New York City’s Taxi and Limousine Commission (TLC), which regulates for-hire vehicles in the Big Apple, voted to set a minimum wage for drivers working ride-hailing services like Uber and Lyft. New York is the first United States city to mandate a minimum wage for ride-hailing drivers.
The minimum wage rule goes into effect in 20 days and requires companies to pay drivers at least $27.86 per hour, or $17.22 per hour after expenses. According to a recent TLC-commissioned study, drivers currently average $11.90 per hour. The move was applauded by the Independent Drivers Guild (IDG), an advocacy group that claims to represent more than 70,000 ride-hailing drivers in New York City.
“We are thankful to the Mayor, Commissioner Joshi, the Taxi and Limousine Commission, City Council Member Brad Lander, and all of the city officials who listened to and stood up for drivers,” IDG founder Jim Conigliaro Jr. said in a statement.
In a statement, Uber said the minimum wage policy would likely lead to fare hikes. The company claimed the new rule does not account for incentives and bonuses given to drivers, adding that the rule does not directly address traffic congestion or availability of vehicles in the Outer Boroughs—the four New York City divisions outside Manhattan.
“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,” the mobility giant said.
Lyft, meanwhile, was opposed to the ruling as it released in a statement: “These rules would be a step backward for New Yorkers, and we urge the TLC to reconsider them.” Like Uber, Lyft believes a minimum wage would lower availability in New York’s Outer Boroughs, claiming drivers would have less incentive to take longer trips.
In contrast to Uber and Lyft, Via said in a statement to The Verge that it supports a driver minimum wage, saying that “we look forward to working with the TLC on implementing this rule.” Via, which is a much smaller company than Uber or Lyft, claimed to already be paying drivers more than the $17.22 minimum wage when the TLC-commissioned study was released earlier this year. Via has ties to Mercedes-Benz, and its fleet is comprised primarily of the German automaker’s Metris vans
The TLC’s ability to set a baseline pay for ride-hailing drivers was approved in August as part of a package of legislation that also set a cap on ride-hailing vehicles. That cap is the first of its kind in the United States. New York is one of the biggest markets for Uber and Lyft, but city officials are also taking a very aggressive stance when it comes to regulating ride-hailing.