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Uber Bans New York City  Drivers Over Pay Rule; Lyft Threatens to Do Same

  • Uber has already locked off New York City drivers from its app.

Uber has already locked city drivers out of its app during low-demand periods, and Lyft has threatened that it would do the same, citing a contentious pay rule established by the New York City Taxi and Limousine Commission (TLC).

Uber Restricts Access to New York City Drivers

Uber is limiting access to its applications for New York drivers, citing city pay regulations as the reason. Over the last month, Uber has adopted intermittent lockouts for its drivers in New York City during periods of low demand, with Lyft threatening to follow suit.

Engadget said both corporations attributed their decisions to TLC’s compensation guidelines. Implementing this legislation to ensure that companies compensate drivers for idle time between rides has provoked outrage among drivers.

Some driver unions are even considering strikes if the lockouts continue. The lockouts resulted from a six-year-old New York City pay ordinance requiring ride-sharing platforms to compensate drivers for idle time between passenger pickups.

While this policy reduces Uber’s payout, it drastically lowers drivers’ earnings for the same number of working hours. Furthermore, drivers are confused as to when they may lose access to the app during their shifts.

Impact of the TLC Rule on Ride-Sharing Companies

Uber and Lyft urged drivers to resist the regulations. In a recent email to drivers that Bloomberg obtained, Uber instructed them to “let the TLC know the effect their rules have had” on their profits.

The restriction impacts Uber and Lyft differently, adding to their ongoing blame game. Uber drivers have been busier this year, so their data is more influential in determining the city’s average minimum wage limits.

As Lyft struggles to keep its drivers occupied, Uber bears more accountability for following the city’s rules, leaving the corporation with few choices for efficiently managing the problem. Lyft, on the other hand, sees things differently.

In a June communication to drivers, Lyft stated that Uber plans to change the rules to penalize Lyft. According to Lyft spokeswoman CJ Macklin, the current NYC pay formula is incorrect, forcing ridesharing providers to limit drivers’ earning prospects and hence their potential revenue.

Uber’s current problems, according to a drivers’ union, are the result of over-hiring. Bhairavi Desai, head of the New York Taxi Workers Alliance, blasted the corporation for allowing too many drivers to join, putting financial hardship on the workers.

She accused Uber of manipulating the TLC’s pay guideline to avoid paying drivers for idle time, which is required by law. Desai stated that the union may go on strike if the situation does not improve.

READ MORE: New Samsung Galaxy Watch 7 & Ultra: Release Date, Specs & Price

Lyft has yet to lock out drivers, but it may do so soon. The business has previously warned drivers that similar limitations may be implemented. This situation in New York City is part of a larger pattern of confrontations between ride-sharing corporations and city authorities across the country.

In 2019, Uber and Lyft staged similar lockouts in reaction to a flat minimum pay requirement for drivers, which lasted until the following spring. Earlier this year, both firms threatened to leave Minneapolis after the city attempted to impose a driver pay increase to match minimum wage levels.

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