October 11, 2024 • 16 mins
Uber and Lyft promised to give drivers independence and the flexibility to work whenever they wanted. But this summer in New York City, these ride share companies started restricting when their drivers could go online. A new Bloomberg investigation found that driver lockouts were designed to save the companies millions in minimum wage payments — and ultimately cost drivers in the process.
On today’s Big Take podcast, Bloomberg tech reporter Natalie Lung joins host Sarah Holder to talk about the strategy behind the lockouts, and how she and her team crowd-sourced stories from hundreds of drivers to understand the impact.
Read more: How Uber and Lyft Used a Loophole to Deny NYC Drivers Millions in Pay
See omnystudio.com/listener for privacy information.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:03):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:08):
Mohammed Mohammed became a driver for Uber and Lyft about
nine years ago. He'd been a yellow cab driver in
New York City for a decade before that, but switched
to the apps in part because they offered him more
control over his schedule.
Speaker 3 (00:21):
You are very free, very flexible to have the job,
to do whatever you want.
Speaker 2 (00:26):
Mohammad likes working mornings.
Speaker 3 (00:28):
I wake up five o'clock, six o'clock after the early prayer.
Then I keep working until one two o'clock, three o'clock.
Speaker 2 (00:37):
Nearly every day for the past nine years, that was
Mohammed's schedule, wake up, pray, drive. He'd open the Uber
app on his phone, press the big go button that
signals he's ready for passengers, and start picking people up
around the city until this summer in August.
Speaker 1 (00:56):
He clicks go and nothing happens, and in staid he
sees a message that you aren't able to go online,
and another message that says go to a busy area
to go online.
Speaker 2 (01:07):
Natalie Lung is a tech reporter for Bloomberg, and she
says that when Muhammad tried to log into Lift that day,
he was locked out too. Over the next few weeks,
Mohammed kept getting locked out of both apps again and again,
and he sent Natalie voice notes from the road chronicling
his experience.
Speaker 3 (01:27):
Sometimes many days when I start work, it's lucked out
both of them. That means tell you go back home,
go back to sleep, or wait in the car until
we open the air for you.
Speaker 2 (01:39):
The lockouts were disruptive and frustrating. Mohammed couldn't predict when
he'd be able to work.
Speaker 3 (01:45):
When you are coming out of your bid and you
take a shower and you are ready to work, and
the till you know you're not going to work. Now,
before the luckouts, you are very free, very flexible to
have the job. But now after luck out, you are
very controlled.
Speaker 2 (02:06):
Natalie and her colleagues discovered that over the course of
the summer, lockouts were affecting thousands of drivers like Mohammad
all over the city. It was part of an intentional
strategy by Uber and Lyft to cut down on the
time drivers spend without passengers in the car and the
amount of money these companies would have to spend next
year to compensate them.
Speaker 1 (02:27):
The issue here is a classic demanded supply problem. Uber
and Lyft have onboarded too many drivers, so in an
attempt to fix that supply issue. To balance it, they
are locking drivers out.
Speaker 2 (02:43):
Today on the show, an investigation into Uber and Lyft's
summer of lockouts, what the company's strategy costs drivers and customers,
and what it says about the future of regulating the
gig economy. This is the big Take from Bloomberg News.
I'm Sarah Holder. The story of Uber and Lyft's twenty
(03:06):
twenty four summer of lockouts actually starts way back in
twenty eighteen, when New York City passed a law establishing
a minimum wage for ride share app drivers, the first
of its kind in the US. Bloomberg Tech reporter Natalie
Lung told me it was an extra complicated rule for
the city's Taxi and Limousine Commission to design because of
(03:26):
the way ride hill drivers work. The commission, called the
TLC for short, wanted to find a way to make
sure drivers were compensated fairly for all their working hours,
including the time they spent on the job waiting for riders.
Speaker 1 (03:40):
The TLC commissioned to economists to study how to implement
that rule effectively.
Speaker 2 (03:47):
The economists found that drivers weren't making enough each hour
through fares alone. Uber and Lyft would have to step
in to compensate drivers for the time they spent working
without passengers in the car. But how much of the
driver vers time should be paid for by passengers and
how much should be covered by the companies. To find
the sweet spot, economists developed a formula.
