⬛🔐 BREAKING: Uber NYC "Lockouts" Returning?
Uber sent an email to its NYC TLC driver base tonight implying that the rideshare giant might have to control / limit access to its app. Uber "lockouts" last appeared in late 2019. What does it mean?
Uber sent an email to many of its NYC TLC drivers tonight, going over upcoming changes ahead of the company needing to comply with new New York State rules and this year’s ~3.5% CPI-adjustment to NYC TLC Driver Minimum Pay.
We paste screenshots (see below) of an Uber email several NYC TLC drivers sent us. Of particular note to NYC TLC drivers is Uber’s commentary under the TLC Utilization Rate heading.
“As a reminder, in 2023, the TLC updated their utilization rules. To comply with that update, apps may once again have to make changes around drivers’ access to the platform. This means that drivers like you may experience app changes regarding access in different places at different times. You may also see changes to driver incentives, referral rewards, and the ability to sign up to drive with Uber in NYC.”
- Uber email sent to NYC TLC drivers (Feb 28, 2024)
As we’ve written recently, plateauing / declining industrywide high-volume (HV) utilization rates (UR), or how busy a driver is kept by Uber/Lyft NYC, have resulted in growing driver waitlists. The industrywide UR baseline, Uber and Lyft NYC need to be careful not to fall below, is 53%.
Uber’s email implies the return of NYC “lockouts”, also known as “the planner”, and longer driver waitlists (i.e., might have to wait for several months). Therefore we can likely conclude Uber (and likely Lyft) might be projecting its industrywide UR is at risk of consistently dropping below the 53% UR floor, so has to limit new NYC TLC driver sign-ups and even access for existing drivers.
⭐ Basically, what Uber (& Lyft) need to solve for is ensuring logged in NYC TLC drivers are kept as busy as possible (i.e., higher UR), so Uber (& Lyft) don’t have to come out-of-pocket to ensure the TLC driver minimum pay thresholds are being satisfied. If they risk falling below a 53% UR level consistently, then “lockouts” and longer driver waitlists will return.⭐
Many NYC Uber and Lyft drivers value the flexibility of working when and where they want to. Similar to late 2019 / early 2020, just before the pandemic, “lockouts” will first likely impact “part-timers” who only work a few days per week. “Full-timers” will likely get priority as they are more dependably online.
In addition, the Green Rides Initiative mandate might give an “access” edge to drivers with wheelchair accessible vehicles (WAVs) and/or electric vehicles (EVs), although 2025 benchmarks have already been met. It would be interesting if a long-time NYC Uber (of Lyft) driver with a hybrid vehicle got less trips than a TLC driver with a newly issued EV TLC Plate related to overly aggressive Green Rides benchmarks 🤔.
Finally, other quick thoughts we had is (1) TLC drivers with Uber Black-qualified vehicles might have waitlist priority, given the more limited supply of those vehicles and (2) more TLC drivers might start driving yellow cabs 🚕, as it gets harder to access Uber / Lyft NYC, which circularly might actually lower app URs further (more active taxis, take market share away from Uber/Lyft). To be clear, this is our speculation.
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📧 Screenshot of Uber email to several NYC TLC drivers (February 28, 2024)
Note, this is a developing story and we will provide any relevant updates.
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Why no one is proposing the removal of the utilization rate? Lockouts hurt drivers. Raises could be calculated based on the CPI or other metrics. The TLC obviously doesn't care about traffic, as evidenced by them adding 10,000 EV plates by themselves.
when should a report be released about utilization rate?