Two major ride-hailing services are no longer accepting new drivers in New York City. Uber stopped hiring new drivers on April 1, while Lyft followed suit on April 19.
In a post on its website, which sadly did not make much rounds, Uber said its new hiring policy is related "in part to new TLC regulations."
As Politico reports, a knowledgeable source notes that by "regulations," Uber is referring to New York City's new wage rules. Lyft's reasons for halting new drivers seems to be the same, according to the report. TLC refers to the Taxi and Limousine Commission, the governing body that regulates the city's rideshare and taxi industry.
Uber And Lyft's Freeze Hiring
Uber and Lyft's decision follow the city's new wage floor implementation for rideshare drivers, which both companies strongly opposed. The TLC passed new regulations in December 2018 that penalize rideshare companies for running more cars on the street than the existing demand. In January, Uber and Lyft sued the city over the new regulations.
New rules now require Uber and Lyft drivers earn at least $17.22 an hour after expenses. If there are too many drivers on the road and not enough passengers, drivers are projected to earn far less than that minimum wage. As Politico notes, the higher a company's utilization rate, the less it has to pay drivers to meet the new wage floor requirement.
"[That] means they have to keep current drivers busy, so it may be an indication they are unable to keep current drivers as busy as they need to," according to Meera Joshi, one of the people who helped developed TLC's new rules.
New Rules
Drivers have earned $56 million more than they would have typically since the rules came into effect, according to a city presentation held earlier this month.
The hiring freeze won't be permanent, though. Uber and Lyft both plan on hiring new drivers again once their driver pool dips too low. Engadget notes that given 11 percent of new Uber drivers quit in a month and nearly half quit within a year, new hires might come rushing in sooner rather than later.
"We do have a waitlist and will let drivers know when they can apply to drive," according to Campbell Matthews, a spokesperson for Lyft.
"As drivers exit the industry and demand from riders increases, we will once again seek to add new drivers," according to Josh Gold, a spokesperson for Uber.