Speaker 1 (04:09):
The economists came up with the model where drivers would
not only be compensated for per mile and per minute,
but there will also be a component or a multiplier
called the utilization rate, which measures how busy drivers are
and would compensate drivers or when they don't have a
passenger in their car.
Speaker 2 (04:29):
A utilization rate. It basically measures how much of an
Uber or lyft drivers on time is spent with an
actual passenger in the car versus how much is spent
driving around waiting for a passenger. Because it would be
too complicated to calculate a different utilization rate for every
driver every day, the city sets an industry wide standard
rate each year based on data from all the drivers
(04:52):
in the city. When the minimum wage lock came into
effect in twenty nineteen, that utilization rate was set at
fifty eight out of every one hundred minutes on the job,
the average Uber or Lyft driver in New York City
spent about fifty eight minutes with passengers.
Speaker 1 (05:08):
And the other forty two minutes are on the road
going to a passenger or waiting for right requests.
Speaker 2 (05:14):
Those forty two minutes idle time not covered by passenger
fares are what Uber and Lyft are on the hook for,
and Natalie says, companies want that idle number to be
as low as possible and that utilization rate, the efficiency rate,
to stay as high as possible because.
Speaker 1 (05:33):
The higher the utilization rate, the companies out of pocket
pay would be lower. And conversely, if the utilization rate
is lower, meaning drivers out waiting around more, the companies
will have to pay more out of pocket to compensate
for the idle time.
Speaker 2 (05:50):
The idea was that this utilization rate would be refreshed
every year by the TLC based on updated statistics submitted
by the ride share companies.
Speaker 1 (05:58):
But then the pandemic has in twenty twenty and that
really plummeted right share demand, and that caused the TLC
to just keep the rate as fifty eight percent, and
it went on until.
Speaker 2 (06:10):
Now until now because in the first two months of
twenty twenty four, that utilization rate dropped below fifty three percent.
The problem was there were too many drivers on the
road and not enough riders. Idle time was increasing, and
that was very bad news for Uber and Lyft.
Speaker 1 (06:30):
Fifty three percent is like a floor that is set
by the city. If they go below that, they would
have to pay more out of pocket next year or
whenever the TLC evaluates it again.
Speaker 2 (06:41):
So the reason that they're trying to meet this utilization rate,
this rate of fifty three percent activity for drivers, is
to save themselves money.
Speaker 1 (06:52):
Right, And their argument is that they wouldn't want to
pass all that cost to riders, and riders would be,
you know, scared off by the higher prices, and that
would lead to lower demand for the service and less
jobs for drivers. So they feel like this is a
cycle that they don't want to see.
Speaker 2 (07:09):
So to make sure drivers were spending more time driving
each hour, to keep that utilization rate from dropping more,
and to save themselves tens of millions of dollars in
future driver wages, Uber and Lyft did something drastic this summer.
They started locking drivers out of the app. Drivers were
outraged they were being locked out of their livelihoods. Many
(07:30):
took to the streets in protest. Bloomberg broke the news
about the first Uber lockouts in June, lifts started locking
out drivers shortly thereafter. The companies didn't deny what they
(07:51):
were doing. They said they needed to lock some drivers
out some of the time because of a mismatch between
rider demand and driver supply. But Natalie and her team
had a hunch this wasn't the full story. They wanted
to know more about just how many drivers were impacted
by Uber and Lyft's decision and how much money was
on the line for companies. So the reporters started a
(08:13):
massive crowdsourcing campaign who they heard from and what they
found after the break to understand the impact of the
Uber and Lyft lockouts on New York City's ride hill system.
Bloomberg reporter Natalie Lung and her colleagues needed a way
(08:35):
to hear from as many drivers as possible.
Speaker 1 (08:38):
And so we created this automated WhatsApp tip line to
let them send screenshots off lockouts when they encountered them.
Speaker 2 (08:45):
They opened the tip line in mid August, and the
response was overwhelming.
Speaker 1 (08:50):
By the end of this three week collection period, we
had close to nine hundred drivers sending us a screenshots
off their lockouts.
Speaker 2 (08:58):
Wow, and were by the level of response.
