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Battle intensifies between NYC authorities and rideshare operators

This battle between New York City authorities and ride-hailing service operators Uber and Lyft revolves around a rule by the New York City Taxi and Limousine Commission (TLC) regulating their activity in the US city

Published: Jun 29, 2024 08:03:41 AM IST
Updated: Jun 28, 2024 06:11:32 PM IST

Uber driver Khalid Khattak speaks during a press conference at the Uber offices outside of the Falchi Building on June 26, 2024 in New York City. Uber drivers with the Independent Drivers Guild were joined by members of Justice for App Workers coalition as they staged a caravan protest and press conference to call on Uber to stop the lockouts of their apps for drivers that prevent them from working.   Image: Michael M. Santiago/Getty Images/AFP Uber driver Khalid Khattak speaks during a press conference at the Uber offices outside of the Falchi Building on June 26, 2024 in New York City. Uber drivers with the Independent Drivers Guild were joined by members of Justice for App Workers coalition as they staged a caravan protest and press conference to call on Uber to stop the lockouts of their apps for drivers that prevent them from working. Image: Michael M. Santiago/Getty Images/AFP

New York City has taken aim at ride-hailing service operators after demanding that they pay drivers for idle time between rides, in order to ensure them a decent minimum wage. In response, Uber has decided to disconnect its drivers from its app during low-demand periods, which has now earned the company the wrath of unions.

This battle between New York City authorities and ride-hailing service operators Uber and Lyft revolves around a rule laid down by the New York City Taxi and Limousine Commission (TLC), which regulates their activity in the US city. It requires operators to pay drivers for idle time spent waiting between journeys.

In response, Uber has now started disconnecting drivers from its app during low-demand periods, thus reducing their revenues. Uber, but also Lyft, which could potentially do the same with its drivers, are contesting the TLC's rule, while drivers are threatening to strike if these lockouts continue.

This regulation is intended to guarantee a minimum wage for ride-hailing service drivers, which the sector's main operators are finding hard to accept. In response, Uber has begun temporarily blocking certain drivers' access to its application, claiming that this measure is necessary to manage its costs and avoid increasing the price of rides for users.

This decision to pay for idle time between trips could therefore end up having a double negative impact, with drivers losing part of their income and customers getting more expensive trips. According to Bloomberg, some drivers have already seen their salaries cut by 50%, which is hardly sustainable for them. However, New York City is sticking to its guns, arguing that these measures were designed to improve working conditions and income for drivers.

In response to the lockouts, unions have threatened strike action. But this isn't the first time that ridesharing firms have had a run-in with New York's local authorities. In 2023, for example, the two companies were ordered to pay a total of $328 million to their drivers, mainly for a lack of transparency over their payment and for numerous unauthorized debits.