Lyft sues to block NYC’s driver minimum wage law

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The Taxi and Limousine Commission voted in December to create an hourly minimum wage of $17.27 for all ride-share-app drivers in the city.

While Uber has a higher utilization rate than Lyft or Juno, for the first year of the program, all three companies would operate under its utilization rate of 58%.

Two app based ride hailing companies are suing New York City to keep a new minimum wage for drivers from going into place on Friday.

The calculation takes into consideration a "utilization rate" based on how often drivers on a platform have a customer in the auto - and Lyft is taking issue with this. The amount covers the $15 minimum wage, a driver's gas, vehicle costs, miles traveled and time driving.

Commenting on the issue, Campbell Matthew, Communication Manager, Lyft, said that their lawsuit does not target the City Council's newly passed law, but instead opposes the way the TLC (Taxi and Limousine Commission) plans to implement these rules, which would eventually give Uber a competitive advantage in the New York City all at the expense of drivers and smaller ride-hailing firms such as Lyft. The Independent Drivers Guild, which represents more than 70,000 ride-hail drivers in New York City, said it believes these lawsuits are just a ruse to not pay drivers more. It will make it more hard for smaller companies to compete on prices and payment for drivers, as well as continue to service less populated areas, the petition said.

Without giving specific rate increases, Uber said "to account for the implications of this new rule, we will be increasing the price of Uber trips in NYC". "They've failed repeatedly, and the TLC should not assist them in their efforts". The reasoning is that because Uber has more drivers and is more widely used than Lyft, it's easier for Uber drivers to reach the $17.22 threshold without Uber having to incur any additional expenses to make up the difference.

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"The idea that this lawsuit is about anything other than avoiding paying drivers a fair wage is laughable", said Jim Conigliaro, Jr. The greater the "utilization rate"-the percentage of time the auto is occupied-the less the ride-hail service has to contribute to meet the pay threshold".

Both Lyft and Juno have criticized the formula as benefiting Uber, which is by a huge margin the largest of the three main ride-hail operators.

Uber had stayed silent on its competitors' lawsuits but in its blog post, Uber makes clear that while it is complying with the new law, it's not satisfied with how the TLC has applied the new driver pay minimum either.

"Judge Andrea Masley offered Uber the chance to join Lyft and Juno in keeping a portion of drivers' earnings in a lockbox account while their suits moved forward", it said through a spokesperson.

Juno didn't respond to an email seeking comment. Lyft, which is smaller with services only in the United States and Canada, seems to be focusing on being a stable company with ride-hailing as its core business.

The minimum-wage rule is part of Mayor Bill de Blasio's effort to cap the growth of the app-based vehicle services and reduce traffic congestion.

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