Driving for Uber may get a little harder starting next Tuesday afternoon. That is when the ride-hail giant will introduce a policy that will limit when drivers can work from its app.
“Starting Tuesday, Sept. 17, rider demand will determine how many drivers can be online at the same time,” Uber announced in a memo to drivers that went out today at 1 p.m. “This means you may not always be able to go online if there aren’t enough riders requesting trips in your area.”
The memo explains that the change is being made partly in reaction to new rules implemented by the Taxi and Limousine Commission—and partly because of a change Lyft made several months ago in response to the city’s new minimum-wage rule.
Starting at the end of June, Lyft barred drivers from going on its app if they were cruising in areas where few people were demanding rides. They could, however, drive to a busy area and try to get on the app once they arrived.
The policy angered drivers, some of whom say it has cost them flexibility in their schedule and cut into their earnings. Uber is hoping to deflect that anger by letting drivers reserve some time slots in advance; they would be allowed to get on the app wherever they are during those time periods.
Uber Pro “diamond” drivers—those who have earned a set number of points in a company rewards program—are exempt from the new rule, as are drivers of wheelchair-accessible vehicles.
Those provisions may not be enough to put drivers in a better mood.
“For months we warned that if the city failed to take enforcement action against Lyft for cheating on the pay rules, that the other apps would follow suit,” said Brendan Sexton, executive director of the Independent Drivers Guild, in a statement. “Already thousands of drivers are struggling to pay their bills and working longer and longer hours because Lyft is blocking them from the app.”
The IDG, a Machinists Union affiliate, receives funding from Uber.
Both Lyft and Uber are dealing with a congestion-fighting minimum-wage formula that rewards companies for keeping their vehicles occupied and their drivers busy. The more fares a driver collects in an hour, the less Uber or Lyft needs to contribute to make sure the driver earns at least $17.22 an hour after expenses.
Lyft has argued that the formula benefits Uber, which, as the leading ride-hail operator, attracts more rides and therefore has to contribute less per hour to its drivers’ pay.
Uber said in June that Lyft’s policy would send idle drivers over to Uber—lowering its utilization rate and forcing the company to fork over more money.
Both companies also have objected to additional requirements recently passed by the Taxi and Limousine Commission that will reduce the amount of time vehicles are allowed to cruise empty in Manhattan’s central business district.
Uber and Lyft say the new rules are pushing drivers to search for fares in already congested neighborhoods such as Midtown and Downtown Brooklyn—and pulling them away from less dense areas that often have fewer mass-transit options.
“Time and again we’ve seen Mayor de Blasio’s TLC pass arbitrary and politically-driven rules that have unintended consequences for drivers and riders—despite objections from City Council members, transportation experts, editorial boards and community groups,” an Uber spokeswoman said in a statement. “We stand ready to work with governments to help cities, riders and drivers through policies like congestion pricing, the only evidence-based plan to reduce traffic and fund mass transit.”
The Taxi and Limousine Commission rejects Uber and Lyft’s arguments, pointing out that its data show ride-hail trips continuing to grow in northern Manhattan and the outer boroughs even after the new rules were put in place. In addition, wait times have decreased, according to the agency.
“Until we took needed action last year, it has been Uber and Lyft’s business model to oversaturate the market while promising drivers that they could succeed despite these companies’ stacking the deck against them,” acting TLC Commissioner Bill Heinzen said in a statement. “The TLC and City Council put in place smart policies to address the problems these companies created, and they are finally being forced to experiment with ways to run their businesses in an environment of accountability. These companies must be reminded that drivers are crucial to their continued success.”
SOURCE: Section Page News – Crain’s New York Business – Read entire story here.