To get around New York City’s minimum wage rules, Uber (NYSE:UberThe company is blocking drivers during off-peak hours, resulting in reduced hours and pay for drivers, Bloomberg reported Monday.
Uber (UBER) says it will take action It stems from a six-year-old New York rule that requires ride-sharing companies to pay drivers for idle time between rides. The New York City Taxi and Limousine Commission (TLC) calculates driver compensation for non-passenger time based on industry averages, including Lyft (Blessing) and New York Taxi Driver. So when demand for Lyft (Blessing) declines and non-passenger time increases, Uber (Uber) was forced to increase driver pay for non-passenger time, thereby making Uber (Uber) Pay more due to lack of demand for Lyft (Blessing) driver. To compensate, Uber (Uber) is now eliminating driver time spent on non-passenger time.
“Oddly, the city’s rules hold Uber responsible for Lyft’s failure,” Uber spokesperson Freddi Goldstein told Bloomberg.
The company acknowledged the need for lockdown periods and claimed they were based on passenger demand at any given time. If demand falls below the supply of available drivers, the app will temporarily lock drivers away. But for motorists, lockdown periods can occur multiple times throughout the day, sometimes as long as an hour. As a result, the lack of ongoing employment has a negative impact on earnings and makes it financially impossible for some people to work for the company.
The latest measure comes in a bid to counter New York City’s tightening regulations against ride-sharing companies. In 2018, New York City officials passed legislation requiring ride-sharing companies to pay drivers a minimum wage of about $17.22 an hour, an increase of $5 an hour, and another 3.49% increase in February. Uber ( UBER ) and Lyft ( LYFT ) have repeatedly opposed new wage rules, claiming higher driver pay would lead to higher taxi fares and lessen competition.
New York City law also requires Uber/Lyft drivers to obtain a TLC license, a complex set of regulations that requires a valid DMV driver license, followed by drug testing, a physical exam, and extensive driving lessons. Even after navigating New York City’s regulatory maze, Uber (UBER) still has a waiting list for new drivers due to TLC usage regulations.
Uber ( UBER ) shares closed slightly higher on Monday but were lower in after-hours trading.
