The Federal Trade Commission reportedly launched a last-minute probe into whether Uber and Lyft illegally colluded to keep New York City driver pay lower — an inquiry launched on the same day that Lina Khan announced she was stepping down as chair of the agency.
The FTC regulators on Jan. 21 issued civil investigative demands, which function similarly to subpoenas, requiring both companies to submit information regarding an agreement they reached with Big Apple officials over driver compensation, Bloomberg News reported on Thursday.
Khan, a progressive nominated by President Joe Biden, stepped down as FTC chair on Jan. 21.
Uber and Lyft were told they had to respond within 30 days of the order.
With Khan’s departure, the future of the investigation now lies in the hands of FTC Chair Andrew Ferguson, who was nominated by President Donald Trump.
Josh Gold, a spokesperson for Uber, told Bloomberg that the company received the request.
“We are confident that our actions here were reasonable and appropriate under New York City rules,” Gold told Bloomberg News.
He added that Uber intends to cooperate fully with FTC staff to provide the requested documentation.
Similarly, Lyft acknowledged receiving the inquiry.
Company spokesperson CJ Macklin emphasized Lyft’s commitment to following federal antitrust laws.
“We take antitrust law very seriously and have fully complied throughout this process,” Macklin told Blomberg News.
The Post has sought comment from Khan, the FTC, Uber and Lyft.
Following news of the regulatory probe, both companies saw declines in their stock prices.
As of 1:30 p.m. in New York, Uber shares had dropped by 1.24% to $65.94 a share, while Lyft stock fell by 1.41% to $13.24.
In July, Uber and Lyft agreed with the city to reduce ride-share “lockouts” affecting driver earnings.
Lockouts, a practice in which drivers are temporarily barred from logging into their ride-hailing apps, had been criticized for significantly reducing the amount of paid working hours recorded before the city’s minimum pay calculations for drivers.
Although Uber and Lyft signed the agreement with city officials, Uber’s spokesperson maintained that there was never a direct deal between the two competing companies.
“We were neither conspiring nor was our goal to limit driver pay,” Gold told Bloomberg News.
However, a press release from the office of New York City Mayor Eric Adams at the time referred to an “agreement” with Uber and Lyft, raising questions about whether this constituted unlawful coordination between two dominant market players.
According to an FTC staff memo obtained by Bloomberg, such an agreement could violate antitrust laws if it led Uber and Lyft — direct competitors — to coordinate on driver pay structures.
The FTC has not launched an investigation into New York City officials, but part of the inquiry will focus on the extent of the city’s involvement in brokering the agreement.
Regulators want to determine whether city officials’ participation shields Uber and Lyft from antitrust liability or if their actions amounted to an improper facilitation of anti-competitive practices.
While FTC investigations do not always result in legal action, the agency can bring civil complaints in federal court or pursue enforcement proceedings in administrative hearings.
Ferguson, who upon entering office pledged to “end Big Tech’s vendetta against competition and free speech” and “make sure that America is the world’s technological leader and the best place for innovators to bring new ideas to life,” has the authority to proceed with the inquiry, slow its progress, or close it entirely.
As part of its investigation, the FTC has requested communications between Uber, Lyft, the mayor’s office and the New York City Taxi and Limousine Commission (TLC).
Regulators also requested a copy of the agreement that led to the end of the lockout system.
The New York City mayor’s office declined to comment, referring all questions to the TLC.
TLC spokesperson Jason Kersten defended the city’s stance on driver pay, emphasizing that New York was the first city in the US to implement minimum pay regulations for ride-hailing drivers.
“New York became the first city in America to pass minimum pay rules for hardworking ride-share drivers in order to protect them and ensure they are fairly compensated, and we continue to strengthen those protections,” Kersten told Bloomberg News.
He added that the latest policy changes were designed to ensure that drivers earn a living wage for all hours they are available to work, even when they are not carrying passengers.
“As promised, we have introduced new rules designed to deter future lockouts by the multibillion-dollar companies who have exploited loopholes in our regulations,” Kersten said.
The TLC is currently reviewing public comments on these new regulations and is scheduled to hold a public hearing on Wednesday to discuss the matter further.
In October, an investigation by Bloomberg News found that Uber and Lyft systematically used lockouts to prevent drivers from logging into the platform, effectively reducing the number of hours counted toward minimum wage calculations.
This practice, according to critics, saved the companies millions of dollars in labor costs at the expense of drivers.
As part of the July 2024 deal announced by Adams, Uber agreed to phase out lockouts — but only on the condition that Lyft increased the amount of time its drivers spent transporting passengers to at least 50% of their total working time.
TLC Commissioner David Do previously described the agreement as a short-term solution, acknowledging that additional measures might be needed.
According to Uber’s spokesperson Gold, the company fully ended its lockout practices in September 2024, while Lyft also confirmed it has recently ceased lockouts, according to Macklin.
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