Note: The New York City Taxi & Limousine Commission (TLC) has now extended the public comment period related to its proposed driver pay rules to Wednesday, March 5th.
It might surprise you that our headline quote relates to New York City Taxi & Limousine Commission (TLC) Board Member Paul Bader. When the regulator tried to explain the utilization rate (UR)-based minimum driver pay formula and why certain changes were being proposed, Bader and fellow Board Commissioner Kenneth Chan, were genuinely confused. Ultimately, both Commissioners will vote on the final pay rules.
We appreciate Commissioners Bader and Chan’s intellectual honesty and willingness to ask questions. They are fulfilling their responsibilities precisely as intended—acting as unpaid, independent TLC Board members, approved by the City Council, who critically examine the regulator’s policy proposals.
If the logic behind the new driver pay formula is unclear even to highly educated, sophisticated voting members of the TLC Board, how can the agency expect the “average” NYC TLC driver (or other industry stakeholders) to understand what is being proposed and why?
As we recently stated:
“Many NYC TLC drivers and other industry stakeholders do not understand the complex driver pay rules; this is a regulatory failure.”
- AutoMarketplace (February 2, 2025)
During last Wednesday’s ~2.5-hour TLC public hearing on proposed rule changes to the NYC minimum driver pay formula—which Uber and Lyft are subject to—a lot was revealed. It is time for the regulator to also be held accountable for a string of failures. From the release of over 10,000 FHV licenses (TLC plates) in 2023 alone to data input errors, this status quo is unacceptable and, frankly, dangerous.
When we first reported on the American Transit’s insolvency, we had to triple check all of our facts and analysis, as we genuinely couldn’t believe that the largest NYC for-hire transportation insurer was technically insolvent (for decades?) and a lot of media hadn’t reported on it (for decades?)!
Just the other day, we spoke to a journalist at a well-known mass media organization about the new driver pay rules. During our conversation, we pointed out that, despite extensive coverage of driver access restrictions (“lockouts”), the TLC always seemed to escape criticism or accountability. A simple example: in a recently announced FTC investigation into whether Uber and Lyft colluded on NYC driver lockouts, it appears the Mayor and the TLC may have actually enabled the alleged collusion!
To be clear, we continue to disagree with several points Uber and Lyft are advocating for. For example, Uber’s recent malicious email regarding the de-platforming of drivers who operate vehicles over five model years old was both unethical and immoral. We’re glad the TLC stepped in quickly.
However, something very troubling happened during Wednesday’s public hearing. Both Uber and Lyft—key parties in any public discussion on driver pay—were given only two minutes each to testify and were not asked any follow-up questions by the TLC Chair or Board. Meanwhile, TLC Chair David Do used his moderation powers to allocate over eight minutes of speaking time to Professor James A. Parrott to advance the TLC’s political talking points against Uber and Lyft.
This is a highly inappropriate way to conduct a public hearing and amounts to a form of filibustering.
Public Hearing - Chair Do Introductory Remarks
Let’s dive into the public hearing. If you think our commentary above seems harsh, we encourage you to watch and/or listen to NYC TLC Chair David Do’s opening remarks.
Chair Do describes Uber and Lyft driver lockouts as “harmful, unnecessary, and unacceptable,” only to then essentially say, “Let me be clear”—the TLC bears no responsibility. While we believe Do’s passion is genuine, the regulator is, in our opinion, partially responsible for what transpired and for why NYC drivers were “locked out” last year.
The Chair has a history of accusing others of spreading misinformation and disinformation while taking no responsibility for the TLC’s policymaking failures. It’s not unusual for a bureaucrat seeking to promote the talking points of political bosses to make such statements, but we call it as we see it.
To be clear, we also acknowledge that some of Do’s points are valid. Many people describe Chair Do as highly approachable and polite—traits we agree he possesses. That said, we encourage our readers to focus on actions, not political rhetoric.
If we hold Uber and Lyft accountable, it’s only fair that we provide a balanced perspective.
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NYC TLC presentation by Russell Glynn, Director of Policy Research + Board Q&A
After Chair Do’s remarks, TLC Director of Policy Research Russell Glynn delivers an informative presentation on the proposed minimum driver pay rules.
Glynn does mention that, separate from the newly proposed rules, the driver minimum pay is set to increase by 3.92% on March 1st, based on the current formula. We think Glynn’s presentation is technically informative. Where the presentation and discussion get interesting is when TLC Board Commissioners, notably Paul Bader and Kenneth Chan, start asking basic questions.
We encourage you to watch the Q&A, as we believe it reveals an important truth—the TLC cannot effectively explain its own rules and may not fully understand why it has structured them the way it has. When Board Commissioner Bader understandably asks why the distance-based utilization rate is being increased—since that would presumably reduce driver pay—Do’s response can essentially be paraphrased as, ‘because that’s how other people do it’ and it makes the rules ‘litigation-proof.’
At a fundamental level, does Do actually understand what his TLC is proposing? And why can’t he communicate it effectively? He should be able to clearly articulate why using two utilization rates is the norm and why adding it makes the rule more ‘litigation-proof.’
Moreover, if educated and sophisticated Board Commissioners struggle to understand the TLC’s explanations, how can Do expect drivers and other industry stakeholders to? We believe the presentation and Board Q&A exposed the shortcomings of the TLC’s rules. In fact, during the presentation, the regulator essentially admits that its original pay formula was flawed—citing issues such as inflation adjustments and the use of time-based utilization for per mile (‘distance’) rates.
“I don’t want to hold [the hearing] up anymore. It still doesn’t make sense to me, at all.”
