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Uber warns that thousands of New York City drivers may lose their jobs if the city’s Taxi & Limousine Commission (TLC) goes forward with planned pay increases for rideshare drivers.
The company claims the changes could make its services unaffordable for customers. The warning, shared on Uber’s blog, emphasized that fare increases, aimed at improving driver wages, may inadvertently reduce trip volumes and limit drivers’ income opportunities.
In a recent post, Uber’s senior economist Rodrigo Moser said: “It’s time for our governing bodies to wake up. You can increase prices all you want — but if fewer people are taking fewer trips, you end up hurting the people you’re trying to help.”
Uber didn’t specify exactly how many drivers could be affected but suggested that the impact could be significant. According to a company spokesperson, the potential deactivation of drivers could reach into the thousands, depending on the nature of the new wage regulations.
New rideshare pay deal
The TLC is currently expected to announce revised pay standards for drivers working for “high-volume” services like Uber and Lyft. The rideshare giant has proposed a 6% decrease in the current per-mile rate for drivers, arguing that lower fuel prices and reduced inflation since previous wage adjustments justify the cut.
Uber contends that the city’s existing pay formula, based on a “utilization rate” — a complex measure of the time drivers spend with passengers compared to total time on the road — is problematic. The company argues that the system, which influences minimum pay standards, doesn’t accurately reflect drivers' expenses and causes rates to fluctuate in a way that makes rideshare services costly for customers.
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The transportation agency has defended its position, with a spokesperson stating that an independent analyst has been hired to study drivers’ expenses. This analysis, they say, will inform final wage regulations.
“We have hired an independent contractor to study driver expenses, and we will see what that study finds before accepting cherry-picked data,” said a TLC spokesperson, who added that Uber's claims reflect a “cherry-picked” use of data meant to influence public opinion ahead of regulatory changes.
The TLC also criticized Uber for recruiting thousands of drivers over recent months, accusing the company of aggressively onboarding new drivers after the lifting of a for-hire vehicle cap, only to then limit these drivers’ app access - a practice that drivers and their advocates have referred to as “lockouts.”
Uber lockout criticism
Critics claim that Uber and Lyft periodically lock out drivers to manipulate the utilization rate, potentially lowering wage requirements. Uber has denied these allegations, however, asserting that fluctuations in driver access are driven by regulatory constraints rather than company policy.
Meanwhile, representatives of driver groups argue that the proposed wage increases are necessary to support workers who are grappling with rising costs.
Speaking to amNY, Bhairavi Desai, executive director of the New York Taxi Workers Alliance, said: “Uber is straight out lying and using scare tactics to hold drivers hostage to poverty. Uber relies on an oversaturated workforce to get an advantage in being the mode of transport that catches the fare. Uber needs the drivers. The show it’s putting on now is because they don’t want to pay the drivers. It’s pretty simple.”
The Independent Drivers Guild recently surveyed its drivers, and results indicated that a large majority reported reduced earnings and heightened financial stress over the past summer. "Uber is dead wrong for trying to avoid paying drivers a minimum wage,” said IDG president Brendan Sexton. “No industry should be allowed to exploit workers by paying less than the minimum wage. Uber keeps grabbing more and more of the fare while they try to starve drivers.”
The potential layoffs underscore a broader debate about the gig economy and contract work. Unlike traditional employees, Uber drivers lack key employment protections, such as severance pay or unemployment benefits. This lack of stability highlights the challenges contract workers face when navigating workforce changes, making fair treatment during layoffs a central issue for maintaining public trust in large employers. For Uber, the coming months may test not only its business model but also its reputation in how it manages this transition and treats its drivers amid regulatory change.
