Uber CEO Dara Khosrowshahi, who took the helm of the controversial company back in 2017, is known for being pretty unflappable. He was even upbeat during the second quarter earnings call, when he was charged with explaining why Uber posted more than $ 5 billion in losses in just a few months' time.
But in response to an analyst's question, about how New York had affected the bottom line in regulation, Khosrowshahi got a bit spicy, at least for Khosrowshahi. "I think anyone who tells you that the changes in New York City are good …" he trailed off for a moment. "It's malarkey, frankly."
One person's malarkey is another's sensible policy decision. Nearly a decade after ride-hailing companies began exploring the decades-old taxi regulations of gray areas around the country, Uber and Lyft have found themselves subject to increasingly strict rules in the Big Apple.
The city, its Democratic presidential hopeful mayor, Bill De Blasio, and its ride-hailing regulator, the Taxi and Limousine Commission, say the rules are aimed at helping drivers and cutting down on city traffic, which has slowed a jog's pace in some parts of Manhattan. The companies say the regulations hurt drivers, riders, and of course, their bottom line. Drivers, meanwhile, say aside left holding the bag.
The new wave of rule-passing began last summer, when the city instituted the country's first-ever freeze for on-hire vehicle licenses, barring drivers from registering to drive new cars to the companies. (The freeze exempts wheelchair-accessible and electric vehicles.) In January, Uber and Lyft trips to Manhattan got slapped with an extra $ 2.75 congestion charge. (Taxis got a $ 2.50 surcharge of their own.) Then, despite a lawsuit from Lyft (and a smaller competitor named Juno), the companies were forced to start paying drivers $ 17.22 per hour earlier this year. And a new state law would force the companies to rejigger their fleets using wheelchairs to accommodate passengers more quickly. Phew.
Now, new rules approved by city regulators this month extend the freeze on new Uber and Lyft vehicle licenses in New York indefinitely. (This spring, a judge blocked an Uber lawsuit aimed at stopping it). The rules also cut down on "cruising," or the time drivers spend waiting for their next rides or driving their customers, forcing companies to rethink how dispatching drivers are.
The regulations are particularly less than ideal for companies — malarkey, some might say — because the city is among their largest markets. In filings with the US Securities and Exchange Commission just before it went public, Uber said New York is one of five metro areas that collectively account for just under a quarter of its gross ride-hail bookings. (The others are Los Angeles, San Francisco, London, and S Paulo Paulo.) Although Lyft didn't disclose a similar metric in its own public filings, the company is still US-based, suggesting its New York business may be even more important. General Chat Chat Lounge
The city has symbolic importance, too. Although most other cities have the authority to regulate ride-hail in the way that New York does, many, also sick, traffic are looking for ways to do so. Some hope to levy fees on companies, such as Chicago, Washington, DC, and if San Francisco decides to pass an upcoming ballot measure, the city by the Bay. Others are attracted to the hard stick of New York's ride-hailing vehicle cap. In the run up to her election, Chicago's new mayor told a newspaper she would favor new limits on the number of ride-hailing vehicles in the city. (The city's Consumer Protection Office, which is in charge of regulating ride-hail, did not respond to WIRED's request for comment.)
Uber and Lyft, for their part, are arguably unfairly scapegoated for a traffic problem that can be traced back to regular-old Americans driving to their regular-old cars every day. "The TLC's misguided policies will reduce New Yorkers 'access to affordable and reliable transportation," Lyft spokesman Campbell Matthews said in a statement, while an Uber spokeswoman said the company worries that "Mayor's rules will hurt drivers' ability to earn a living. "
The ride-hail companies have responded to the rules, which they say have been instituted too quickly for anyone to understand their impact, with cat-and-mouse tactics aimed at keeping riders in cars. and revenues in pocket. The companies have, for example, raised prices across the city, a move that Uber says has led to stunted ride growth in some low-income neighborhoods.
The ride-hailing companies are also changing the way their apps work for New York City drivers, many of whom work full-time because of the city's more stringent licensing policies. Now, in times of low demand, Lyft limits the number of drivers on the road, giving priority to high-volume drivers who have accepted and completed 90% of their rides, or those who have wheelchair-accessible cars, or those in the making. The company's Express Drive program, which rents vehicles to licensed drivers who do not own cars. The driver app also now includes a "heat map" showing where rides are in the highest demand, and Lyft has urged drivers to go rides before turning on their app — urging them, essentially, to drive where the app needs them. Without being paid for it, and without Lyft being penalized by both the new driver's wage and new cruising rules. Uber sent an email to drivers earlier this month indicating it is also mulling changes to its driver app.
Many drivers are displeased. In a letter sent to the Taxi and Limousine Commission in June, the Independent Drivers Guild, which says it represents 65,000 drivers, urged the city to take action against Lyft for changes made to its app. (The IDG is backed by the International Association of Machinists but funded, in part, by Uber.) "The app companies treat us like disposables," driver and IDG member Tina Raveneau told the Taxi and Limousine Commission during testimony in June. The IDG also opposes New York's decision to extend its vehicle license cap, suggesting that, caught in the middle, drivers feel there is plenty of blame to go around.
This story originally appeared on wired.com.