Uber plans to stop blocking drivers from signing on to the app in New York City. This will ensure all drivers have access to the app during the coronavirus pandemic, so the rideshare company can meet demand while other drivers are taking sick time.
According to The Verge, Uber began restricting drivers’ access to the app in 2018 when the city passed a law requiring ridesharing companies to pay drivers at least $17.22 per hour after expenses. The law also penalizes companies for enabling too much car traffic. It was enacted in an attempt to increase pay for drivers while addressing the oversaturated market in the city.
The law’s pay formula uses a utilization rate to account for the share of time a driver spends with passengers in their vehicles compared to time spent idle waiting for a fare. The higher a company’s utilization rate, the less it has to pay drivers to meet the minimum wage requirement.
In response to the law, Lyft began limiting drivers’ access to the app. Uber followed with their own restrictions after drivers who were kicked off the Lyft app began logging into Uber.
Now, however, Uber plans to stop booting drivers off the app. With uncertainty surrounding the pandemic, an Uber spokesperson had this to say about the decision: “The last thing drivers should have to worry about right now is whether they can use the app, so we have decided to lift the current restrictions. In these difficult times, driver well-being is at the top of our minds, and we will continue to look for ways to support them wherever possible.”
It has yet to be seen if there will be enough ride demand to meet the potential influx of Uber drivers. According to Uber CEO Dara Khosrowshahi, gross booking in Seattle are down 60 to 70 percent in response to the spread of the virus. It’s likely that figure could be extrapolated to New York City – which has been hit particularly hard by Covid-19. If the demand for Uber rides continues to decrease in New York City, Uber will need to pay their drivers more per the city’s utilization rate. As of now, however, the company is uncertain what the next few weeks and months will look like.
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