Ride-hail companies Uber and Lyft have stopped accepting new drivers on their respective platforms in New York City. The city has passed new rules to limit the accelerated growth of ride-hailing/sharing companies.
On Uber’s website, they attribute the new policy to “new [Taxi and Limousine Commission] regulations.” (To find Lyft’s notice about not accepting new drivers, you have to go through the new driver sign-up process) This is a reference to legislation passed by the New York City Council in December 2018; which requires ride-hail companies to pay drivers a minimum of $17.22 an hour after expenses. The pay formula uses a “utilization rate,” which accounts for the share of time a driver spends with passengers in their vehicles versus the time spent idle.
The purpose is to penalize companies for running too many cars without passengers on city streets, thus adding to traffic as well as emissions.
When a company has a high utilization rate, the less it is forced to pay drivers to meet the wage floor requirement. The new rules were intended to increase pay for drivers, while also addressing the overly saturated market in NYC.
Critics complain that Uber and Lyft have been allowed to dominate the market without having to follow the same rules that apply to yellow cabs.
Uber stopped onboarding new drivers in New York City on April 1st, followed soon after by Lyft.
“As drivers exit the industry and demand from riders increases, we will once again seek to add new drivers,” an Uber spokesperson said.
“Because of TLC regulations, we’re currently not accepting new drivers in New York City,” Lyft said. “We do have a waitlist and will let drivers know when they can apply to drive.”