Speaker 1 (09:01):
Yeah, we were surprised that so many people responded to
us within a short period of time, but at the
same time, we understood drivers were really desperate and eager
to seek out someone who would listen to their plight.
Speaker 2 (09:16):
Armed with more than five thousand screenshots and after more
than one hundred interviews, Natalie and her team found that
the lockouts were more frequent and more damaging than was
previously reported. Uber and Lyft had told them earlier that
summer that they were only locking out drivers during low
demand times. The Bloomberg found lockouts were actually happening at
(09:37):
almost every hour of the day, even during periods of
high demand.
Speaker 1 (09:43):
The fact that these lockouts are unpredictable makes them hard
to plan out there how much they need to earn
and how much they need to work. For Mohammed's example,
he told me that he has incurred around two thousand
dollars in credit card debt. A lot of them are
behind on Texas. Some of them they're behind on their
auto loan payments, insurance payments.
Speaker 2 (10:04):
To make up for the lost time drivers started working
more and taking fewer breaks.
Speaker 1 (10:10):
They feel like if they took a break and went
off line on the app voluntarily, it makes it impossible
for them to get online again. And so one driver
I spoke to he would just forego bathroom breaks or
lunch breaks and just keep driving so that he could
make the most out of his online time.
Speaker 2 (10:27):
It was a little ironic. Uber and Lyft have long
argued to regulators the drivers are independent contractors, not employees.
Speaker 1 (10:34):
A lot of drivers told us that this is completely
the opposite of the foundational flexibility that they were promised
when they switched over to the platforms, and it makes
it complicated because they have unpredictable hours they cannot work
when they want to work.
Speaker 2 (10:51):
It was frustrating for riders too, as Uber and Lyft
limited the supply of drivers on the road prices in
some areas.
Speaker 1 (10:58):
Rose found more than four hundred instances of drivers being
locked out in search zones, and in about half of
those instances, the price for consumers did increase after a lockout.
Speaker 2 (11:11):
But for the companies, all this pain for drivers and
customers may have been worth it, because Natalie and her
team found that for Uber and Lyft, the lockouts served
an important purpose protecting the company's bottom line. Based on
Bloomberg's analysis, by stopping the utilization rate from dipping too
low through lockouts, Uber and Lyft would save themselves from
(11:34):
having to make millions of dollars in extra minimum wage
payments next year.
Speaker 1 (11:39):
So our analysis found, using historical data from the first
six months of the year, even one percentage drop in
the utilization rate would cause Uber and Lift tests of
millions of dollars.
Speaker 2 (11:52):
So, just to make sure I'm understanding the impact of
these lockouts from what your reporting shows, companies say tens
of millions of dollars, drivers worked longer hours, went into
thousands of dollars of debt, and customers paid more for rides.
M that's a pretty staggering impact, right. Spokespeople for both
(12:18):
Uber and Lyft have pushed back on this calculation, saying
that the financial model Bloomberg used doesn't take into account
how a lower utilization rate would make the companies pass
more costs onto riders, in turn scaring more business away.
How did Uber explain why they were doing these lockouts
when you asked about them?
Speaker 1 (12:36):
So they said, it's actually by the ruse design, saying
the ROUE incentivizes companies to increase their utilization rate so
that drivers would be kept busier and so that the
supply would manage better. So they say lockouts is actually
a feature of the rute, not a bug. What did
Lifts say, Lift In a letter that they sent to
(12:59):
a TLC, they said, it's also unnecessary too, even though
it's a lots of resort for them, because they noticed
that Ryesha demand has been weaker than anticipated, even though
they already stopped onboarding new drivers last year.
Speaker 2 (13:12):
What did you think about those explanations that Ubernlift gave.
Speaker 1 (13:15):
Obviously, lockouts are a feature that the companies decided to
do themselves, like the regulator did not force them to
do it. There's definitely more that they could have done earlier,
or there were other ways that this could have been
resolved before resulting to lockouts.
Speaker 2 (13:31):
Natalie says the situation in New York City shows how
complicated it is to calculate the right way to set
a minimum wage for independent contractors and to get companies
like Uber and Lyft to follow both the spirit and
the letter of the rules.
Speaker 1 (13:46):
This is sort of a loopho and gray area that
the regulator has not included in their route and allowing
this sort of thing to happen.
