New York City Sets New Minimum Pay Standards for Rideshare Drivers

The finalized rules, established by the city’s Taxi and Limousine Commission (TLC), are also aimed at curbing the practice of Uber and Lyft temporarily locking drivers out of their apps to control costs. The TLC board is scheduled to vote on the regulations on June 25, per the agency’s website.

Uber and Lyft strongly resisted the original wage hike, cautioning that the change would force them to raise fares for customers. Following Bloomberg’s coverage of the pending rules, Lyft’s stock price fell by as much as 3.3%, hitting session lows, while Uber’s shares gave back most of earlier gains after initially rising up to 2.3%.

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Per Bloomberg, Uber began implementing random driver lockouts in May of the previous year, a move that was soon mirrored by Lyft. What sets New York’s pay rules apart is their inclusion of compensation for drivers not only during active trips but also for the time spent traveling to pickups and waiting for dispatches. While Uber and Lyft initially defended lockouts as limited to periods of low demand, Bloomberg’s subsequent investigation uncovered that such lockouts happened throughout the day and night, imposing financial strain and mental stress on many full-time drivers. This widespread issue attracted scrutiny from both city and federal officials, prompting the TLC to address the regulatory gap that permitted these lockouts.

Read more: Uber Faces Regulatory Heat as FTC Targets Subscription Practices

In their challenge to the pay increase, Uber and Lyft questioned the TLC’s assumption that vehicles depreciate completely after five years, necessitating higher maintenance or replacement costs. The commission acknowledged that while older, high-mileage cars continue to be intensively used for rideshare purposes, they still maintain residual value.

Lyft spokesperson CJ Macklin commented on the revised proposal, stating, “It’s good to see the TLC listened to some concerns and tweaked” the plan. However, Macklin also expressed ongoing reservations, suggesting the pay formula might still limit drivers’ earning potential, push up rider costs, and reduce ride availability — outcomes she said would be detrimental, especially for drivers reliant on consistent work.

Bhairavi Desai, executive director of the New York Taxi Workers Alliance, which represents 28,000 members, welcomed the updated regulations. She emphasized that “job security is a big issue for drivers” and acknowledged that more progress is needed to improve compensation given the demanding hours and risks drivers face. Her organization, which actively protested the lockouts last year, has recently supported a local bill aimed at increasing transparency around driver deactivations by rideshare companies.

Source: Bloomberg