Getting the balance right on Uber and Lyft
The City Council is voting today on a package of legislation regulating app-based ride hailing companies in NYC.
It’s a big topic, with a lot of competing interests. Uber and Lyft have been projecting doomsday scenarios (which the Daily News rightly calls “bunk”). I understand how important these services are, particularly in the outer boroughs. For many families, including people of color who have faced decades of discrimination, these app-based companies have been a real game-changer and have improved service where both public transit and traditional yellow-taxi service have failed to serve all New Yorkers.
So I wanted to explain my thinking to you, and why I’m confident we are getting the balance right to address plummeting driver pay and rising congestion, without harming service.
The package of legislation the Council passed today aims to achieve four goals:
Ensure drivers are paid enough to make ends meet: Right now, 85% of Uber and Lyft don’t earn a living wage. These drivers are independent contractors, so they pay their own expenses (e.g. gas, car lease, maintenance) and have zero paid time off or other benefits. Most FHV drivers work full-time hours, but suffer from low pay and high company mark-ups that generate huge returns for investors, but leave drivers in poverty.
Maintain the level of service provided today, especially in outer boroughs and communities underserved by transit: App-based FHVs have been a game-changer for many families, and we want to keep it that way. Some basic facts tell the story here. There are 13,587 yellow taxis. Back in 2015, when the Council first considered regulation, there were about 15,000 app-based FHVs (Uber, Lyft, etc). Today, there are 80,000 app-based cars on the road. As a result of that growth, they are now empty between 40 - 50% of the time. There are more than enough FHVs on the road right now to provide good service, but we need to make them more efficient.
Reduce congestion: That 500% increase of FHVs in the past three years flooded our streets with new cars, adding 65-100 new vehicles every single day. While the new cars on the road have improved mobility, these cars have also clogged Manhattan’s central business districts, causing an overall 160% increase in miles driven on City streets. A report found that around half the time, most of these 80,000 vehicles are driving around without any passengers, increasing congestion and emissions while they wait for us to hail a ride.
Improve accessibility: New York City’s transportation options are notorious for failing to serve people with disabilities. These app-based companies are no exception. According to a recent report, Uber & Lyft were only successful in providing an accessible vehicle 26% of the time -- three quarters of the time, the app failed completely, stranding riders in wheelchairs with no other option. And when they did dispatch an accessible car, the average wait time was 17 minutes, compared to just 4 minutes for regular service. Out of the total 100,000+ for-hire vehicles on the road, the Taxi and Limousine Commission (TLC) estimates that just 0.5% of them are wheelchair accessible.
So, after a lot of research, and a lot of listening, here’s what we’re going to do:
Require minimum payments for drivers: I’m proud to be the sponsor of Intro 890-2018, which will require that Uber, Lyft, and the other app-based companies guarantee their drivers a living wage of at least $17.22 per hour, which is designed to cover the drivers’ expenses and still provide the equivalent of $15 hourly pay. Backed by extensive research, this would increase pay among these drivers by an average of 22.5%. This bill will also make NYC the first place in the country to apply minimum pay standards to independent contractors, further strengthening the safety net for workers in NYC’s rapidly expanding gig economy.
There will be a very modest impact on riders: wait times are projected to increase 12 - 15 seconds, and fares could rise by less than 5%. Isn’t that worth bringing tens of thousands of people out of poverty?
My bill will also allow for the TLC to set standards that incentivize rides in underserved neighborhoods and accessible vehicles, and ride-sharing to improve service in outer boroughs & for people with disabilities, and to reduce emissions.
Hitting pause on licencing new app-based drivers. With over 80,000 FHVs already on the road, Council Member Steve Levin’s bill, Intro 144, will simply hit pause on bringing new cars onto the road for one year, giving the Taxi and Limousine Commission time to develop a standard for ensuring that the supply for app-based rides matches the demand. As this new report states, 50% of the time, these cars are driving around empty without any passengers. Even without licensing any new vehicles over the next 12 months, these companies could still increase service by 35 percent while the City collects more data on how to address the complex issue of reducing congestion on our streets.
At the end of the year, I’m optimistic that the TLC will come up with a smart approach to ongoing regulation. One idea is an “efficiency target.” Rather than a hard cap, they might require that each FHV company reduce the amount of time cars are driving around empty. But we need the one year pause to get there.
Allow and encourage new accessible vehicles: Council Member Levin’s bill will still allow for the TLC to issue new licenses to Uber and Lyft for wheelchair accessible vehicles -- and we will also be waiving licensing fees for these new cars. The goal is to get from 0.5% up to 25% accessible vehicles, and provide genuinely equivalent service to New Yorkers who need it.
I genuinely believe these bills will deliver concrete improvements that will benefit riders and drivers alike. And I promise to keep a close eye on what happens as the bills go into effect.