Uber’s Dance with Regulations Leaves Drivers Angered and Panicking
In a sharp response to new city regulations meant to rein in e-hail companies, Uber has told drivers that it will start locking them out of their apps if they are in an area without enough “rider demand.”
Uber said this was in response to the Taxi and Limousine Commission’s minimum payment standard for drivers and the body’s push to limit the number of empty cabs on the road.
Angered by Uber’s announcement, drivers organized a protest on the morning of September 17. Over a thousand drivers formed a caravan and halted rush hour traffic on Brooklyn Bridge and FDR Drive, stretching up to Gracie Mansion, the mayor’s residence. Drivers organised a second protested against these lock-outs in front of the TLC office in Long Island City on October 10.
“Uber figured out the loopholes and exploited them,” said Aziz Bah, an Uber driver and a member of the Independent Drivers Guild, which organized the protests.
The controversy is the latest in a series of conflicts between Uber, its workers, and the city. They come against a backdrop of explosive growth in ride-share vehicles.
Between 2014 and 2019, the number of ride-share drivers in New York City grew six-fold. A TLC study from 2018 found that this growth had significantly increased congestion: almost one-third of traffic in the Manhattan core was e-hail cabs. The study also found that it had cost the drivers. Each driver was getting fewer trips and earning less money. In order to tackle both congestion and falling wages, the TLC earlier this year placed a permanent cap on the number of e-hail cabs in the city and introduced a minimum payment standard for drivers. It also demanded that companies lower the time drivers spent on the road without a ride (their “utilization rate”).
By controlling the number of active drivers, Uber aims to lower its outlays while complying with TLC regulations. If a driver is not online, he is considered not working and therefore does not have be paid.
This kind of response to a new rule is well in line with Uber’s standard practices. “They are very nimble and clever when it comes to working around regulations,” said Eric Goldwyn, an urban transportation professor at NYU.
As of July 2019, Uber has over 75,000 drivers in the city and accounts for about 70% of the ride-hail market. Its closest competitor, Lyft, has 23% of the market and has been following a similar lock-out policy since June.
Despite the driver protest, the lock-outs by Uber went into effect last month. As drivers began to be locked out, many of them expressed a concern that they may not be able to earn enough to continue driving.
The cap put in place by TLC has been in the works for years. It was first proposed in 2015, but delayed after Uber launched an aggressive public campaign against it. As a way to generate opposition, Uber added a ‘De Blasio’ feature to its app to show how much longer wait times would be if the cap was implemented. It also used lobbyists extensively to deter city council members from voting for it. This time around, Uber again spent millions on lobbying efforts — including $6 million between January and June 2019, according to a report by the Commission on Public Ethics — to no avail.
E-hail companies, including Uber, had also fought hard against the TLC’s minimum payment standard for drivers, which was introduced in June 2019. The companies caved after their lawsuit against it was dismissed.
Uber last month filed a lawsuit against the city challenging the TLC cap. Uber said the regulations were based on “a deeply flawed economic model” and threatened the viability of its service.
