Discover more from AutoMarketplace
🔒🩷 Lyft NYC Lockouts Have Arrived With "Ready For A Break" Prompt
With sub-50% UR, Lyft NYC appears to have effectively launched a "soft" lockout mechanism. We explain.
Lyft NYC has launched a “soft” driver lockout mechanism
TLC needs to act to get rid of UR-based minimum driver pay formula and enforce necessary for-hire vehicle (potentially TLC driver) supply caps
🚕 Before we get into today’s newsletter, we wanted to welcome The Black Car Fund - Driver Benefits as an AutoMarketplace advertising partner.
All eligible drivers of New York Black Car Services including Lyft and Uber, and the more traditional Black Car bases in the industry can enroll, for free 🥳, to receive a valuable package of Benefits 🤕⚕️💊🦷☂️, provided by The Black Car Fund and the Independent Drivers Guild!
Click on one of the ads or here 🖱️ to find out more. Don’t forget to mention AutoMarketplace!
Last night we were scrolling through UberPeople.net forums and the title of a thread caught our attention: “Why is Lyft trying to put us offline all the time?”. Discussion starter Chapar Kanati had some interesting insight to share about Lyft NYC asking Chapar to log off or actually logging them off, when they were trying to work (or when they were actually on a trip!). After we stumbled across this post, we checked the specific claim(s) with our NYC TLC driver contacts.
What the UberPeople.net user was claiming was also happening to other NYC TLC drivers. In fact, it only just start happening to the TLC drivers we spoke with about three weeks ago. Below, is a mobile screenshot one of our driver contacts sent us showing what the Lyft NYC driver app was showing him last night.
What seems to be happening is Lyft is trying to forcefully (and quietly) log out NYC drivers. This is likely being driven by their algorithm calculating a driver might be online for five or ten minutes before a ride can be sent to them or when trip demand is low. In our view, this is almost certainly driven by Lyft trying to increase its utilization rate (UR).
There is a term for this. LOCKOUTS 🔒.
As we’ve been covering, Uber and Lyft utilization rates (UR), or how busy a NYC TLC driver is kept while logged into an app(s), has been dangerously below the 53% UR floor required by the TLC minimum pay formula. In fact, Lyft’s UR is 45.5% (👀) year-to-date, although an industrywide (Uber + Lyft) UR metric is used.
Uber and Lyft also cannot coordinate their dispatching strategy for several reasons from collusion concerns to Lyft perhaps wanting to “free ride” off of Uber’s higher UR, as outlined by Uber executive Josh Gold in March 2023 TLC public hearing testimony.
“I don’t know when a driver is online with Lyft, so I can only guess to [Uber's] utilization rate…[it] also raises some concerns about free rider because one company [“Uber”] may have to hold up the other company’s [“Lyft”] utilization rate.”
- Josh Gold, Senior Director of Public Policy & Communications at Uber (March 2023)
“Remember, industrywide UR is measured on a calendar year (January to December) basis, so there might be some months that can drag the average lower, but are offset by other months that are busier. A 😓 49.7% industrywide UR still seems dangerously below the 53% UR floor included in the TLC’s minimum driver pay formula. A sub-53% calendar year UR would be disastrous for both Uber and Lyft NYC operations.
To be simple, Uber and Lyft could be forced to “lockout”, or restrict the ability for active NYC TLC drivers to access their driver apps 24/7, if the companies observe they cannot comfortably sustain above a 53% industrywide UR. There are already early warning signs with reports of TLC drivers waiting more than 5 months (if not longer) to get off the NYC rideshare app waitlists.”
- AutoMarketplace (April 18, 2024)
Article continues after advertisement
Get 👏 Rid 👏 Of 👏 UR AND Push Back The 2030 ⚡ EV Mandate
For our longtime readers, they’ll know we’ve been predicting lockouts would return if the TLC did not control NYC for-hire vehicle supply (i.e., issuing new TLC Plates). Our prediction was a bit (ok, very) early, but it’s now coming true. We mention this not to remind people about how smart we are, but rather to highlight how predictable this was. Many industry folks could see this coming.
