Uber and Lyft Locked Out New York's Driver Wage Law

Subhead:

The city’s unique pay formula created a perverse incentive for Uber and Lyft to prevent drivers from logging on, even during periods of high demand.

The Goodhart’s Law runs strong in this one: the local law attempted to compensate drivers at an “hourly”-equivalent rate by measuring average driver “utilization” while “on duty,” then setting the minimum rate for fares so as to also compensate “unutilized” time.

The cabtech firms, unsurprisingly, dealt with this by preventing drivers from being allowed to solicit riders at all for large portions of the day, the better to cut down on their “unutilized” time. And they explain it with some deliciously maudlin pieces of PR doublespeak.

It’s kind of interesting from a modeling perspective too: if shifts were relatively continuous—as most professional drivers actually work them—maybe the supposed incentive structure would work to keep drivers busy/making money? The trouble is they didn’t imagine a firm would implement micro-furloughs…