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Uber locks out NYC drivers to avoid paying for ‘idle time’

Uber is reportedly banning New York City drivers from its app during periods of low demand in an effort to lower the minimum wage, a move rival Lyft is considering doing the same.

Last month, Uber began locking drivers out of its app’s system to limit how much the company pays drivers for idle time when they’re not picking up passengers.

Uber drivers in New York are furious about the move, saying their income has fallen by as much as 50%. According to Bloomberg News.

Nikoloz Turukidze, a full-time Uber driver, told the outlet that he gets locked out of the app four or five times a day.

“Before, I used to work 10 hours and earn $300 to $350,” Turukidze said. “Now, I work 10 hours and earn only $170. I’m very disappointed. I’m paying for gas and I’m not making any money.”

Uber is reportedly locking out drivers to avoid paying the city’s minimum wage. Christopher Sadowski

Uber’s move is a response to rules issued six years ago. New York City Taxi and Limousine Commission According to this, ride-sharing apps will have to pay drivers a minimum amount during idle periods to cover expenses.

According to the TLC, Uber and Lyft must follow what it calls a “minimum pay formula per trip” that takes into account “drivers’ total work time,” which includes “not only the time they spend transporting passengers, but also the time they spend waiting for a ride and then picking up a passenger.”

TLC uses a formula that divides the time a driver spends transporting passengers on trips dispatched from the base by the total time the driver is available to accept dispatches.

The result is called the “utilization rate.”

The longer a driver waits to pick up a passenger, the more Uber and Lyft will have to pay to meet the TLC-mandated minimum fare.

Because TLC calculates wait times based on industry averages, it would require Uber, the dominant player in the market, to pay Lyft drivers extra when they are waiting.

Drivers who make their living through ride-sharing apps like Uber and Lyft say their wages are falling. Reuters

Uber, which has three times as many drivers as its main competitor, argued that it was unfair to be asked to pay Lyft more because it has fewer customers.

“The city’s rules bizarrely hold Uber responsible for Lyft’s failures,” Uber spokesman Freddie Goldstein told the Post. “Lyft is struggling to find drivers and has no choice.”

A Lyft spokesperson issued a statement to The Washington Post slamming TLC.

“New York City’s current pay formula is broken because it measures utilization in a way that penalizes drivers rather than favors them,” the company said in a statement. “It forces ride-sharing companies to limit when drivers can earn money, and therefore how much they can earn.”

Multiple drivers He told Bloomberg News The Uber lockout has resulted in a huge drop in their take-home pay.

Lyft said it will soon “have to start” locking drivers out of the app during periods of low demand. AP

“I worked 10 hours a day and earned $300 to $350,” Nikoloz Turukidze said.

“Right now I’ve only worked 10 hours and barely made $170. I’m so disappointed. I’m paying for gas and I’m not making any money.”

Bhairavi Desai, president of the New York Taxi Workers Alliance, an organization that represents 28,000 drivers in the city, told Bloomberg that Uber had “mismanaged” hiring by accepting too many drivers onto its platform.

Uber’s sign-up website for prospective drivers includes a disclaimer that reads, “As of April 1, 2023, we are restricting new sign-ups for paid vehicle drivers in New York City, primarily due to TLC availability restrictions.”

The company is calling on potential drivers in New York to sign up for a waiting list.

Desai accused Uber of using the TLC wage rules to “game the system by taking away hours that should be paid by law and leaving them unpaid.”

Uber protested rules issued six years ago by the Taxi and Limousine Commission that calculate minimum wages for drivers during periods of leave. Christopher Sadowski

In an email sent to drivers on June 14, Lyft said it would soon “need to” lock drivers out of the system, according to Bloomberg News.

The company blamed Uber, saying its larger rival “wants to change the rules so Lyft is punished.”

“Uber and Lyft’s recent restrictions on access are completely unacceptable,” TLC Commissioner David Dorr told the Post.

“Nobody is forcing them to do this.”

Du said Uber and Lyft are “billion-dollar companies” that are “making a calculated decision to remove the city’s hard-working drivers from their apps so they can avoid paying them higher wages under minimum wage regulations.”

“We are working with stakeholders to improve access, but let me be clear: Uber and Lyft need to do a better job of managing their recruitment of new drivers,” Du said.

Last year, a Manhattan judge blocked a planned pay increase for ride-share drivers after Uber sued the TLC to prevent the increase from going ahead.