Uber and Lyft reportedly have stopped taking new applications for drivers in New York City. The move comes after the new law which is passed to tackle the oversaturated ridesharing market.
According to Politico Uber stopped taking new driver hires on April 1 and Lyft followed the move later on April 19. The move comes after the New York City minimum wages have been revamped, both the companies have strongly opposed the regulation.
Uber has mentioned on its website that they have paused the new hiring process due to the coming regulations by Taxi and Limousine Commission (TLC) which is the governing body to regulate rideshare and taxi industry in the New York City.
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According to the new regulations passed in December 2018, the ride-hailing companies would be fined for running more cars on the roads that are in excess to the current demand. The new regulation also increases the wages of Uber and Lyft drivers and allow them to earn at least $17.22 an hour. However, if there are too many cars and drivers on the roads as compared to passengers the drivers automatically earn far less than that.
Back in January, Uber and Lyft also sued the city for imposing new regulations, the drivers on the other side are happy with the move but it also creates lesser opportunities to have jobs. The frozen hiring process is not permanent, Uber and Lyft will reopen positions once their driver strength gets low. Since the employee turnover is quite high in both Uber and Lyft, the hiring process may resume after a couple of months.