The Taxi and Limousine Commission proposed changes to its minimum-pay formula that it says will boost driver pay — and keep Uber and Lyft from locking drivers out to keep pay low.
TLC Commissioner David Do came out swinging at a virtual meeting of the agency Wednesday, calling the rideshare companies’ practice of freezing drivers out of the app “harmful, unnecessary and unacceptable.”
“We saw the [Uber and Lyft] locking out drivers in the middle of their shifts with no idea when they would be allowed to work again,” he said. “We saw reports of drivers being told to drive to busier areas — even areas where surge pricing was happening — only to still be denied access [to the app].
“Imagine being told to come to work, then only being told that, ‘You cant work, but we won’t even pay you for showing up,’” he added.
Uber and Lyft came under fire last year for locking drivers out of their apps in an effort to control their so-called “utilization rate” — the percentage of the time that a driver is logged onto the app and carrying a paying passenger instead of logged in without a fare.
Under the TLC’s minimum-pay rules, drivers are currently due more pay from the rideshare apps if the industry-wide utilization rate drops below 53% — a figure both Uber and Lyft sought to control by keeping drivers from logging on to the app in the first place, often for hours at a time.
During Wednesday’s hearing, TLC officials said they would be throwing out the utilization data from after May 2024, considering it “manipulated” by the app lockouts.
In response, the TLC said it’s proposed rule changes would require apps to notify drivers of any lockouts 72 hours in advance, and that any lockouts would be prohibited within 16 hours of a driver logging on to the app.
The TLC’s minimum pay formula assesses pay due to drivers for both hours worked and miles traveled.
The proposed update includes an 87-cent per-mile rate, 10.4% higher than the current 79-cent rate. It also proposes adding a separate utilization-rate calculation to the distance-traveled formula, requiring additional pay should distance with a passenger fall below 68.5% of the distance an Uber or Lyft driver travels.
In all, said Russell Glynn, TLC’s director of policy research, a driver would see a nearly 6% pay increase in a sample 7.5-mile, 30-minute trip.
The new rules would also allow the TLC to propose utilization-rate changes whenever it felt trip data supported it — rather than once a year, as allowed under the current rules.
The new rules will need to be voted on by the TLC commissioners before they go into effect, and may yet be changed before they’re brought to a vote. Any pay increase as a result of the rules is separate from the expected annual inflation adjustment scheduled for March, in which drivers are expected to get a 3.92% raise.
Representatives from Lyft and Uber expressed their opposition to the plan Wednesday.
“However well-intentioned, the proposed rules reinforce a flawed approach to driver pay that pressures rideshare companies to use lockouts to maintain utilization rate,” Jerry Golden, chief policy officer at Lyft, told the commission.
If the new rules went into effect, Golden said, Lyft would “have to remove the equivalent of over 1,200 full-time drivers to maintain 2024 utilization rates.”
Josh Gold, a spokesman for rideshare giant Uber, said New York City drivers were already well paid.
Gold called TLC’s proposal to make utilization-rate changes throughout the year “arbitrary and capricious,” and said the agency’s rate formula was based on “miscalculations.”
“If [it’s] not corrected,” the Uber spokesman said, “the courts will step in.”