Nearly 10,000 NYC Uber and Lyft cars controlled by leasing companies, pushing up driver costs; ‘You’re a slave to the vehicle’
City regulations limiting the number of Uber and Lyft cars have fueled an industry shift toward leasing that drivers say makes it harder to enter the business and earn a living.
Nearly 10,000 of the city’s 75,000 rideshare cars are now controlled by just three leasing companies, according to a Daily News analysis of Taxi and Limousine Commission data.
Drivers say they typically pay $400 to $500 a week to lease cars with scarce TLC license plates. Rental fees for larger or more luxurious vehicles intended for services like Uber XL can cost at much as $700 a week. In interviews with The News, drivers called the rates and fees charged by the companies “predatory.”
“Pretty much you’re a slave to the vehicle,” said app vehicle driver Kevin Starkes.
Starkes, who started driving in 2017, began renting a vehicle from American Lease & Management for $400 a week. Unsatisfied, he said he switched over to a firm called Buggy two years ago. He’s now paying $515 a week to drive.
On average, Starkes said, he’s driving 60 hours a week to make ends meet.
“There’s no way you can make it work driving five days a week,” he told the Daily News. “I’ll be lucky to walk home with $400 after six or seven days [of driving] a week.”
The data suggest that most Uber and Lyft drivers still work independently, without involvement of a leasing company.
But over time — beginning before the TLC imposed the license plate cap — leasing companies began building fleets of cars with TLC plates, say people involved with the industry.
The leasing companies’ accumulation of a large portion of plates predates the license plate cap, which was enacted in 2018 by the City Council and then-mayor Bill de Blasio with wide support from drivers. A year later, it was extended by the TLC.
The license plate cap has tightened the fleets’ influence in the marketplace for cars that can be driven for Uber and Lyft, says industry expert Bruce Schaller.
As the industry has evolved, new Uber or Lyft drivers — who because of the cap have a harder time getting their own cars with TLC plates — now have few options beyond leasing.
Uber’s website directs prospective NYC drivers to lease cars from one of the big-three leasing juggernauts: American Lease & Management, a company that controls 4,679 cars; Voyager Global Mobility, which, through its subsidiaries Buggy and Fast Track Leasing, controls 3,852 cars; and Tower Leasing, the next largest fleet, controlling just over 1,000 cars.
Schaller believes the situation echoes what happened in the yellow cab business. Over decades, a handful of owners came to control thousands of scarce yellow taxi medallions, and thus the livelihoods of many drivers.
“You’ve empowered middlemen to put the squeeze on drivers,” said Schaller, a transit consultant and former official at the Taxi and Limousine Commission and the city Department of Transportation.
Schaller called for the TLC to do away with its cap, and resume issuing new plates for rideshare cars.
“The cap gets us where we are — which is where we ended up with the yellow cabs,” he said. “It’s deja vu all over again.”
In a statement, Jeremy Moskowitz, executive vice president of Voyager Global Mobility, described his firm as a “driver-centric company” that offered rideshare drivers flexibility with week-to-week rentals.
An American Lease & Management spokesman did not respond directly to questions posed by The News, but said in a statement that the company sought to provide drivers “the ability to earn a living.”
“We rent the vehicles at competitive rates,” spokesman Bob Liff said.
An Uber spokeswoman said the rideshare giant had no financial relationship with any of the leasing firms.
“We’ve long advocated that the TLC should allow tenured existing drivers who rent the ability to plate their own individual vehicles so that they no longer have to lease,” Uber spokeswoman Freddi Goldstein said in a statement.
Uber and Lyft have long opposed the TLC’s license plate cap.
Rideshare driver Rigzin Gurung told a TLC hearing in January that he was paying $450 a week to lease his car.
“We have to work every day, 14, 15 hours, seven days. I don’t have any time for my family,” said Gurung, who like many in the business drives for both Uber and Lyft.
Arifa Tirmizi, a mother of seven, told The News that the stress of renting made her stop driving Uber for a living.
