On Wednesday, July 31, New York City Mayor Adams reached an agreement with ride-hailing companies Uber and Lyft in an attempt to restore driver income by limiting the number of drivers and thereby ending the “lockout” policy imposed by the two companies. However, this move faced opposition from the taxi union and drivers.
According to the Mayor’s office, Mayor Adams, along with NYC Taxi and Limousine Commission (TLC) Commissioner David Do, jointly announced with Uber and Lyft that the two companies have agreed to reduce restrictions on app logins. This practice has caused drivers’ incomes to decrease by half since May.
In a statement, the Mayor said, “Our Uber and Lyft drivers take us where we need to go, and now it’s time to help them earn fair wages.” He further added, “The agreement we’ve reached today will put money back in the pockets of hardworking drivers, allowing them to sustain a living in the greatest city in the world.”
Commissioner Do expressed the city government’s desire to quickly address the current challenges faced by drivers without resorting to lengthy new rule-making processes. He emphasized that this agreement is the “fastest route,” also mentioning the development of robust regulations to curb access restrictions when needed.
As per the agreement, Uber and Lyft will immediately begin phasing out restrictions on driver app usage, aiming to fully stop by Labor Day this year (September 2). One of the conditions is that Lyft maintains a minimum company utilization rate (time drivers spend with passengers) of 50%. This number will decrease proportionally if either Uber or Lyft employs too many drivers online. As part of the agreement, both companies will also stop onboarding new drivers, thus increasing the utilization rate of existing drivers and allowing them to work for longer hours.
However, the New York Taxi Worker Alliance quickly opposed the agreement, calling it a “false concession” and “corporate giveaways,” rather than a “genuine solution.”
Chairwoman of the alliance, Bhairavi Desai, stated in a release that the agreement, firstly, would not take effect until the fall, by which time drivers have already suffered significant losses and cannot afford to wait any longer. Secondly, this year’s lockout behavior will make it appear as if drivers are busier than they actually are, potentially resulting in lower wages for the drivers when new rules are based on this year’s figures in the future.
“This agreement is a double betrayal,” Desai remarked. “It is a complete disgrace.”
She threatened that drivers are prepared to go on strike.
Driving for Uber is also a common choice for many Chinese residents in New York. Mr. Zhao, an Uber driver, told the press that the chances of logging into the app on the day of the agreement were slightly better than the past few days, but he still experienced being logged out frequently. He believes that this agreement highlights a blame game between the NYC Taxi and Limousine Commission and companies like Uber.
“Uber and Lyft blame the TLC for enforcing the lockout, while TLC claims it’s the companies themselves imposing these restrictions on drivers,” he said. “But we believe the root cause of this issue lies in the fact that NYC (TLC) issued licenses for over 10,000 Tesla electric vehicles on the road and then set minimum wage requirements. Consequently, Uber and Lyft couldn’t afford it, leading to the implementation of lockouts.”
Although NYC is proud of its minimum wage policy, claiming a 64% increase in driver income in the first quarter of 2024 compared to 2023, Mr. Zhao stated that he hasn’t received sufficient “minimum wage” in reality. He added, “So whether there is a ‘minimum wage’ or not doesn’t matter; just do away with the lockouts.”