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AGENCY TESTIMONY
Driver lockouts and proposed rule changes
4:07:12
ยท
150 sec
Commissioner Do explains the issue of driver lockouts implemented by Lyft and Uber, and the TLC's proposed rule changes to address this problem and improve driver pay calculations.
- Lyft and Uber used lockouts to artificially inflate utilization rates and avoid paying drivers.
- TLC held a public hearing on 02/05/2025 to propose changes to driver pay rates and utilization calculations.
- Proposed amendments include splitting utilization rates into time-based and distance-based components.
- New rules would require 72-hour notice before restricting driver access to platforms.
- The comment period for the proposed rules was extended to 03/05/2025.
- TLC plans to vote on the final rules in the coming weeks.
David Do
4:07:12
Obstacle was the use of lockouts in calendar year '24 by Lyft and Uber.
4:07:17
The main purpose of these lockouts was to artificially inflate the utilization rate in TLC's driver pay formula to avoid paying drivers who had already been on boarded to work for Lyft and Uber.
4:07:30
Under the current rule structure drivers are paid for trip time and trip distance which are divided by the utilization rate to capture total working time across the entire high volume industry.
4:07:41
Lyft and Uber get a credit of 58% utilization for driver pay calculations while only having to hit 53%.
4:07:50
This flexibility is intended to incentivize companies to avoid lockout due to minor fluctuations in utilization.
4:07:56
However, in 2024 the utilization rates began to fall below 53%, which meant that driver pay calculations would reflect the actual utilization rate from the previous calendar year and not 58% resulting in the companies having to pay the drivers more.
4:08:14
Instead of paying drivers, as we have long asserted, the companies made the deliberate choices to game the system by locking out drivers in order to artificially push the utilization rates back over 53%.
4:08:28
They have failed to manage supply and demand.
4:08:31
As a consequence, on 02/05/2025, TLC held a public hearing to propose changes that would increase minimum per pay rates to account for increased driver expenses, changes the way utilizations are calculated and applied, and add restrictions to lockouts to ensure that drivers have reasonable expectations of their working hours and incomes.
4:08:52
Specifically, the proposed amendment split the utilization rate into two, a time based and distance based utilization rate to prevent manipulation by the high volume for hire vehicle companies and capture driver working time more accurately.
4:09:07
In addition, the proposed rules require the company to provide seventy two hours notice before restricting drivers access to the platform and prevent companies from logging a driver off mid shift, excuse me, except in certain limited circumstances.
4:09:23
Recognizing the important nature of these rules, TLC extended the comment period to 03/05/2025 to give our licensees additional time to review the proposals and voice their opinions.
4:09:35
We are currently reviewing the feedback we received on these proposals and plan to vote on the final rules in the coming weeks.