Speaker 2 (13:54):
These rules could be changing soon. New York City regulators
have agreed to revisit the drivermen and wage by the
end of the year to make sure the system works
for all parties, drivers, customers and companies alike. And what
would those new rules be.
Speaker 1 (14:09):
The TLC says they're still in deliberation on those rules,
but one thing that was clear was that they would
limit how many new drivers the companies could on board.
Another thing that they're considering is sort of looking at
that utilization rate to see how it actually reflects the
driver's experience so that they can be compensated fairly. But
(14:30):
drivers who are most impacted in this instance, they may
not be able to afford to wait for new rules.
A lot of them told us they're already are considering
other jobs to complement income.
Speaker 2 (14:42):
In the meantime, after months of lockouts and several driver protests,
Uber Lift, the Mayor's office and the TLC made a deal.
Uber agreed to stop its lockouts as long as Lifted
more to keep its own utilization rate up. And what's
this status of these lockouts? Now are drivers like Muhammad
(15:03):
still signing onto the app, looking for the go button
and instead being turned away.
Speaker 1 (15:09):
So Uber has stopped blockouts as of early September per
the agreement, because Lyft is now trying to keep their
promise with the utilization rate, So Lyft is still contoing lockouts.
So for Mohammed, he's been able to drive for Uber,
but he's still locked out by Lyft.
Speaker 2 (15:24):
Mohammad says the whole experience has left him exhausted. He
used to wake up each morning knowing he'd be able
to jump into work as soon as he wanted. Now
it's unpredictable how and when he drives, doesn't feel under
his control anymore.
Speaker 3 (15:39):
So it's like this is like a monkey business. This
is this is make you depressed many days. Many days
I feel depressed. I go back.
Speaker 2 (15:54):
This is the big take from Bloomberg News. I'm Sarah Holder.
This episode was produced by Thomas. It was edited by
Stacy Vanicksmith and Dana Wallman. It was mixed by Alex Sugia.
It was fact checked by Adrian A. Tapia. Our senior
producer is Naomi Shaven. Our senior editor is Elizabeth Ponso.
Our executive producer is Nicole Beamster born Sage Bauman, is
(16:16):
Bloomberg's head of podcasts. If you liked this episode, make
sure to subscribe and review The Big Take wherever you
listen to podcasts. It helps people find the show. Thanks
for listening. We'll be back next week.
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:08):
Mohammed Mohammed became a driver for Uber and Lyft about
nine years ago. He'd been a yellow cab driver in
New York City for a decade before that, but switched
to the apps in part because they offered him more
control over his schedule.
Speaker 3 (00:21):
You are very free, very flexible to have the job,
to do whatever you want.
Speaker 2 (00:26):
Mohammad likes working mornings.
Speaker 3 (00:28):
I wake up five o'clock, six o'clock after the early prayer.
Then I keep working until one two o'clock, three o'clock.
Speaker 2 (00:37):
Nearly every day for the past nine years, that was
Mohammed's schedule, wake up, pray, drive. He'd open the Uber
app on his phone, press the big go button that
signals he's ready for passengers, and start picking people up
around the city until this summer in August.
Speaker 1 (00:56):
He clicks go and nothing happens, and in staid he
sees a message that you aren't able to go online,
and another message that says go to a busy area
to go online.
Speaker 2 (01:07):
Natalie Lung is a tech reporter for Bloomberg, and she
says that when Muhammad tried to log into Lift that day,
he was locked out too. Over the next few weeks,
Mohammed kept getting locked out of both apps again and again,
and he sent Natalie voice notes from the road chronicling
his experience.
Speaker 3 (01:27):
Sometimes many days when I start work, it's lucked out
both of them. That means tell you go back home,
go back to sleep, or wait in the car until
we open the air for you.
Speaker 2 (01:39):
The lockouts were disruptive and frustrating. Mohammed couldn't predict when
he'd be able to work.
Speaker 3 (01:45):
When you are coming out of your bid and you
take a shower and you are ready to work, and
the till you know you're not going to work. Now,
before the luckouts, you are very free, very flexible to
have the job. But now after luck out, you are
very controlled.
