New York City sets minimum pay for rideshare drivers

June 20, 2025 01:12 PM PDT | By EODHD

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New York City sets minimum pay for rideshare drivers — Image source: Kalkine Media

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[Vehicle offering rides for UBER and LYFT] Sundry Photography New York City drivers for Uber (NYSE:UBER [https://seekingalpha.com/symbol/UBER]) and Lyft (NASDAQ:LYFT [https://seekingalpha.com/symbol/LYFT]) will get a minimum pay hike of 5% under a new set of rules established by the city’s Taxi and Limousine Commission (“TLC”). The city agreed to a lower rate than the originally proposed 6.1% following pushback from Uber (NYSE:UBER [https://seekingalpha.com/symbol/UBER]) and Lyft (NASDAQ:LYFT [https://seekingalpha.com/symbol/LYFT]), which argued that a higher minimum wage would lead to increased fares for riders. The pay increase is part of a set of new rules protecting rideshare drivers from being locked out of the app during periods of low demand. Rideshare companies must also give drivers 72 hours notice before being locked out. In an effort to keep costs down, Uber (NYSE:UBER [https://seekingalpha.com/symbol/UBER]) and Lyft (NASDAQ:LYFT [https://seekingalpha.com/symbol/LYFT]) began locking drivers out during non-peak hours to avoid compensation for time spent driving to the next pickup and time spent waiting for the next passenger.

According to Bloomberg, the lockout periods extended into all hours, not just non-peak hours, “causing financial and mental stress for drivers, most of whom work full-time.” This prompted the TLC to close the regulatory loophole that allowed for rideshare lockout periods that artificially inflated the utilization rate…fewer drivers meant higher utilization rates. “While these changes are a step in the right direction, we still have concerns that the underlying pay formula will still deprive drivers of earning opportunities, drive up prices for riders and reduce ride availability, which isn’t good for anyone — especially the drivers who depend on steady demand to make a living,” Lyft spokesperson CJ Macklin was quoted as saying by Bloomberg. Shares of both Uber (UBER [https://seekingalpha.com/symbol/UBER]) and Lyft (LYFT [https://seekingalpha.com/symbol/LYFT]) reacted negatively to the news, but have recouped some of their earlier losses. MORE ON UBER, LYFT * Lyft: In A Very Tough Setup [https://seekingalpha.com/article/4794813-lyft-in-a-very-tough-setup] * Uber: Not Late To The Party [https://seekingalpha.com/article/4792847-uber-stock-undervalued-strong-long-term-growth-potential] * Lyft, Inc. (LYFT) BofA Securities 2025 Global Technology Conference (Transcript) [https://seekingalpha.com/article/4792310-lyft-inc-lyft-bofa-securities-2025-global-technology-conference-transcript] * Uber expands AI data platform to train smart agents [https://seekingalpha.com/news/4460017-uber-expands-ai-data-platform-to-train-smart-agents] * WeRide signs MoU with Dubai, Uber for pilot AV program [https://seekingalpha.com/news/4458479-weride-signs-mou-with-dubai-uber-for-pilot-av-program]

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