- Paul Bader, TLC Board Commissioner
🩷 Lyft testimony
Officials from Uber and Lyft, just like all other public speakers besides Professor James Parrott, only had two minutes to speak. Lyft’s Chief Policy Officer Jerry Golden rushed through prepared remarks. Lyft also hired well known law firm Skadden, Arps, Slate, Meagher & Flom LLP to draft a more comprehensive critique of the TLC’s proposed driver pay rules.
The company also commissioned Professors Jonathan Guryan, Ph.D., and Ray A. Mundy, Ph.D., to prepare two separate reports that essentially refute the conclusions of Professor Parrott’s driver expense report—the TLC is relying on Parrott’s report to formulate its new rules.
Notably, Lyft makes the following claim, which does not align with TLC Factbook trip data trends (i.e., Uber and Lyft’s combined Q4 trip growth is flat, and their relative market shares remain stable). What is going on?
“Lyft rides were already down mid-teens year over year in NYC in the fourth quarter of 2024, despite Lyft rides increasing nationwide throughout this same period.”
- Official Lyft statement
Furthermore, Lyft implies that it would be forced to remove over 1,200 NYC TLC-licensed drivers if the proposed rules are passed.
“If you factor in the additional rate hike based on the flawed Parrott report and the March CPI increase, we estimate approximately a 4-6% further decrease in rides, and we would have to remove the equivalent of over 1,200 full time drivers to maintain 2024 utilization rates”
- Official Lyft statement
Below, we share Lyft’s full statement and a bullet-point summary. We also share law firm Skadden’s ‘Table of Contents’ related to Lyft’s opposition to the regulator’s rule.
Bullet point summary of Lyft’s official written testimony
Lyft’s Support for Driver Pay Minimums: Jerry Golden, Chief Policy Officer at Lyft, reaffirmed Lyft’s support for driver pay minimums and highlighted the company’s commitment to ensuring drivers keep 70% of rider fares after external fees.
Criticism of Proposed Regulations: Golden argued that the proposed amendments reinforce a flawed pay model, pressuring companies to use driver lockouts to maintain utilization rates, which negatively impacts both drivers and riders.
Concerns About Cost Increases and Reduced Demand: He criticized a report by James Parrott for inflating expense reimbursement rates, adding to rising fares, alongside congestion fees and upcoming price hikes, which could lead to a 4-6% decline in rides and the loss of over 1,200 full-time driver equivalents.
Negative Impact on Lower-Income Riders: Golden emphasized that 37% of Lyft rides in NYC start or end in lower-income areas, where riders are more reliant on Lyft for work, school, and job interviews, making fare increases especially harmful.
Call for Alternative Regulations: Lyft urged the TLC to work with stakeholders to develop a more rational and sustainable alternative that avoids the negative consequences of the proposed rules, citing better regulatory models in other states.
🖤 Uber testimony
A visibly annoyed Josh Gold from Uber was also forced to rush through his prepared comments. Notably, in his public testimony, Gold states the following:
“I urge you to review our written comments outlining miscalculations in the rate formula. If not corrected, the courts will step in.”
- Josh Gold, Uber
Similar to Lyft, we’ll rely more on Uber’s written testimony to summarize their views.
Bullet point summary of Uber’s official written testimony
Concerns Over Frequent Regulatory Changes: Uber argues that the TLC’s continuous adjustments to the HVFHS driver pay regulations—such as increasing pay standards multiple times and imposing new vehicle mandates—create instability in the market before prior changes have had time to take effect.
Criticism of Flawed Data and Unverified Assumptions: Uber challenges the Parrott Study, which the TLC used to justify its new pay regulations, stating that it relies on an unreliable survey with a low response rate, arbitrary depreciation assumptions, and questionable estimates of driver expenses.
Objections to Increased Driver Expense Calculations: Uber disputes the proposed per mile rate increases, arguing that core driver expenses have remained stable and that a Consumer Price Index-based adjustment is a more appropriate method rather than the new expense model.
Opposition to Arbitrary Utilization Rate Changes: Uber criticizes the TLC’s decision to alter the way utilization rates are calculated without clear standards, stating that this creates uncertainty and penalizes companies for managing platform access to maintain efficiency.
Call for a More Transparent and Data-Driven Process: Uber urges the TLC to delay implementing the proposed changes, conduct a more thorough analysis of driver expenses using reliable data sources, and avoid hasty rulemaking based on incomplete or misleading studies.
🧑🏫 Professor Parrott testimony
Unlike Uber, Lyft, and all other public speakers, as mentioned earlier, TLC Chair David Do used his moderation powers to allocate over eight minutes of speaking time to Professor James A. Parrott in order to advance the TLC’s political talking points against Uber and Lyft.
Professor Parrott uses his extended speaking time to publicly defend his driver expense report, which has been criticized by both Uber and Lyft, and calls the Uber-funded HR&A report “flawed”. Chair Do also asks Professor Parrott about his original 2018 driver expense report, “I don’t think that report ever envisioned lockouts, but instead envisioned that [Uber and Lyft] would not onboard more drivers than they need…can you talk a little bit about your 2018 report?”
Also available on YouTube ⬇️
TABLE OF CONTENTS
0:00 Introduction 4:01 NYC TLC Chair David Do introductory remarks 7:12 TLC Presentation - High-Volume Minimum Driver Pay Proposed Rules - Russell Glynn - Director of Policy Research 13:00 Discussion on Utilization Rate (UR) 16:02 TLC Board Commissioners Bader and Chen Q&A on UR 27:56 5 year and older vehicle model threat by Uber? 28:30 TLC Board Commissioner Kaufman Q&A 29:30 TLC Board Commissioner Bader Q&A on enforcement re. lockouts 33:01 Jerry Golden, Lyft 35:42 Josh Gold, Uber 37:55 Professor James A. Parrott, New School 41:45 Professor Parrott & TLC Chair Do Q&A
