🔒🩷 Lyft Announces NYC Driver "Lockouts", Says Uber Trying To Monopolize Market
Lyft announces need to implement NYC TLC driver "lockouts". Asks Taxi & Limousine Commission (TLC) not to act on Uber's call for use of standalone utilization rate (UR) vs. industrywide metric
Lyft officially launches TLC driver “lockouts” in NYC
Company says Uber is trying to monopolize market with calls for high-volume bases to be judged on a standalone utilization rate (UR) basis
Lyft is urging its NYC drivers to contact TLC and says its “working with policymakers to find new alternatives.”
AutoMarketplace continues to believe UR is an academically noble concept, but should be abandoned in favor of of other policies (i.e., limiting the issuance of TLC driver licenses, enforcing “TLC Plate Cap”)
Lyft, as expected and following in Uber’s footsteps, has officially launched NYC driver “lockouts”, another term that describes a situation where a “high-volume” (HV) app company limits a driver’s ability to go online when and where they want.
In addition, also similar to Uber, in an email sent to its NYC drivers, Lyft provides a publicly accessible hyperlink that directs individuals to a pre-filled message addressed to NYC TLC Chair & Commissioner David Do.
In this email (see below), sent to NYC TLC drivers this morning, Lyft makes three key points.
Lyft is against Uber’s call for the TLC to measure utilization rate (“UR”) on a standalone basis, arguing it would allow Uber to monopolize market (we agree, more below)
Lyft will remove upfront trip details for drivers with lower acceptance rates (makes sense in order to boost Lyft’s utilization rate (UR))
Lyft will “have to restrict drivers from going online during certain times and in certain areas” (another way to say they are officially launching NYC driver “lockouts”)
Searchable text of Lyft NYC driver email sent on June 14, 2024 at ~9:XX am
Date: 6/14/24 9:XX AM (GMT-05:00)
From: Lyft <no-reply@lyftmail.com>
To: […]
Subject: Make rideshare rules fair
[…], Uber is trying to change the way the TLC measures utilization—the time you spend driving passengers in your car.
Here's why this matters to you:
Uber wants to change the rules so that Lyft is penalized, allowing Uber to monopolize the market. That means fewer options for drivers to earn.
In response to Uber's actions and TLC requirements, Lyft will soon have to remove upfront trip details for drivers with lower acceptance rates. We'll also have to restrict drivers from going online during certain times, and in certain areas.
Learn more about utilization in New York City and tell policymakers to make rideshare regulations fair.
[‘Take Action’ button]
If you click the “Take Action” button in Lyft’s email, it goes to a publicly-accessible webpage that has a pre-filled (editable) message addressed to NYC Taxi & Limousine Commission (TLC) Chair David Do.
“Dear Commissioner Do,
As a driver I value access to more than one rideshare app, and the earning opportunities that brings. Keep rideshare regulations fair, not slanted to favor one company.
Regards,”
- Lyft pre-filled, but editable message, that it’s encouraging its NYC drivers to send TLC Chair David Do
The below excerpt, from Lyft’s webpage (screenshot above), nicely summarizes what the company would like its NYC drivers to consider.
Maintaining an industry-wide measurement encourages a healthy, competitive marketplace. It also protects your earnings as a driver.
Here are some important things to know:
Uber is trying to change the rules in its favor, asking the TLC to switch to a company-specific utilization rate
Uber, as the bigger company, has a built in advantage on utilization – more cars in more places makes it easier to maximize utilization – and is trying to exploit that advantage which would penalize Lyft
Under those penalties, Uber would be allowed to pay drivers less than Lyft, allowing them to charge less for rides and gain even more market share
- Excerpt from Lyft message sent to NYC TLC drivers with headline “Protect your earnings and contact the TLC”
Lyft concludes by stating they are “working with policymakers to find new alternatives. Let them hear from you, too. Tell policymakers to make rideshare regulations fair.”
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Lyft Is Right On Standalone UR Fears
AutoMarketplace has already outlined why we think Uber’s recent call to be measured on a standalone UR basis would be bad for NYC TLC drivers and also for Lyft’s business.
Below, we copy and paste some relevant text below from a previous article.
“Fair Point, But BEWARE!
We empathize with Uber’s complaint re. the use of a industrywide UR metric and in fact recently called for the TLC to eliminate the UR metric altogether. Instead, we believe the TLC should focus on strictly capping for-hire vehicle supply (TLC-plated vehicles) and even potentially consider limiting the issuance of NYC TLC commercial driver licenses.
….
Our warning to NYC TLC drivers, is if Uber is judged on a standalone UR basis two things will likely happen (*our opinion*):
UBER KILLS LYFT: Uber’s much larger trip market share in NYC (~75% (Uber) vs. ~25% (Lyft)), will likely result in previously “dual-app” TLC drivers choosing to be online with Uber more. In a standalone UR world, Lyft will be forced to launch much stricter NYC driver lockouts, to increase its UR (i.e., Lyft is not benefiting from Uber’s higher UR). This will create a “doom loop” for Lyft, where Lyft NYC driver supply declines, passenger wait times go up, passengers then increasingly prefer Uber, Uber gets more trips, drivers are more attracted to Uber, etc. etc. Uber finally kills Lyft in NYC. 😵 Death by UR.
UBER-ONLY, LYFT-ONLY NYC DRIVERS: If Lyft is judged on a standalone UR basis, it will need to launch stricter driver lockouts to increase its UR. This also might cause Lyft to send more trips to a smaller subgroup of “Lyft-only” drivers who will basically only work for Lyft, earn more and will be incentivized to abandon Uber. Again, given Uber’s much larger share, Uber again likely comes out ahead and increases their relative NYC trip market share.”
It should be noted, the current UR status quo remaining will also likely result in UBER-ONLY, LYFT-ONLY NYC DRIVERS. Driver lockouts are usually based on how busy you are with one app, so drivers will likely choose to go “all-in” with one app vs. the other.
- AutoMarketplace (May 16, 2024)
In addition, we speak to our logic in the below video at 0:27:29 "(👎 Lyft standalone UR is a bad idea).
I’ll tell you this, Uber will continue to put locks and lay off drivers, because they won’t pay out of their own pocket for other people’s mistakes, and TLC won’t be able to do anything either and force Uber to pay out of their own pocket, or reduce the number of plates. Uber simply doesn't have that much work. I think that this will be resolved over time, when the number of cars and license plates decreases due to natural reasons. someone will change jobs, someone will go bankrupt.
It looks like the negotiation with TLC isn't going well. Lockouts might become a permanent situation. I read on the uberpeople forum that someone spoke to TLC directly.
Quote by Dst Rain
"I called TLC talked to 3 individuals. All three saying go email driver pay.org etc. I spoken to someone with little knowledge said. This is how it's gonna stay. He couldn't say much directly since the call has been recorded but I got the picture what he's trying to say. TLC is not going to back down from the utilization rate. It doesn't matter if the drivers go bankrupt because it will make the city look stupid and that's how it's going to be for some time. Mind you he wasn't saying all this directly, but if you're smart enough you're able to pick up what the answers and the questions were. For example like this, the TLC has set minimum wage for the drivers and the TLC will always protect the driver's minimum wage. So you should get some sort of idea what's going on here."