New York City’s Taxi and Limousine Commission just voted to set a minimum wage for app-based drivers working for companies like Uber and Lyft. The new policy requires drivers to make $17.22 per hour— $15 minimum wage, plus paid time off —which could result in a pay raise of over $9,000 annually.
The historic decision comes from a TLC study revealing most drivers currently take home roughly $11.90 per hour after expenses. Drivers are legally independent contractors and therefore are not protected under minimum-wage laws. The new rule is set to go in effect in 20 days.
Economists developed a formula that would factor in trip mileage and time plus the percentage of time drivers have customers.
Labor non-profit Independent Drivers Guild has been organizing to increase pay for app-based drivers for the past two years.
“Today we brought desperately needed relief to 80,000 working families. 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,” said Jim Conigliaro, Jr., founder of the Independent Drivers Guild, said in a statement.
Ride-hailing giant Uber released a statement noting the wage increase “will lead to higher than necessary fare increases for riders.” The company calls the new rule a missed opportunity to deal with congestion in New York City’s busiest business districts.
“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’s director of public affairs, Jason Post, in a statement.
Lyft expressed similar concerns telling The Verge “These rules would be a step backward for New Yorkers, and we urge the TLC to reconsider them.”