The TLC allowed for the addition of 10,000+ *new* TLC-plated vehicles in 2023. Yes, we understand it wasn’t their intention, but the careless re-instatement of the EV exemption to the TLC Plate Cap, without a single public hearing about any such re-instatement, caused the predictable “run on plates”. Not the NYTWA lawsuit. In fact, the TLC should be thanking NYTWA for stopping the issuance of more FHV Licenses, as it effectively allowed the regulator to save face.
Furthermore, the 100% staggered EV (and WAV) Green Rides mandate to 2030 is essentially forcing Uber and Lyft to give preference to EVs and WAVs vs. hybrids and “regular” vehicles. Does the TLC not understand how auto loans work or how NYC TLC drivers and fleets actually make their vehicle purchase decisions? 🤔 From comp & collision insurance availability concerns to interest rates to the cost of liability insurance to automotive repair inflation to how many local third party service shops can repair their vehicle to charging infrastructure. Running a business can be complicated.
Again, we’re not trying to go at NYC TLC Chair David Do. Although he has no problem going at others. Defaming local “predatory” leasing companies. Guilty, until proven innocent, is how he decided to operate late last year. Does he know what sort of damage he did to many small mom-and-pop local companies by using such language and enacting the previously mentioned policy? Does he understand what he did to taxi medallion values and that market? We’re also not saying leasing companies or taxi medallion owners are all angels, but there were many other ways to address Do’s legitimate concerns about drivers being abused that also had historical precedent (“FHV Lease Caps”).
For example, the AutoMarketplace team is currently advising a “distressed” leasing fleet that lost more than 50% of its customers, essentially overnight, as many drivers involved themselves in, and time will show this, careless TLC Plate speculation that had nothing to do with drivers wanting EVs. Now, due to Uber and Lyft waitlists (because of UR) there are no new drivers that typically used leasing companies to test out driving NYC TLC. We know another leasing company that closed its doors (basically bankrupted overnight). Was this the goal? 🤷♀️ These are small companies, not VC-backed unicorns. Do should know better as a public official that he needs to be much more balanced.
We believe in an EV future, but we aren’t going to shove it down NYC drivers and fleets throats. If Hertz cannot make it work (right now), why is the TLC using middle class NYC drivers, many who live paycheck-to-paycheck, as EV adoption guinea pigs. This is 🥜🥜🥜.
When EVs are cheaper to operate, drivers and fleets will adopt EVs. When the required charging infrastructure exists, drivers will naturally adopt EVs. AutoMarketplace will be the #1 EV cheerleader 🎉🎉 when we believe this to be the case and we’re pretty technical, “matter-of-fact” people. Furthermore, the increased natural 🤔 adoption of hybrid vehicles is lowering the TLC fleet’s emissions as well (no one talks about this).
Our criticism is driven mostly by nervousness, less by anger frankly. We are nervous NYC TLC drivers will be on forever waitlists. subject to lockouts and will lose their freedom to work when and where they want. A NYC TLC driver’s ability to work when and where they want (+ earn a good wage), is more valuable than a “TLC Plate” could ever be, we can tell you that. As we outlined last week, we urge the TLC to address this issue before drivers start marching in the streets and yelling at public hearings. It will come to that if lockouts 🔒 return. The regulator should not underestimate how misinformed policy combined with policy inaction can play out.
