New York City officials backed off a threat to slap Uber and Lyft with new
The New York City Taxi and Limousine Commission confirmed the arrangement on Wednesday in a statement from the mayor's office.
Uber and Lyft have been locking drivers out of their apps mid-shift in an effort to
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In mid-July, the city's taxi commissioner warned that his agency was working on a tighter set of rideshare pay rules in response to driver lockouts, which he said were "unfair." The deal, however, takes the city's threat of a clamp-down off the table for now. Under the deal, Uber is required to reduce lockouts in August, and Lyft must increase how busy its drivers appear, presumably by increasing lockouts. Both companies would temporarily agree to stop onboarding drivers who they've never dispatched before, and the taxi regulator would not introduce new regulations.
The battle over lockouts is rooted in the commission's six-year-old rideshare pay rule, which requires the companies to compensate drivers for both active driving time and passive time without passengers. The agency calculates non-passenger time as an industry average. When Lyft drivers aren't as busy, for instance, Uber has to increase driver pay because non-passenger time is higher on average. Uber drivers have been busier than Lyft drivers this year, data from the Taxi and Limousine commission shows. But Uber's outsized New York City market share — nearly triple Lyft's — means its numbers weigh heavily on the average.
If Lyft is able to make its drivers appear busy enough by Labor Day, then Uber would consider ending the lockouts for good. If Lyft fails, however, then Uber would pick up where it left off.
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"Our priority is to provide relief to the city's drivers as quickly as possible, without having to go through a lengthy and likely contentious rulemaking process that could prolong their suffering," said Taxi and Limousine Commissioner David Do. "This deal is the shortest possible path towards that relief."
He added that his agency is still preparing a rule package designed to discourage further lockouts, and the commission is "absolutely prepared to introduce that should it become necessary."
Shares of Uber and Lyft both jumped on the news that the commission would not be imposing new pay rules. Uber shares were up 2.9% at 11:54 a.m in New York. Lyft's stock was up 1.8%.
Uber had wanted a company-specific rule so that it didn't have to limit its driver pool in order to comply with the industrywide pay rule, which lumps in Uber's numbers with Lyft's. Uber said it will be able to gradually eliminate the lockouts "now that the city is making sure Lyft isn't free-riding," said Josh Gold, Uber's senior director of policy and communications.
The Labor Day deadline is due to a two-month data lag by the commission in publishing the industrywide utilization rate. By then, Gold said it will be able to see if Lyft has been meeting its new promise in the current period.
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It is not clear how much of a reduction in the lockouts would be acceptable to the Taxi and Limousine Commission.
Bhairavi Desai, president of the city's 28,000-member drivers union, called the deal "a disgrace."
"The City is walking back on its commitment to drivers and letting the companies walk all over the drivers," Desai said. "We reject this give-away and will march forward with our mobilizations until lockouts end once and for all, the loopholes are closed and drivers are paid for every hour worked" with rates that are commensurate with their labor and expenses.
A Lyft spokesperson declined to comment, referring instead to the statement from the mayor's office.
