Click here to directly access the recording of NYC TLC Board of Commissioners meeting and vote.
Uber and Lyft officially began preventing many of their already active NYC TLC-licensed drivers from accessing their platforms — or “locking them out” — in May 2024. Although the apps phased out the practice by the end of the year, the lockouts were ultimately replaced by driver waitlists, marking the beginning of a new era in which access to the apps in NYC might be seen as a ‘golden ticket’.
Before summarizing what the NYC TLC Board of Commissioners unanimously approved today, let’s briefly recap the background behind today’s vote on revised driver pay rules for high-volume (HV) for-hire services — currently only Uber and Lyft.
Brief History: NYC Driver Lockouts
We won’t rehash the entire history of NYC’s app driver lockouts, but you can find extensive coverage in our archives, including videos. Bloomberg also published a really in-depth (‘The Big Take’) article on driver lockouts last year that we encourage you to read.
Here’s our concise summary of NYC driver lockouts:
In an effort to avoid financial penalties tied to the “utilization rate” — or how busy a driver is kept while logged into either Uber or Lyft — the apps began forcibly (seemingly at random) logging NYC drivers off their platforms, sometimes without warning. For instance, if Uber was required to keep a driver busy for at least 5 out of 9 logged-in hours but couldn’t meet that threshold, it would preemptively ‘force log’ the driver off rather than pay out-of-pocket for idle time.
This practice was understandably frustrating and distressing for NYC TLC-licensed drivers. Unlike in other markets, many NYC TLC drivers are full-time, commercially licensed professionals who rely on Uber and / or Lyft — which together hold a 75%+ share of all city for-hire trips — for their livelihood. Being cut off from work without notice is both destabilizing and demoralizing. Some might argue that being online without receiving trip requests is no different from being logged out, but that misses a critical nuance: being logged in — even while waiting — still feels like being at work. Being forcibly logged out, with no idea when access will be restored, does not.
More importantly, TLC’s driver minimum pay rules were specifically designed to account for ‘active’ idle time — periods when drivers are online and available, even if not actively on a trip. These rules were meant to incentivize platforms to keep drivers engaged, not to be used by Uber and Lyft to game minimum pay rules related to fluctuations in supply and demand.
One aspect many media narratives often miss, however, is that the prior system worked relatively well when the TLC’s for-hire vehicle (FHV) license cap — also known as the TLC Plate Cap — was appropriately managed.
With a limited number of drivers and vehicles on the road, both Uber and Lyft could more easily maintain stable, higher utilization rates and keep drivers busy (i.e., protect wages). Indeed, this is why (1) there were no driver lockouts or waitlists in 2023, and (2) the TLC Plate Cap and the taxi medallion system fundamentally exist. Structurally limiting supply in a reasonable manner was protecting wages and empowering drivers — Uber and Lyft could only dispatch to a fixed number of drivers, rather than an infinite, replaceable supply.
When the EV exemption was reinstated by the TLC in October 2023 — allowing an influx of new FHVs outside the cap — the supply-demand balance was disrupted. The exemption was implemented hastily, quickly rolled back by a judge’s temporary restraining order (TRO) within weeks, and ultimately led to a legal settlement with the New York Taxi Workers Alliance (NYTWA).
Unfortunately, just a short period of unchecked FHV growth was enough to cause lasting harm. The outcome was predictable: too many drivers competing for too few trips.
This isn’t complicated. If FHV supply increases by 10% over a few months while trip demand stays flat, you end up with a glut of drivers chasing too little work. That’s Economics 101.
For all the political chatter about a socialist winning yesterday’s Democratic mayoral primary, it was Mayor Adams and his TLC who failed to grasp basic economic principles — like supply and demand — and misunderstood financial concepts, such as what constitutes 'predatory leasing,' in their effort to promote electric vehicle (EV) adoption and infrastructure investment. While the goal may have been noble, it's important to be clear about why lockouts fundamentally arose in 2024. As usual, it was drivers — not politicians or executives — who ended up paying the price for those policy failures.
That all said, today brought good news! After holding a public hearing, gathering and reflecting on feedback, the regulator officially updated and approved new driver pay rules aimed at preventing the return of driver lockouts. We think the TLC should get credit for striking a balance between various stakeholders — it’s not easy and that’s not lost on us.
Below, we summarize the newly passed rules.
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What Happened Today?
The numerous pieces of this comprehensive proposal together strike a balance to ensure drivers are adequately paid for all their working time and expenses while granting both drivers and HV companies flexibility and predictability and avoiding restrictions on driver access to the HV platforms.
- Statement of Basis and Purpose, NYC Taxi & Limousine Commission (adopted June 25, 2025
NYC TLC’s new HV (Uber, Lyft) driver pay rules are designed to reflect both the economic pressures facing platforms and the need for drivers to earn without unfairly being locked out. This isn’t about letting Uber and Lyft off the hook — it’s about closing loopholes and creating better incentives and mechanisms for both drivers and the app companies.