I've been keeping track of active fhv plates
109,504- 3 April 2024
109,575- 4 April 2024
109,584 -6 April
109,561 - 7 April
109,569 - 9 April
109,589 - 10 april
109,552 - 12 April
109,530 - 14 April
109,452 - 16 april
109,468 - 19 April
109,254 - 29 April
109,305 - 01 may
109,236 - 03 May
109,131 - 05 May
109,081 - 06 May
108,987 - 07 May
It looks like by a 1.5-2 years we should be back down to 90,000 plates. It's similar to the pre pandemic downward trend who knows what the future of fhv plates holds
Great article once again. I’d like to add the following:
1. Utility rate (UR) is now just dumb in practice. The original intent of it was noble in theory but the rideshare companies (in an effort to maximize profits) found a loophole and the loophole disrupts driver pay and potentially increases fares for riders, which is directly opposite of what the spirit of UR was supposed to do and what the TLC intended. I don’t blame the rideshare companies for doing lockouts one bit. I would do lockouts, too, if I were them!! It simply makes economic sense. Lyft and Uber don’t benefit from doing lockouts, either. Uber, for example, used drivers that had high number of rides on their platform during lockouts. These drivers were excluded from lockouts whereas drivers with a relatively lower number of rides would get locked out. Think about that. Uber basically told the burnt out, fatigued drivers that they won the lockout lottery and would now get more rides. Meanwhile, the driver that took care to drive when fresh and not fatigued was locked out. Makes no sense whatsoever. Furthermore, let’s say a driver gets locked out in Easter Queens and he has to travel to western Brooklyn to be in a busy area, he may just call it a night and go home. Now, you have less and less drivers and with a lower supply of drivers you have the potential for lower supply of drivers and higher fares for riders because demand remains the same, yet another drawback to UR. UR is like taking an average of the outside temperature for the entire year and then deciding whether to wear a bikini or winter coat when a pair of jeans and light jacket would suffice. Who cares what that number is? No one!!! Get rid of it. It’s a terrible metric that benefits absolutely no one. It’s convoluted and is not a fair representation of what is actually going on in the FHV at various times of the day nor during certain seasons of the year. The UR between 5 am and 10 am on a rainy Monday morning is way different than the UR between 10 am to 3 pm on a sunny Tuesday. The TLC has the power to demand data from Uber and Lyft about each and every single driver on their platform and determine if drivers are making a certain average minimum wage or not. With that data (and assuming the TLC is economically rational) it could then make the necessary adjustments with regard to issuance or attrition of driver and vehicle licenses AT THEIR DISCRETION-not the rideshare company’s.
2. Thank God for the NYTWA!! This is an organization that is truly smart, tough in looking out for their members, and obviously not conflicted like IDG. IDG should be ashamed of themselves. I would be on calls with them and I wanted to jump through my Zoom platform and scream in their faces for their utter nonsense ideas that made absolutely no sense. If IDG had their way, we would another 30k EVs on NYC streets and many more drivers would be starving.
3. My understanding is the current City Council has a very “EV good, every other vehicle bad” attitude. This woefully shallow outlook needs education and mountains of patience before more driver businesses are destroyed. A better emphasis, as you mentioned, needs to be made with hybrids. It took over 10 years to make hybrids palatable. Next year all Toyota Camrys will be hybrid for 2025. That’s a milestone. We’re getting to a cleaner environment but let’s not kill driver businesses in the interim to achieve an EV goal that is really unrealistic.
4. I have a vehicle license but I recently had to rent from a rather large rental company, Buggy, for a few weeks. Overall, my experience with them was was very positive. Everything was charged exactly as they said. My deposit was returned without me having to beg and plead for it. They were very professional and friendly. They run a good shop. They gave me oil changes, repairs, renewed the vehicle insurance, made necessary repairs to pass NYS inspection. They told me I could return the vehicle whenever I wanted as long as I gave them one week notice, which I thought was fair. When I would call to say I was going to return the vehicle I’d have to rent it for a longer time and they were completely okay with this. What they charged me was competitive and NOT PREDATORY when you consider what renting a vehicle license with no vehicle is priced at on a monthly basis. In fact, I think their margins might be too thin but they have no choice to have competitive pricing because there is so much competition out there. I would definitely do business with them again and they are in no way compensating me for making these remarks and claims. I merely want to give an actual TLC driver’s experience and testimony with a rather large rental fleet company. I’m sure Chairman Do could have sent a battalion of undercover drivers to come up with similar conclusions and report this back to him.
Thank you, again, for a wonderful piece and for being a sound, detailed, and reasonable mouthpiece in this industry.