Ride-hailing companies, Lyft and Juno have reportedly filed a lawsuit against the city of NY for implementing a new law that makes it mandatory for the firms to pay drivers a minimum wage. 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.
New York City already tried to regulate ride-sharing services a year ago, citing traffic problems and lower driver wages as the reason for capping how many ridesharing drivers could be active at a time. By using utilization rates, Lyft says the rule favors Uber, the largest of the ride hailing companies.
At the heart of the complaint is a new factor in the driver earnings calculation involving something called a utilization rate, which quantifies how long a company has riders in its cars. Don't Miss: Amazon sale shaves nearly $100 off Sony's insanely popular 1000XM3 noise cancelling headphones Interestingly enough, Lyft drivers for the time being will not be able to benefit from the new minimum wage law.
As it stands, the rule would guarantee drivers at least $17.22 per hour after expenses.
The city's ruling on for-hire vehicle driver wages said Uber, Lyft, Gett/Juno and Via account for 75% of the ride-sharing business in New York City, with the overall trips booming from 42 million in 2015 to almost 159 million trips in 2017. They argue this makes it more hard for smaller companies to compete on prices and payment for drivers, as well as continue to service less populated areas.
The agency voted on a minimum pay formula in December to protect ridehailing drivers from being underpaid by companies. New York City Taxi and Limousine Commission, 151037/2019. Lyft declined to comment on whether it would do so; Juno didn't respond to an email seeking comment. "They've failed repeatedly, and the TLC should not assist them in their efforts". Founder of the Independent Drivers Guild, which advocates on behalf of about 70,000 app-based drivers in NYC. "The rules ensure minimum income protections, are fair and legal, and we'll vigorously defend them in court", a spokesman for the city's Law Department wrote.
Another ridehailing company, Juno, reportedly also filed a petition against the TLC.
Lyft stressed it is not taking issue with the minimum wage law itself but rather the implementation of it.
On an annual basis, the rules would give drivers a raise of around $10,000, supporters say. The number is based on drivers' miles traveled plus time driving, which is then divided by "utilization rate".
Lyft communications manager Campbell Matthews said in an emailed statement, "Our lawsuit does not target the law passed by City Council, but instead addresses the specific way the TLC plans to implement the rules, which would advantage Uber in New York City at the Expense of drivers and smaller players such as Lyft".
Uber had stayed silent on its competitors' lawsuits but in its blog post, Uber makes clear that while it is complying with the new law, it's not satisfied with how the TLC has applied the new driver pay minimum either.