In Ridester’s first City Guides to Rideshare Driving, we take a look at what you need to know about driving for Uber, Lyft. Juno and Via in New York City.
And that’s the first thing you need to know – there are other companies besides Uber and Lyft. Several in fact. The two biggest upstarts are Juno and Via.
Juno started out by only accepting current Uber drivers who had high ratings. Their pitch to riders was, ‘we have higher rated drivers and we pay them more so they’re happier and better taken care of.’ They pay drivers 10% more than Uber and Lyft do.
Via’s pitch was, $5 rides anywhere in Manhattan! Via’s original service was like a permanent uberPOOL. It was basically a bus service in a car. They have since added an uberX type service.
According to Slate, New York City is Uber’s “biggest market in the United States, its most tightly regulated and by far its most profitable.” It also has the highest rates and the most drivers.
Licensing and the TLC
By far and away, the most important thing drivers need to know about rideshare driving in New York City is that you have to be licensed by the city’s Taxi & Limousine Commission (TLC). This is the same licensing that taxi drivers and other “For Hire Vehicle” drivers must obtain in order to do commercial driving in the city.
The licensing process is a very costly one for drivers, taking anywhere from $2,000 to $4,000 out of their pockets each year. As a result New York City driving has a very different character than that of other cities.
Because drivers have to pay so much and go through so much extra effort to become eligible to drive, most of them drive full time. A much larger portion of drivers in New York City drive full time than they do other cities.
It’s also a super competitive market. You will often easily see five to eight cars on each and every block of Manhattan – almost 24 hours a day! And on many blocks, you can see up to as many as 15 cars.
Those are some of the reasons why Uber and Lyft have to pay New York drivers more. If the pay were any less, they would lose a huge portion of their drivers. There are currently more than 65,000 Uber and Lyft drivers on the streets of New York. This is five times more than the number of taxis. Taxis are limited to just 13,000 cars in the city. And today, thanks to Uber and Lyft, fewer and fewer of those 13,000 taxis are actually on the streets anymore.
Uber and Lyft Rates in New York City
Although rates have been greatly slashed over the last few years, Uber’s and Lyft’s rates in New York City are still the highest in the country. But after all is said and done, after drivers pay all the yearly fees they have to pay to be legal to drive, they end up making about as much as drivers in other cities do.
Uber’s Rates for New York City:
Lyft’s Rates for New York City:
Uber came into New York City about eight years ago (2010). At the time their fares were 2-3 times higher than they are now. uberX was $4.50 a mile! That’s what uberSUV is today in New York!
New Yorkers absolutely loved the service and swarmed to it like hungry bees. For the first couple of years, drivers were making a fortune! That’s because rates were what today would be considered impossibly high. And the ratio of the number of drivers to the number of passengers was very low. Meaning, there were barely enough drivers to meet the demand. So drivers were pumping out trips all day long – at $4.50 a mile! And Uber paid them 80% of the total fare back then.
For its first couple of years in New York, Uber operated illegally – as it did everywhere else. But eventually, they worked out a deal with the TLC and they became completely legal in New York – making it one of the first cities in their history where they were completely legal.
For the next several years Uber drivers had it good. They could drive in Manhattan, they could also drive in Long Island and upstate in Westchester County. All of these were great areas to drive in and it helped lessen the density of drivers in Manhattan – keeping it busy for everyone.
TLC drivers were completely legal in the City of New York, but their status outside the city was questionable. But no one ever seemed to crack down on them so they did it. Uber would send calls to TLC drivers in these other parts of New York state. And TLC drivers were the only drivers who were allowed to take Uber calls in these other parts of the state – just outside of New York City. Lyft in the meantime, did not allow their drivers to take calls outside of the city.
TLC drivers were also allowed and legal to pick up passengers in the neighboring states of Connecticut and New Jersey.
This made driving almost a paradise for New York’s TLC drivers. That’s because they could follow the crowds wherever they went. If it was a summer weekend and everyone was at the beaches in Long Island and New Jersey, well, TLC drivers could go drive there. When they came back home at the end of the weekend, TLC drivers could go back and drive in the city.
All of this came to an abrupt end in the summer of 2016 when the New York state legislature passed a bill to make Uber legal statewide.
This meant an end to the good times for New York City TLC drivers. Their territory was severely cut. They were now only allowed to do pickups in New York City proper. They could also still do pickups in New Jersey and Connecticut, but the rates in those neighboring states were almost half what they were in the city itself. However, for Black car and SUV drivers, the rates in New Jersey were actually a little higher. The rates in Connecticut were a little lower. So, Black and SUV drivers could still do pickups in New Jersey. Although that wasn’t much help since New Jersey didn’t have much demand for Black and SUV vehicles.
With New York drivers territory getting severely restricted, drivers began to pay a lot more attention to the three area airports. New York City is unique in that it has three major international airports that serve the city – JFK, LaGuardia and Newark.
Serious drivers have integrated the airports into a major part of their driving strategy. Drivers buy cars, based in part on what they think they can make on airport trips in different vehicles. Some drivers who were considering driving for uberBLACK only, have decided to go to the top of the line and have bought expensive SUVs. That’s because they believe that in addition to getting highly-paid Black car and SUV trips, they’ll also be able to snatch up a good number of XL trips from the airports.
Their strategy seems to be – drive for anything but uberX. Even XL with its slightly higher prices is attractive to these drivers.
Since the three airports each have different characteristics, strategies are built based on the different traits of each airport.
For instance, from LaGuardia, which is the closest airport to Manhattan, a trip into the city will earn a driver roughly $20. But, at night time when the number of landings really cranks up – X drivers can go back and forth to LaGuardia three or four times in a couple of hours. So they can sometimes, on a good night, average $40 an hour. At least for three or four hours.
Today, New York City drivers are squeezed into their smallest area yet, they’re competing against more drivers than ever before – at the lowest rates Uber has ever charged. Uber has also been exposed as charging passengers substantially more than they’re paying drivers for. They have effectively increased rates, without passing that increase to drivers.
Because of that, the Independent Driver’s Guild (an affiliate of the Machinists Union) is taking legal steps to urge the city to mandate some needed changes.
The IDG has submitted a petition to the TLC with demands that the TLC is required by law to consider. The TLC implements and enforces New York City’s transit rule, including the rates that taxis are required to charge.
The IDG reasons they should also take responsibility for insuring that Uber’s, Lyft’s and other rideshare company rates are set at a reasonable minimum.
IDG says they are requesting the TLC “to enact a livable minimum wage for app-based for-hire vehicle drivers.” So far, more than 15,000 people have signed the petition. They’re asking for the TLC to mandate a 37% increase in rates (which would put them back to where they were a couple of years ago). They’re also asking that Uber, Lyft and the other companies not be allowed to charge more than 20% what they’re paying the drivers. The TLC is required to respond within 60 days.
The IDG has had some success so far. They were instrumental in getting the TLC to mandate that Uber add tipping to its app. They also won the right from Uber to let deactivated drivers appeal their deactivation. And they won a concession to allow drivers of luxury vehicles to opt out of uberPOOL.
New York City, the home of more full time rideshare drivers than any other city in the nation, is leading the way on many of the reforms that are needed to make rideshare driving a viable business for drivers who choose to pursue it.