The Taxi and Limousine Commission (TLC) of New York City voted in November to raise the pay rates for Uber and Lyft drivers in order to compensate for increases in inflation and operating expenses. On December 19, the new prices were to go into effect, but Uber has now filed a lawsuit against the commission to prevent that from happening. According to Bloomberg, Uber claimed in its lawsuit that if the higher rates are put into effect, it would have to spend an extra $21 million to $23 million each month and that it wouldn’t be able to recover those expenses without increasing charges.
To note, drivers’ per-minute rates are going up by 7.18 percent and per-mile rates by 16.11 percent under the new rules. That means for a 7.5-mile trip that takes 30 minutes, a driver would earn at least $27.15, which is $2.50 more than current rates. The drivers are also getting another pay bump in March 2023, based on inflation rates comparing December to September this year. A company spokesperson told AFKFree that by increasing drivers’ pay this December, TLC is locking in “this summer’s high gas prices in perpetuity.”
Freddi Goldstein, Uber spokesperson told us:
“With this latest rulemaking, on top of the annual inflation adjustment, the TLC is choosing to invent a new methodology that locks in this summer’s high gas prices in perpetuity with a ‘mid-year’ adjustment that takes place 12 days before the end of the year. The TLC should have followed its usual annual adjustment and instituted a temporary gas surcharge when gas prices were elevated.”
The company’s lawsuit seems to indicate that it intends to pass the costs associated with drivers’ pay increases to riders. “Such a significant fare hike, right before the holidays, would irreparably damage Uber’s reputation, impair goodwill, and risk permanent loss of business and customers,” its lawsuit said. In a strongly worded response to the lawsuit, TLC said acknowledged that Uber already charges 37 percent more today compared to 2019, but it said that the company is keeping money earned from fare hikes over the past few years to itself.
The commission’s statement reads: “Just in time to steal Christmas from New York families, Uber is suing to stop the raise the TLC enacted for app drivers after months of public hearings, years of stalled wages, and the pandemic decimating incomes. Uber’s Grinch move is on top of denying a fuel surcharge to only NYC drivers when costs skyrocketed due to record high inflation, forcing drivers in one of their most profitable markets to choose between groceries and fueling up.
Uber is already charging passengers 37% more today compared to 2019 AND KEEPING IT FOR THEMSELVES but says this modest raise for drivers is what will break the company. Shame on you, Dara Khosrowshahi. We call on the City to stand firm and defend the rights of drivers to labor with dignity. Uber seeks chaos. We seek dignity. We are confident we will prevail.”
The ride-hailing giant is now asking the court to declare the new pay rates as invalid and to prevent the first increase’s implementation this month while the lawsuit is ongoing.
UPDATE 12/10/22 10:53 AM: Uber clarified that it’s had rate hikes over the past years and that the per-minute increase is 7.18 percent, while the per-mile is 16.11 percent. We also added the company’s official statement.
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