Uber and Lyft have stopped accepting new controllers in their respective platforms in the city of New York, Political reports . The move comes after the city passed new rules that are designed to stop the explosive growth of horseback riding companies.
On its website, Uber attributes the new policy to "new regulations [Taxi and Limousine Commission]". (To find Lyft's warning about not accepting new drivers, I had to go through the registration process as the new driver). This is a reference to legislation passed by the New York City Council in December 2018, which requires large-scale transportation companies to pay drivers at least $ 17.22 per hour after expenses. The payment formula uses the so-called "utilization rate", which represents the part of the time a driver spends with passengers in their vehicles compared to the time spent inactive and waiting for a fare.
The rules penalize companies for driving too many cars without passengers on city streets. The higher the rate of use of a company, the less you will have to pay drivers to meet the new wage floor requirement. The rules aimed to increase the payment for drivers, while addressing what many considered an oversaturated market in New York City.
In that sense, today's news suggests that the rules are having the desired effect. The salary rule was approved several months after the city council approved a new vehicle cap for Uber and Lyft in hopes of reversing the worsening traffic congestion. That rule does not affect the ability of Uber and Lyft to incorporate new drivers; it simply restricts the amount of vehicles that can be used to pick up passengers.
While it is very popular with passengers, Uber and Lyft have been a source of almost constant pain for policymakers, disability advocates, taxi drivers and labor groups. Critics complain that Uber and Lyft have been allowed to dominate the market without having to follow many of the same rules that apply to yellow taxis. This has led to a large number of drivers that has exceeded demand, reducing wages and increasing traffic congestion. At that time, the New York City law limiting the number of drivers was considered a potential model for other cities that want to control the car travel industry.
Uber stopped incorporating new drivers in New York City on April 1. followed soon after by Lyft. In January, Lyft sued the city to block the new salary rules, arguing that they would create an unequal playing field and that, ultimately, it would mean that their own drivers would receive a lower payment. Three weeks later, Uber sued the city for the limit of the new riders.
"As drivers leave the industry and the demand of users increases, we will again seek to add new drivers," said a Uber spokesperson.
"Due to FTA regulations, we are not currently accepting new drivers in New York City," said Lyft. "We have a waiting list and we will let drivers know when they can request driving."