PYMNTS MonitorEdge May 2024

Uber Responds to NYC Minimum Pay Rule With Driver Lockouts

Uber has reportedly been locking out drivers from its app during periods of low demand over the past month in response to New York City’s minimum pay rule.

Lyft is threatening to adopt the same strategy, Bloomberg reported Monday (June 24).

This move is in response to a 6-year-old pay rule in New York that requires companies like Uber and Lyft to compensate drivers for idle time between rides, according to the report.

Uber said that the lockouts are necessary to limit non-passenger time, per the report.

Since the lockouts began, some drivers have experienced a decline in their earnings by as much as 50%, the report said. The unpredictability of these lockouts makes it challenging for drivers to plan their work shifts and treat driving for Uber or Lyft as a full-time job. The lockouts can last for over an hour.

Uber said that the lockouts are a response to the minimum wage rule imposed by the New York City Taxi and Limousine Commission (TLC), according to the report.

Both Uber and Lyft have blamed each other and the TLC for the lockouts in their communications with drivers, the report said. Uber has encouraged its drivers to lobby regulators for a rule change, while Lyft has accused Uber of wanting to change the rules to disadvantage Lyft.

The New York Taxi Workers Alliance, representing 28,000 professional drivers in the city, has criticized Uber for mismanaging driver hiring and using the TLC regulation as an excuse to avoid paying drivers for their time, per the report.

This is not the first time Uber and Lyft have clashed with regulatory bodies. In 2019, the two companies engaged in a lockout war when the city attempted to implement a flat minimum pay rate equivalent to the minimum wage, according to the report. Similar conflicts have occurred in other cities, such as Minneapolis and Austin, where the companies threatened to cease operations in response to proposed regulations.

A growing number of cities and countries are adopting labor laws and regulations that make it hard to give work to people who have unpredictable portions of their time available to do these jobs, PYMNTS’ Karen Webster wrote in an article posted Monday.

These rules create extra costs that platforms must pass on to consumers.

“That will make the gig experience — which consumers all over the world like and use — more expensive and less accessible thanks to government regulation,” Webster wrote.