The ongoing conflict between ride-sharing giants Uber and Lyft and the New York City government highlights the complex issues of economic interests, labor rights, and regulatory oversight. 

Uber has already imposed locking city drivers out of its app during low-demand periods, while Lyft has also warned of doing the same, and they attributed their actions to a contentious pay rule set by the New York City Taxi and Limousine Commission (TLC). 

Uber Restricts Access for New York City Drivers

Uber is restricting access to its apps for New York drivers, citing the city pay regulation as the cause. Over the past month, Uber has implemented intermittent lockouts for its drivers in New York City during periods of low demand, with Lyft threatening to follow suit. 

Engadget reported that both companies attribute their actions to TLC's pay rule. Implementing this rule, which aims to ensure that companies compensate drivers during idle time between rides, has sparked anger among drivers.

Some driver unions are even considering strikes if these lockouts persist. The lockouts came from a six-year-old NYC pay rule that mandates ride-sharing platforms to compensate drivers for idle time between passenger pickups.

While this measure reduces Uber's payout, it significantly reduces drivers' earnings for the same amount of working hours. Moreover, drivers are left uncertain about when they might lose access to the app during their shifts.

Read Also: NYC to Require Uber, Lyft to Have Zero-Emissions Fleet by 2030

Impact of TLC Rule on Ride-Sharing Companies

Uber and Lyft urged drivers to oppose the regulation. In a recent email to drivers that Bloomberg acquired, Uber told them to "let the TLC know the effect their rules have had" on their earnings.

The rule affects Uber and Lyft differently, contributing to their ongoing blame game. Uber drivers have been busier this year, making its data more influential in setting the city's average minimum-pay limits. 

As Lyft struggles to keep its drivers busy, Uber faces increased responsibility for meeting these city-imposed standards, leaving the company with limited options to manage the situation effectively. On the other hand, Lyft sees the situation from a different perspective. 

In a June email to drivers, Lyft noted that Uber aims to alter the rules to penalize Lyft. According to Lyft spokesperson CJ Macklin, the existing NYC pay formula is flawed, compelling rideshare companies to restrict drivers' earning opportunities and subsequently limiting their potential income.

A drivers' union blamed Uber's over-hiring for the current issues. Bhairavi Desai, president of the New York Taxi Workers Alliance, criticized the company for allowing too many drivers to join, leading to financial strain on the workers. 

She accused Uber of exploiting the TLC's pay rule to avoid paying drivers for their idle time, which should be compensated under the law. Desai noted that the union might conduct a strike if the situation does not improve.

Lyft has not started locking out drivers, but it may follow suit soon. The company previously warned drivers that it might have to implement similar restrictions. This situation in NYC is part of a larger pattern of conflicts between ride-sharing companies and city regulations nationwide. 

In 2019, Uber and Lyft conducted similar lockouts in response to a flat minimum wage requirement for drivers, which continued until the following spring. Earlier this year, both companies threatened to withdraw from Minneapolis after the city attempted to enforce a driver pay raise to match minimum wage rates.

Related Article: Uber Files Lawsuit Against NYC Taxi Commission to Prevent Rate Hikes for Drivers