Speaker 2 (02:06):
Natalie and her colleagues discovered that over the course of
the summer, lockouts were affecting thousands of drivers like Mohammad
all over the city. It was part of an intentional
strategy by Uber and Lyft to cut down on the
time drivers spend without passengers in the car and the
amount of money these companies would have to spend next
year to compensate them.
Speaker 1 (02:27):
The issue here is a classic demanded supply problem. Uber
and Lyft have onboarded too many drivers, so in an
attempt to fix that supply issue. To balance it, they
are locking drivers out.
Speaker 2 (02:43):
Today on the show, an investigation into Uber and Lyft's
summer of lockouts, what the company's strategy costs drivers and customers,
and what it says about the future of regulating the
gig economy. This is the big Take from Bloomberg News.
I'm Sarah Holder. The story of Uber and Lyft's twenty
(03:06):
twenty four summer of lockouts actually starts way back in
twenty eighteen, when New York City passed a law establishing
a minimum wage for ride share app drivers, the first
of its kind in the US. Bloomberg Tech reporter Natalie
Lung told me it was an extra complicated rule for
the city's Taxi and Limousine Commission to design because of
(03:26):
the way ride hill drivers work. The commission, called the
TLC for short, wanted to find a way to make
sure drivers were compensated fairly for all their working hours,
including the time they spent on the job waiting for riders.
Speaker 1 (03:40):
The TLC commissioned to economists to study how to implement
that rule effectively.
Speaker 2 (03:47):
The economists found that drivers weren't making enough each hour
through fares alone. Uber and Lyft would have to step
in to compensate drivers for the time they spent working
without passengers in the car. But how much of the
driver vers time should be paid for by passengers and
how much should be covered by the companies. To find
the sweet spot, economists developed a formula.
Speaker 1 (04:09):
The economists came up with the model where drivers would
not only be compensated for per mile and per minute,
but there will also be a component or a multiplier
called the utilization rate, which measures how busy drivers are
and would compensate drivers or when they don't have a
passenger in their car.
Speaker 2 (04:29):
A utilization rate. It basically measures how much of an
Uber or lyft drivers on time is spent with an
actual passenger in the car versus how much is spent
driving around waiting for a passenger. Because it would be
too complicated to calculate a different utilization rate for every
driver every day, the city sets an industry wide standard
rate each year based on data from all the drivers
(04:52):
in the city. When the minimum wage lock came into
effect in twenty nineteen, that utilization rate was set at
fifty eight out of every one hundred minutes on the job,
the average Uber or Lyft driver in New York City
spent about fifty eight minutes with passengers.
Speaker 1 (05:08):
And the other forty two minutes are on the road
going to a passenger or waiting for right requests.
Speaker 2 (05:14):
Those forty two minutes idle time not covered by passenger
fares are what Uber and Lyft are on the hook for,
and Natalie says, companies want that idle number to be
as low as possible and that utilization rate, the efficiency rate,
to stay as high as possible because.
Speaker 1 (05:33):
The higher the utilization rate, the companies out of pocket
pay would be lower. And conversely, if the utilization rate
is lower, meaning drivers out waiting around more, the companies
will have to pay more out of pocket to compensate
for the idle time.
Speaker 2 (05:50):
The idea was that this utilization rate would be refreshed
every year by the TLC based on updated statistics submitted
by the ride share companies.
Speaker 1 (05:58):
But then the pandemic has in twenty twenty and that
really plummeted right share demand, and that caused the TLC
to just keep the rate as fifty eight percent, and
it went on until.
Speaker 2 (06:10):
Now until now because in the first two months of
twenty twenty four, that utilization rate dropped below fifty three percent.
The problem was there were too many drivers on the
road and not enough riders. Idle time was increasing, and
that was very bad news for Uber and Lyft.
Speaker 1 (06:30):
Fifty three percent is like a floor that is set
by the city. If they go below that, they would
have to pay more out of pocket next year or
whenever the TLC evaluates it again.
Speaker 2 (06:41):
So the reason that they're trying to meet this utilization rate,
this rate of fifty three percent activity for drivers, is
to save themselves money.
