The new companies have to attract customers

While the new companies might offer satisfaction to their drivers, it might be challenging to compete with established companies like Uber and Lyft. To gain a good market share, the companies will have to perform well. Fortunately, many have managed to keep drivers happy while encouraging them to commit to high standards.

Although drivers are happy with moving to new companies, the challenge for the newcomers would be attracting customers as many prefer to hire more familiar services. Additionally, Uber and Lyft have also made efforts to increase driver satisfaction. For instance, they have made it easier for drivers to know the fare they would be getting before picking up a rider.

Alto tries to treat its drivers fairly. It gives them health care and hourly rates. A ride in luxury vehicles also costs more than a regular Uber ride.