🔓📉 November UR Declines. Are NYC Uber & Lyft "Dispatch Rights" More Valuable Than TLC Plates?
🔓📉 November UR Declines. Are NYC Uber & Lyft "Dispatch Rights" More Valuable Than TLC Plates?
Utilization rates (UR), or how busy a NYC Uber/Lyft driver is kept, declined in November. As UR goes lower, perhaps NYC Uber/Lyft "dispatch rights" are worth more than TLC Plates?
Utilization rate (UR) is a key metric used in TLC Driver Minimum Pay calculation for high-volume bases (currently only Uber & Lyft)
UR is how busy a driver is kept while logged into either Uber or Lyft in NYC
November industrywide UR dropped 2.5% to 52.7%. Year-to-date industrywide UR dropped 0.3% to 54.9%
Newly applied Uber/Lyft NYC drivers face long waiting lists, implying accessing Uber/Lyft NYC is as, if not more, valuable than having claim to a TLC Plate
Low UR implies NYC for-hire vehicle (FHV) oversupply
⏲️ Estimated time to read article: ~5 minutes
This is our fourth update on Uber/Lyft’s monthly NYC utilization rates (UR). UR can simply be described as how busy an Uber/Lyft NYC driver is kept. It is a key metric for TLC-licensed drivers to track because it tells you the probability of “lockouts” returning, the appropriateness of NYC for-hire vehicle (TLC Plates) supply vs. trip demand and how much time it might take a prospective App driver to get off Uber/Lyft’s NYC waitlist.
The lower UR is, especially anything that risks breaking the 53% driver minimum pay-related UR floor, the higher probability of lockouts and the longer new drivers will have to wait to get access to Uber and Lyft in NYC. For example, we know of a newly licensed TLC driver who applied for both Uber and Lyft NYC in November 2023. This driver just got off the Uber waitlist, but still remains on the Lyft waitlist (over 8 weeks).
Golden Ticket?
Stating the obvious and worth repeating once again, the longer the waitlists, the more time it takes a TLC driver to get access to Uber and Lyft in NYC. Remember, Uber and Lyft, combined, have an ~80% for-hire trip market share in New York City! In other words if you have a TLC-plated vehicle and can’t access Uber and Lyft, you actually have a single digit NYC for-hire trip share to go after (note: yellow cabs own ~15% of total trip market share).
Many people in NYC TLC land often talk about TLC Plates and how valuable they may or may not be. However, what’s actually more valuable in a world of NYC App waitlists, Uber/Lyft NYC “dispatch rights” or TLC Plates?
For example, if a TLC-licensed driver could effectively sell their NYC Uber or Lyft App access (“dispatch rights”) that is what actually might be worth more money than just simply having claim to a TLC Plate. It might be analogous to how drivers used to sell their black car base “radio dispatch rights”. You can actually see ads for “radios” in relatively recent versions of the Black Car News ‘Classifieds’ section.
As UR declines/stabilizes and waiting lists become longer, we pose a few questions to our readers.
If a driver has claim to their own TLC Plate, but does not have access to Uber and/or Lyft NYC, how valuable is their FHV License to them?
Why can’t TLC drivers sell access to their right to work on Uber and/or Lyft NYC, when there is a lengthy waiting list? Can’t Uber or Lyft facilitate this after conducting basic screening (i.e., a driver has a TLC license)?
How can the TLC help facilitate the creation of High-Volume (HV) “dispatch right” asset? (Note: This asset will primarily benefit drivers, not leasing companies)
Can Uber and Lyft NYC be forced to adopt a regulated franchise model in NYC, given their duopoly share?
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November 2023 Utilization Rates (UR)
Now to the stats.
Currently, year-to-date (YTD) industrywide UR as of November 2023 (latest TLC data), stands at 54.9%, still comfortably above 53% but a decline of 0.3% from October. The lower the UR, it implies Uber/Lyft NYC don’t really need that many new NYC TLC drivers.
When December UR stats are posted, we’ll keep our readers up to date. We will also keep track of whether longer Uber/Lyft waiting lists will drive TLC-licensed drivers to the yellow cab industry. As of now, it’s unclear.
As always, let us know your thoughts in the comments section below or by emailing us at info@automarketplace.com.
AutoMarketplace NYC covers the for-hire transportation industry and automotive news. Check out AutoMarketplace on YouTube ▶️
Utilization Rates (UR) are interesting but all it is is an AVERAGE for the entire City at all hours. This average UR does not account for time of day/night nor particular geographical areas. For example, notwithstanding holidays, most URs are high during the weekday morning hours between 5 am to, say, 10 am and then you begin to have a drop off from 10 am to 4 pm. URs can also plummet between the hours of 1 am to 5 am on weekdays.
Geography is also a factor. Many FHV drivers like to drive in the CBD of Manhattan and that causes an oversupply to given demand, thereby causing a fall in UR. A drive to Uptown Manhattan or many parts of Brooklyn will give a driver more opportunities and increased UR. Poorer and “unsafe” neighborhoods will generally give high UR merely because many drivers don’t want to do business there.
I spoke to a driver yesterday and he complained that it’s slow now for January. This has historically been true in general. I asked him if he would consider going into Far Rockaway. He came back and said that area was too dangerous. I didn’t argue with him but I find this nook of NYC in the southern eastern most part of NYC to always have high UR.
Lastly, UR also differs between apps. Uber, by nature of their dominance in the rideshare space, will have a higher UR than Lyft. This difference is taken into consideration by TLC.
A savvy driver will know how to increase their personal UR so as to make the most of their time and earn relatively more money per hour than their peers. Average Citywide URs are a good measure for policymakers and the app companies themselves but they should mean very little to drivers in terms of doing actual business and making money.