Uber and Lyft are banning New York City drivers from their apps to avoid paying millions of dollars in compensation, according to a report.
Rideshare app drivers have been locked out of the two apps for minutes to hours at a time, with flashing “Unable to go online” messages or telling drivers to go to crowded areas. There is.
According to Bloomberg, the lockout is an attempt to make Uber and Lyft drivers look busy on paper by convincing cities not to raise key parts of the minimum wage during annual reviews. Bloomberg reports that it could save nearly $30 million in salaries. Report.
The report says frequent, unannounced lockouts have left Big Apple drivers scrambling to feed their families.
Uber and Lyft told drivers that New York City’s Taxi and Limousine Commission regulations force them to “limit access.”
“Bloomberg’s description of the lockout as a loophole was inaccurate and we requested a correction,” Josh Gold, an Uber spokesperson, told the Post in a statement.
“The truth is that lockouts have been a feature of terrible but intentional pay regulations since the TLC passed in 2018. That’s why we have been saying for years that the TLC should abolish this outdated approach. I kept saying that.”
TLC’s minimum wage rules for rideshare drivers are not a fixed fee like other laws, but a complex formula that takes into account factors such as travel time and time spent with passengers.
An important aspect of minimum wage rules is occupancy. Occupancy is a measure of the amount of time drivers spend with passengers.
The current percentage is 58%. This assumes that for every 100 minutes a driver works, 58 of those minutes are spent interacting with passengers and the rest are spent finding a ride.
The higher the usage rate, the lower the minimum fare per trip.
For example, if TLC raises fares, fares will fall and companies will be forced to make up the difference to meet minimum wage regulations for drivers.
Rideshare drivers are paid for the time they spend driving between trips.
When drivers were locked out of the app, their time was not tracked or paid for. As a result, Uber and Lyft were able to avoid paying drivers for this downtime, the report said.
“The current pay structure still requires lockouts, which means drivers continue to be limited in the hours they can earn, passengers continue to wait longer to reach their destinations, and Lyft continues to operate as New Yorkers expect “We will no longer be able to provide our services in a manner that allows us to do so,” Lyft spokesperson CJ Macklin told the Post in a statement.
“This terrible experience is why we don’t introduce lockouts except in these unique circumstances, and why we need a long-term fix.”
Drivers are having to spend more time on the road to replace lost income during unannounced and sometimes long-term lockouts.
The lockouts occurred nearly every hour of the day and affected more than 800 drivers, according to a Bloomberg analysis of more than 5,300 screenshots and interviews with about 120 drivers.
Lockouts during peak periods led to higher fares due to a lower supply of available drivers.
The investigation found that dozens of rideshare drivers, who worked as independent contractors rather than employees, had defaulted on taxes, car loans, rent and credit card payments.
“This is a monkey business,” Mohamed Mohamed, a rideshare driver who uses both Uber and Lyft, told Bloomberg. “You’re ready to work, but they tell you, ‘No, we’re not going to work right now.’ There are many days when I feel depressed. ”
Michael Reich, a labor economics professor at the University of California, Berkeley, helped design the city’s pay model.
“It’s outrageous, it’s stressful and, as far as I know, it’s unprecedented in the history of labor. There’s just no notice saying ‘you have to leave’ and no telling them when you’re coming back.” There isn’t,” Reich said. Bloomberg. “I have never heard of such disrespect and disrespect for these workers.”
“As the paper calls for, we are taking steps to increase utilization,” Gold told Bloomberg.
Former taxi drivers are leaving the industry in favor of Uber and Lyft. Uber and Lyft promised drivers flexible hours so they could be home in time to pick up their children, only to suddenly find themselves unable to support their families.
Not only was the lockout unpredictable, but the instruction that followed was equally strange.
Uber shows locked-out drivers “open access” hours (odd early morning and late night hours), but a Bloomberg study found that a significant percentage of drivers are also locked out of the app during those hours. It turned out that there was.
Some Lyft drivers were also shut out in New Jersey, where New York City’s minimum wage rules do not apply.
Uber and Lyft didn’t like the lockouts and argued they had to issue them because of the TLC Act.
However, a Bloomberg investigation found this to be false.
Rather, Uber and Lyft had implemented lockouts to prevent TLC from lowering their occupancy rates during their annual review—a drop of just 1% would have cost the companies an additional $29 million in driver wages. Because you will have to pay.
A private agreement between the rideshare company, the mayor and TLC appears to have ended the lockout since early September, according to the report.
But the New York Taxi Workers Alliance argued that the private agreement was an example of duopoly and collusion to artificially inflate ridership rates ahead of the annual review.
