The New York City Taxi and Limousine Commission has approved new rules designed to provide a minimum hourly wage of $17.22 (after expenses) for drivers who work with app-based services like Uber, Lyft, Via and Juno.
Fast Company reports that the rules try to deliver that wage by requiring drivers be paid according to a formula that incorporates mileage, time and utilization rate (the average percentage of time drivers have passengers in their cars). They also call for a higher payment when drivers have to take passengers far outside the city (to compensate for them for the return trip).
A proposed bonus payment for drivers offering Uber Pool and other shared-ride options appears to have been removed from the rules.
The Independent Drivers Guild, a labor organization that advocates for drivers, has been advocating for these changes, and it praised the TLC vote in a press release.
“Today we brought desperately needed relief to 80,000 working families,” said IDG founder Jim Conigliaro, Jr. “All workers deserve the protection of a fair, livable wage and we are proud to be setting the new bar for contractor workers’ rights in America. We are thankful to the Mayor, Commissioner [Meera] Joshi and the Taxi and Limousine Commission, City Council Member Brad Lander and all of the city officials who listened to and stood up for drivers.”
And The New York Taxi Workers Alliance issued a statement from Executive Director Bhairavi Desai:
It’s the first real attempt anywhere to stop app driver pay cuts, which is an Uber and Lyft business practice at the heart of poverty wages … Ultimately, the TLC needs to regulate Uber and Lyft passenger rates, guarantee that app drivers get 80 percent of those rates, and regulate the yellow/green meter to charge the same minimum rates, so drivers across the industry can earn a raise.
Uber and Lyft, meanwhile, criticized the decision, though with careful wording emphasizing that the companies aren’t opposed to ensuring that drivers receive a living wage.
“Uber supports efforts to ensure that full-time drivers in NYC – whether driving with taxi, limo or Uber – are able to make a living wage, without harming outer borough riders who have been ignored by yellow taxi and underserved by mass transit,” said Uber Director of Public Affairs Jason Post in a statement. “The TLC’s implementation of the City Council’s legislation to increase driver earnings will lead to higher than necessary fare increases for riders while missing an opportunity to deal with congestion in Manhattan’s central business district.”
Post argued that the rules do not account for the bonuses and other incentive payments that Uber and other companies might make. He criticized the TLC for adopting “an industry-wide utilization rate that does not hold bases accountable for keeping cars full with paying passengers.”
And here’s the statement from Lyft:
Lyft believes all drivers should earn a livable wage and we are committed to helping drivers reach their goals. Unfortunately, the TLC’s proposed pay rules will undermine competition by allowing certain companies to pay drivers lower wages, and disincentive drivers from giving rides to and from areas outside Manhattan. These rules would be a step backward for New Yorkers, and we urge the TLC to reconsider them.
Specifically Lyft says that companies would be able to essentially pay drivers less by claiming a higher utilization rate than the industry average. It also says that it will be nearly impossible to implement the higher out-of-town payment rates in the 30-day window before the new rules take effect.
Update: You can read the new Driver Income and Transparency Rules here.
“Convenience costs, and going forward, that cost will no longer be borne by the driver,” said TLC Chair Meera Joshi in a statement. “Today’s rules will raise driver earnings by on average $10,000 a year and require companies to be completely transparent on how they calculate pay and car leasing costs.”