Rideshare companies sue NYC Taxi and Limousine Commission over minimum wage

by Bamidele Ogunberu Posted on February 1st, 2019

New York City: Lyft and Juno, two ride-sharing companies operating in New York City, have filed separate lawsuits against the New York Taxi and Limousine Commission to block a new rule proposed by the commission mandating a minimum wage per trip.

The rule proposed by the commission creates a new minimum wage based on a per-trip formula. Drivers would be paid a set minimum per trip (around $17.22 per trip after expenses or $27.86 before expenses) with a higher rate based on driver utilization (how often a driver is waiting for a dispatch). Drivers would then also receive an additional bonus for shared rides to compensate for the lower profits typically made on shared rides. The per-trip formula would be determined on an individual company basis by the commission. These provisions are what Lyft and Juno have taken issue with.

In its suit, Lyft accuses the commission of bias toward Uber. Specifically, Lyft states: “The formula codified in the Minimum Payment Rule gives the largest company an automatic and perpetual advantage over smaller companies.” Lyft argues that the higher utilization will allow Uber to pay drivers less thereby undercutting smaller companies like Lyft.

Juno argues in a separate suit that even if the utilization rule was not inherently unfair, it is still based on flawed data. Juno calls out the commission’s reliance on only one flawed study as a faulty basis for the rule it intends to propose. Juno claims that the study focused on drivers exclusive to individual companies which is a rarity in the ride-share industry. Additionally, Juno believes that even while spreading the utilization rate across all companies a driver is logged into, the utilization rate will still result in Uber being able to pay drivers less than Juno is required to pay. Juno is claiming this ignores the company’s existing policy of paying drivers more and treating them more ethically than its competitors.

The suits will seek to stop the implementation of the law which is currently set to take effect February 1.

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Bamidele Ogunberu

Bamidele Ogunberu

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