Speaker 1 (06:52):
Right, And their argument is that they wouldn't want to
pass all that cost to riders, and riders would be,
you know, scared off by the higher prices, and that
would lead to lower demand for the service and less
jobs for drivers. So they feel like this is a
cycle that they don't want to see.
Speaker 2 (07:09):
So to make sure drivers were spending more time driving
each hour, to keep that utilization rate from dropping more,
and to save themselves tens of millions of dollars in
future driver wages, Uber and Lyft did something drastic this summer.
They started locking drivers out of the app. Drivers were
outraged they were being locked out of their livelihoods. Many
(07:30):
took to the streets in protest. Bloomberg broke the news
about the first Uber lockouts in June, lifts started locking
out drivers shortly thereafter. The companies didn't deny what they
(07:51):
were doing. They said they needed to lock some drivers
out some of the time because of a mismatch between
rider demand and driver supply. But Natalie and her team
had a hunch this wasn't the full story. They wanted
to know more about just how many drivers were impacted
by Uber and Lyft's decision and how much money was
on the line for companies. So the reporters started a
(08:13):
massive crowdsourcing campaign who they heard from and what they
found after the break to understand the impact of the
Uber and Lyft lockouts on New York City's ride hill system.
Bloomberg reporter Natalie Lung and her colleagues needed a way
(08:35):
to hear from as many drivers as possible.
Speaker 1 (08:38):
And so we created this automated WhatsApp tip line to
let them send screenshots off lockouts when they encountered them.
Speaker 2 (08:45):
They opened the tip line in mid August, and the
response was overwhelming.
Speaker 1 (08:50):
By the end of this three week collection period, we
had close to nine hundred drivers sending us a screenshots
off their lockouts.
Speaker 2 (08:58):
Wow, and were by the level of response.
Speaker 1 (09:01):
Yeah, we were surprised that so many people responded to
us within a short period of time, but at the
same time, we understood drivers were really desperate and eager
to seek out someone who would listen to their plight.
Speaker 2 (09:16):
Armed with more than five thousand screenshots and after more
than one hundred interviews, Natalie and her team found that
the lockouts were more frequent and more damaging than was
previously reported. Uber and Lyft had told them earlier that
summer that they were only locking out drivers during low
demand times. The Bloomberg found lockouts were actually happening at
(09:37):
almost every hour of the day, even during periods of
high demand.
Speaker 1 (09:43):
The fact that these lockouts are unpredictable makes them hard
to plan out there how much they need to earn
and how much they need to work. For Mohammed's example,
he told me that he has incurred around two thousand
dollars in credit card debt. A lot of them are
behind on Texas. Some of them they're behind on their
auto loan payments, insurance payments.
Speaker 2 (10:04):
To make up for the lost time drivers started working
more and taking fewer breaks.
Speaker 1 (10:10):
They feel like if they took a break and went
off line on the app voluntarily, it makes it impossible
for them to get online again. And so one driver
I spoke to he would just forego bathroom breaks or
lunch breaks and just keep driving so that he could
make the most out of his online time.
Speaker 2 (10:27):
It was a little ironic. Uber and Lyft have long
argued to regulators the drivers are independent contractors, not employees.
Speaker 1 (10:34):
A lot of drivers told us that this is completely
the opposite of the foundational flexibility that they were promised
when they switched over to the platforms, and it makes
it complicated because they have unpredictable hours they cannot work
when they want to work.
Speaker 2 (10:51):
It was frustrating for riders too, as Uber and Lyft
limited the supply of drivers on the road prices in
some areas.
Speaker 1 (10:58):
Rose found more than four hundred instances of drivers being
locked out in search zones, and in about half of
those instances, the price for consumers did increase after a lockout.
Speaker 2 (11:11):
But for the companies, all this pain for drivers and
customers may have been worth it, because Natalie and her
team found that for Uber and Lyft, the lockouts served
an important purpose protecting the company's bottom line. Based on
Bloomberg's analysis, by stopping the utilization rate from dipping too
low through lockouts, Uber and Lyft would save themselves from
(11:34):
having to make millions of dollars in extra minimum wage
payments next year.
Speaker 1 (11:39):
So our analysis found, using historical data from the first
six months of the year, even one percentage drop in
the utilization rate would cause Uber and Lift tests of
millions of dollars.
