The New York City Taxi and Limousine Commission’s passage of a minimum wage for drivers of ride-sharing services such as Uber and Lyft could raise rates for some passengers.
The new rules, the first city-wide regulations in the nation, were passed Tuesday and are expected to go into effect in mid-January. They would give drivers for services such as Uber and Lyft a minimum hourly wage of $17.22 after expenses, the commission says.
About 96 percent of the city’s 80,000 drivers who work for ride-sharing services would get a raise, the commission estimated.
Uber and Lyft issued statements in support of a living wage for drivers, but said the new rules could also drive up prices for passengers.
“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,” Uber director of public affairs Jason Post said in a statement.
The commission’s formula factors in drivers’ total working time and time spent transporting fares to increase efficiency and reduce the time drivers spend circling busy areas while awaiting fares.
But the formula, which uses a minimum per trip formula, could actually increase congestion because it encourages drivers to take more short rides in Manhattan’s central business district, rather than longer ones to other boroughs, the ride-sharing companies say.
“These rules would be a step backward for New Yorkers, and we urge the TLC to reconsider them,” Lyft said in a statement.
New York’s City Council authorized the TLC to set pay standards in August at the same time that it approved a cap on new vehicle licenses for ride-hail services.
The 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,” TLC Chair Meera Joshi said in a statement. “Companies are saying paying drivers fairly will cause longer wait times and higher prices. But I believe all New Yorkers are willing to pay a little more and wait a little longer so the people transporting them are able to provide for themselves and their families.”