Preventing Future NYC Driver Lockouts
TLC rules will make the return of NYC driver lockouts much less likely. The headline rule changes are:
A requirement to provide 72 hours notice before locking out a driver
Allowing continuous access, once a driver is logged in to prevent “mid-shift lockouts”
Financial penalties if rules are broken related to locking out drivers
We still believe waitlists will continue to grow, and that driver acceptance ( cancellation) rates might become a new metric Uber and Lyft use to deactivate drivers — or at least keep them uncertain about maintaining app access. For example, the TLC states that its new rules “do not mandate platform access,” so if Uber or Lyft claims a driver’s acceptance rate is too low, these rules do not prevent either company from restricting access to its app.
Adding Distance-Based Utilization Rate
As we’ve previously reported, the for-hire transportation regulator has also decided to add a distance-based utilization rate (UR) to the existing time-based UR used in its driver minimum pay formula. We know many people find the concept of UR confusing, so we wanted to highlight a passage from the TLC that helps clarify it.
[I]f drivers in the aggregate are logged into the apps for two million hours and are with a passenger on a trip for one million hours, the utilization rate is 50%. A trip that pays $20 based on the per-mile and per-minute minimum rates. without accounting for utilization would pay $40 after applying the utilization rate ($20 divided by 50% is $40). In other words, in this example, if drivers are only paid for time driving with a passenger, but they spend just as much time waiting for dispatches and traveling to pick up passengers, then they will earn half the income.
- Statement of Basis and Purpose, NYC Taxi & Limousine Commission (adopted June 25, 2025)
The minimum per-mile pay rate will now be divided by a distance-based utilization rate (UR), rather than a time-based UR. For example, if a driver travels 100 miles in total but only 68.5 of those miles are with a passenger, the distance-based UR is 68.5%.
The time-based UR — the percentage of time drivers are on a trip — will still be applied to the per-minute pay rate.
Another important takeaway is that the TLC has committed to being more thoughtful and flexible in adjusting utilization rates to help prevent future lockouts. In our interpretation, if the UR needs to be lowered due to a recession, for instance, the TLC may be more willing to revise the rate requirements accordingly.
Driver Pay Increase
When you combine the use of the distance-based utilization rate (UR), the annual inflation adjustment, and the revised driver expense calculation — which now assumes that a NYC FHV has residual value after five years (you might recall that, as a negotiating tactic, Uber once threatened to remove all vehicles older than five model years) — the minimum per-trip payment comes to approximately $29.07 for a sample trip of 7.5 miles and 30 minutes. According to the TLC, this represents an overall increase of approximately 5.0% compared to the 2024 rates, and 26.3% compared to the original 2019 rates.
Note: About 3.9% of this 5.0% increase already took effect in March, when the annual cost-of-living adjustment (COLA) was implemented.
Professor James A. Parrott, who authored the driver-related expense report that forms the basis for per-mile rates in the TLC driver pay formula, also published a ‘Supplemental Expense Report’ which we attach below. The revisions make a minor impact on final per-mile rates, or the per mile ‘expense factor’.
As explained below, the purpose of this supplement is to respond to feedback received through the comment process by incorporating a residual vehicle value for vehicles owned by High-Volume For-Hire Vehicle (HV-FHV) drivers and flow that through to the composite per-mile expense factor. Residual values were estimated for the most common internal combustion engine (ICE) vehicles with model years 2015-19 that completed trips in 2024, and for the most common electric vehicle (EV) that completed trips in 2024. This produced a weighted average trade-in value of $7,200 for older HV FHV ICE vehicles, and a residual value of $10,800 for a high-mileage EV. These residual values were adjusted for the amortized value of out-of-pocket insurance deductibles estimated to have been paid by driver-owners.
- CNYCA Supplemental Expense Report to the Revised Expense Model for the NYC Taxi and Limousine Commission’s High-Volume For-Hire Vehicle Minimum Pay Standard. Prepared by James A. Parrott, Center for New York City Affairs at The New School. Issued April 2025.
Final Thoughts
The TLC has clearly devoted considerable thought to preventing future driver lockouts while maintaining fairness toward Uber and Lyft.
However, as we've emphasized in previous articles, there’s no need to rely on utilization rate metrics at all if the TLC simply manages the supply of FHV licenses (TLC plates) and taxi medallions effectively. When supply is well-regulated, utilization rates and driver earnings tend to stabilize naturally — especially with minimum per-mile and per-minute pay rates in place.
Unfortunately, the current rules still feel unnecessarily complex and overengineered. Most drivers will struggle to fully understand them — a problem that regulators and academics need to reflect on.
On a final note, it's worth acknowledging the role that both the Independent Drivers Guild (IDG) and the New York Taxi Workers Alliance (NYTWA) played in bringing attention to the issue of driver lockouts. Without sustained advocacy from groups like these, the outcome may have looked very different.
Hopefully, today marks a lasting end to driver lockouts in NYC — though only time will tell.
