New York City regulated Uber and Lyft, now other cities are looking to do the same
A bicoastal movement to rein in the number of Uber and Lyft cars — and boost driver earnings — is taking its cues from New York City.
New York regulators this summer capped the number of app-based cars allowed on city streets, and limited the time their drivers can cruise without a passenger in the busiest parts of Manhattan.
The changes may push some drivers out of the city — or maybe out of the business entirely — while perhaps boosting the incomes of those who remain.
Now the companies are fighting against a push in California for a state law guaranteeing drivers’ incomes.
“We have robber barons in the 21st century,” said Nicole Moore, a Lyft driver in Los Angeles and member of the Ridesharing Drivers Union, which organizes app-based drivers. “The drivers are underwater from the cost of our cars.”
Matt Daus, a former head of the New York Taxi and Limousine Commission, said the push to regulate Uber and Lyft in New York and California could inspire other cities to fight back as well.
“The political tide is shifting,” said Daus. “It’s now time for a backlash. The question is will the drivers outside of the coasts get organized? Will this be a one-off thing that fizzles out, or will it snowball into something much bigger?”
Drivers elsewhere in the country feel much of the same economic pain of yellow cab drivers and app-based drivers in New York. Yellow cabs revenue in the city is down 36% since 2015, when e-hail cabs began doing business.
“I was earning $300 to $400 a day in the beginning,” said Funes, who also drove a cab from 1996 to 2000. “They started to add a lot of cars on and then I started to see they’d take more of a percentage of my fare…. Now I’m down to $140 or $120 a day.”
“The investors are even getting screwed,” said Moore. She noted that Uber reported a loss of $5.2 billion in the second quarter of 2019, compared to $1.8 billion that Lyft lost in all of last year.
When the Uber and Lyft enter a market, local taxi drivers see their demand slip, and almost immediately start taking home less pay.
The app-based drivers, who are technically independent contractors and not employees, make a decent living at first. But as more and more drivers sign up for the apps, ridership cannot keep up, and drivers end up with fewer rides and fewer dollars in their pockets.
In New York, Lyft has already been forced to temporarily kick some drivers off of its platform to comply with new the city’s new minimum wage rules. Because the city has limited the number of cars Uber and Lyft can have on the road, many drivers and experts fear the new cruising regulations will effectively create a new taxi medallion system for app-based cars.
California lawmakers are currently working to pass legislation that would make app-based drivers traditional employees, and Uber has launched a blitz campaign railing against the idea.
Moore supports the bill, and said Uber and Lyft are designed to redistribute wealth away from working class drivers and into the hands of white collar corporate types.
“There’s money that can be shared here with workers, but that’s not in the companies’ interest,” said Moore. “They consider us a hiccup on the way to self-driving cars” — which might operate with many fewer drivers.
“That has happened in a number of cities like ours,” said Indianapolis Councilman Vop Osili. “There is no strong taxi industry or no strong taxi lobby here in our city and, I daresay, the entire state.”
Because they can not crack down on app-based cars, Osili and his colleagues are working to remove burdensome fees and red tape for the city’s cab industry to level the playing field.
Uber spokesman Harry Hartfield said app-based companies are a good thing for cities as they “offer more equitable by offering safe, reliable and affordable transportation to communities that have been historically ignored by taxis.”
Tightening the number Uber and Lyft cars — and requiring drivers to be paid minimum salaries — will cut the number of drivers in the app car business, said Daus.
“A heck of a lot of drivers are going to be out of work,” he said. “They’re going to pick their best drivers and keep them. It’s already happening in New York.”