Speaker 2 (11:52):
So, just to make sure I'm understanding the impact of
these lockouts from what your reporting shows, companies say tens
of millions of dollars, drivers worked longer hours, went into
thousands of dollars of debt, and customers paid more for rides.
M that's a pretty staggering impact, right. Spokespeople for both
(12:18):
Uber and Lyft have pushed back on this calculation, saying
that the financial model Bloomberg used doesn't take into account
how a lower utilization rate would make the companies pass
more costs onto riders, in turn scaring more business away.
How did Uber explain why they were doing these lockouts
when you asked about them?
Speaker 1 (12:36):
So they said, it's actually by the ruse design, saying
the ROUE incentivizes companies to increase their utilization rate so
that drivers would be kept busier and so that the
supply would manage better. So they say lockouts is actually
a feature of the rute, not a bug. What did
Lifts say, Lift In a letter that they sent to
(12:59):
a TLC, they said, it's also unnecessary too, even though
it's a lots of resort for them, because they noticed
that Ryesha demand has been weaker than anticipated, even though
they already stopped onboarding new drivers last year.
Speaker 2 (13:12):
What did you think about those explanations that Ubernlift gave.
Speaker 1 (13:15):
Obviously, lockouts are a feature that the companies decided to
do themselves, like the regulator did not force them to
do it. There's definitely more that they could have done earlier,
or there were other ways that this could have been
resolved before resulting to lockouts.
Speaker 2 (13:31):
Natalie says the situation in New York City shows how
complicated it is to calculate the right way to set
a minimum wage for independent contractors and to get companies
like Uber and Lyft to follow both the spirit and
the letter of the rules.
Speaker 1 (13:46):
This is sort of a loopho and gray area that
the regulator has not included in their route and allowing
this sort of thing to happen.
Speaker 2 (13:54):
These rules could be changing soon. New York City regulators
have agreed to revisit the drivermen and wage by the
end of the year to make sure the system works
for all parties, drivers, customers and companies alike. And what
would those new rules be.
Speaker 1 (14:09):
The TLC says they're still in deliberation on those rules,
but one thing that was clear was that they would
limit how many new drivers the companies could on board.
Another thing that they're considering is sort of looking at
that utilization rate to see how it actually reflects the
driver's experience so that they can be compensated fairly. But
(14:30):
drivers who are most impacted in this instance, they may
not be able to afford to wait for new rules.
A lot of them told us they're already are considering
other jobs to complement income.
Speaker 2 (14:42):
In the meantime, after months of lockouts and several driver protests,
Uber Lift, the Mayor's office and the TLC made a deal.
Uber agreed to stop its lockouts as long as Lifted
more to keep its own utilization rate up. And what's
this status of these lockouts? Now are drivers like Muhammad
(15:03):
still signing onto the app, looking for the go button
and instead being turned away.
Speaker 1 (15:09):
So Uber has stopped blockouts as of early September per
the agreement, because Lyft is now trying to keep their
promise with the utilization rate, So Lyft is still contoing lockouts.
So for Mohammed, he's been able to drive for Uber,
but he's still locked out by Lyft.
Speaker 2 (15:24):
Mohammad says the whole experience has left him exhausted. He
used to wake up each morning knowing he'd be able
to jump into work as soon as he wanted. Now
it's unpredictable how and when he drives, doesn't feel under
his control anymore.
Speaker 3 (15:39):
So it's like this is like a monkey business. This
is this is make you depressed many days. Many days
I feel depressed. I go back.
Speaker 2 (15:54):
This is the big take from Bloomberg News. I'm Sarah Holder.
This episode was produced by Thomas. It was edited by
Stacy Vanicksmith and Dana Wallman. It was mixed by Alex Sugia.
It was fact checked by Adrian A. Tapia. Our senior
producer is Naomi Shaven. Our senior editor is Elizabeth Ponso.
Our executive producer is Nicole Beamster born Sage Bauman, is
(16:16):
Bloomberg's head of podcasts. If you liked this episode, make
sure to subscribe and review The Big Take wherever you
listen to podcasts. It helps people find the show. Thanks
for listening. We'll be back next week.
Hosts And Creators
Sarah Holder
Saleha Mohsin
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