Lyft is committed to doing our part to improve the quality of life in American cities. We're proud of the impact we've had to date, especially for New York riders underserved by traditional taxi services and people looking for access to meaningful work. Our goal is to both do well and do good.
Last week, we took an important step to protect our community and preserve rideshare competition. We filed a lawsuit to forestall implementation of a new New York City Taxi and Limousine Commission (TLC) regulation that we believe is bad for drivers, bad for riders, and bad for New York.
The City Council's original policy goals are to increase overall driver earnings and reduce congestion, both goals that Lyft shares and agrees with. But the specific implementation from the TLC will achieve the exact opposite. Here’s why:
The TLC’s approach hands Uber a massive advantage at the expense of smaller players. The plan undermines smaller players like Lyft and Juno by allowing Uber, the market leader, to charge lower prices and undercut its competitors. Lyft argues for industry-wide standards that ensure a level playing field for all companies, so we can compete fairly for drivers and riders.
The TLC’s approach will reduce driver earnings. We believe in a weekly pay standard to keep prices steady, preserve demand for rides, and protect long-term driver earnings. The TLC’s approach to payment does not properly account for drivers using multiple apps, demand fluctuating in different parts of the city, or the drop in rides drivers will see over time as rider prices increase.
The TLC’s complicated formula actually exacerbates congestion. The way the TLC structured the pay formula pays drivers more for shorter, slower rides than for longer rides. This means drivers are incentivized to drive in areas with the most congestion, like Manhattan’s Central Business District.
The judge in our case agreed with us that the TLC's method of calculating pay could cause us irreparable harm and as a result, allowed us to pay drivers using our recommended plan. In this interim period, there were questions around how it would work.
To remove any doubts as the legal case proceeds, we’re updating driver rates in New York City to more simply reflect the new TLC rate card. We stand by our arguments that the TLC’s specific implementation of the rules will be detrimental, and we’ll continue to defend them for New York’s riders and drivers.