Lyft, a ride-sharing company, has filed a lawsuit trying to block New York City’s Taxi and Limousine Commission from implementing a new law that raises the minimum wage for ride-sharing drivers to $17.22 per hour.
Because Uber has a larger share of the market, the law unfairly gives that company an advantage, Lyft argues. Ride-sharing company Juno has filed a similar lawsuit.
A driver’s union disputes that claim and says Lyft is only trying to drive down the wage. New York’s law could become a model for other cities.
The Independent Drivers Guild, which represents about 70,000 “app-based drivers” in New York City, says Lyft’s lawsuit is just an attempt to keep costs down.
Advocates say ride-sharing company drivers currently earn less than $12 an hour after expenses.
The $17.22 minimum wage was determined by starting with a $15 minimum wage and adding to it to cover payroll taxes and a “utilization rate” based on how often drivers have a customer in their car.
Because the minimum wage is for all hours spent in the car, Lyft claims that the increase favors Uber since it has more money and can better implement the increase. It claims that smaller rideshare companies won’t be able to compete with prices or in areas that are less populated.
Lyft also says it is unfair to calculate a minimum wage for each ride and not for weekly usage.
For its part, New York City says the law protects the drivers with minimum income protection.
The Wall Street Journal reports that New Yorkers are served by about 13,500 taxis, 30,000 liveries and black cars, and 80,000 ride-sharing vehicles. It adds that Uber, Lyft, Juno and Via account for 75 percent of the ride-sharing business in New York. Ride-sharing trips in the city went from 42 million in 2015 to 159 trips in 2017
As ride-sharing becomes an even bigger part of the city landscape, efforts to organize the drivers are more important so they can maintain their rights. Attorneys with knowledge of union law are key to making sure every driver is fairly represented.