“I thought I would have a stroke or something,” Tirmizi said of her year renting from Tower Leasing. “I was earning, and all of the money was going to them.”
Starkes and Tirmizi both said the leasing companies install equipment in cars that allows the vehicle to be deactivated remotely if the driver misses a payment — and that when a company turns a car off, it often takes a day or more to resolve the issue, putting a driver further in the hole.
“Every week they’re ready to cut your car off,” Starkes said.
Moskowitz confirmed that both Fast Track and Buggy remotely disabled cars if drivers missed their weekly payments. But he said the company worked with drivers on a payment plan, and that cars were turned back on quickly after payments were made.
“We want our drivers to stay in their cars,” he told The News. “You can hit a button and pay [through our app], and your car will be turned back on in 30 seconds.”
Cars are never disabled while in motion, Moskowitz said. “Whenever possible, we create a realistic payment plan that allows the drivers to keep the vehicle but also allows us to responsibly run our business,” he said.
Leasing companies charge other fees to drivers. “Re-possession fees, lost key fees, unscheduled return fees, toll and ticket fees, and damage fees/deductibles are all part of doing business,” said Moskowitz. The fees are “absolutely not predatory,” he said.
American Lease & Management did not address questions about disabling vehicles, and Tower Leasing officials did not respond to queries from The News.
Medallions for New York City’s yellow cab industry were limited to 11,787 for decades — from the end of the Great Depression in the 1930s up to 1996, when the city began to slowly auction off more. Currently, 13,587 medallions are in circulation.
The license plate cap is different. The most notable difference, Schaller said, is that unlike taxi medallions, TLC rideshare plates are not transferable from one owner to another, and therefore can’t be sold.
At the height of their value, medallions commanded prices of over $1 million for their owners, who included many independent operators. The arrival of the rideshare services in the 2010s quickly eroded the medallions’ value, leaving many taxi drivers who borrowed against their medallions’ value under water.
Bhairavi Desai, head of the New York Taxi Worker’s Alliance, which has fought to regulate medallion and vehicle leasing fees for yellow cabs, defended the plate moratorium as a way to protect drivers’ jobs.
“There’s a very simple solution to all of this — the TLC needs to have a cap on [prices for] for hire vehicle leasing and financing,” Desai said.
“Since 2018 we have been saying to the city, ‘Why does a Toyota Camry that is painted yellow and has a medallion have a rental and financing cap, but a Toyota Camry painted black with a TLC plate does not?’” Desai said.
Officials at the Independent Drivers Guild — a joint creation of the International Association of Machinists and Uber corporate — take a different tack, calling on the TLC to limit the number of rideshare drivers by limiting TLC-issued driver licenses.
“Limiting licenses makes drivers more valuable,” IDG spokeswoman Moira Muntz said. “Limiting plates makes cars more expensive.”
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City officials are aware of the burden the leasing system places on Uber and Lyft drivers. The TLC says it takes seriously overcharging allegations, and encourages drivers to report any arrangements they felt to be criminal.
A TLC spokesman noted that the average monthly pay for Uber and Lyft drivers was $4891.54, plus an average of $287.84 in tips. The data was collected in October, and is the most recent available. Since then, the TLC adjusted the minimum required pay rate for rideshare drivers to account for inflation and increased maintenance costs, amounting to an 8.78% raise.
The TLC tracks leasing rates in its annual reports on the plate pause, and cited those rates in its decision to release 1,000 additional plates this month earmarked for electric vehicle use.
The agency said 25,000 applicants applied last week for the first 600 electric vehicle plates — all of which are reserved for individual applicants with no prior plates.
Purchasers of the remaining 400 plates — which become available on Wednesday — will be limited to 25 apiece.
On its Twitter account last week, the TLC showcased Ruixuan Zhang of Flushing, Queens, who it said was the first driver to receive a new plate.
“Ruixuan was previously paying $2000 a month to lease, now he’s paying only $500/month to own his own EV!” the agency tweeted. “That doesn’t even count his savings on gas!”