Lyft, Juno Sue Over NYC's Minimum Pay Rules For Drivers

NEW YORK — Two ride-hailing companies are suing New York City's taxi regulators over an effort to set a minimum pay rate for their drivers.

In two separate cases, Lyft and Juno are challenging the landmark Taxi and Limousine Commission rules that would ensure app-based drivers earn at least $17.22 an hour after expenses. The rules were approved last month and are set to take effect Feb. 1.

Two for-hire vehicle bases tied to Juno filed one lawsuit Wednesday in Manhattan Supreme Court, arguing the rules' reliance on a company-specific "utilization rate" — a measure of how much time drivers spend actually carrying passengers — will harm smaller companies and hinder competition in the industry.

"Although the TLC’s professed goal of ensuring that (for-hire vehicle) drivers are paid fairly is

well-intentioned in theory — and, indeed, the very goal upon which Juno has modeled its
business — the mechanism by which the TLC has committed to do so is inherently flawed and
fundamentally unfair," the petition reads.

Two Lyft bases filed a separate lawsuit against the rules Wednesday, also in Manhattan Supreme Court. The suit challenges the way the TLC wants to implement the rules, which would give an advantage to Uber, the dominant force in ride-hailing, "at the expense of drivers and smaller players such as Lyft," said Campbell Matthews, a Lyft spokeswoman.

"It's no secret that Uber has tried to put us out of business in the past. They've failed repeatedly, and the TLC should not assist them in their efforts," Matthews said in a statement.

The rules were mandated by City Council legislation that was signed into law last August alongside the city's first-in-the-nation freeze on most new for-hire vehicles.

Establishing a pay floor was meant to help struggling app-based drivers, about 85 percent of whom make less than the impending minimum rate, according to a TLC-commissioned report published last year.

Mayor Bill de Blasio slammed the lawsuits as "unconscionable."

"The overwhelming majority of these companies’ drivers earn less than minimum wage," he said on Twitter. "We won’t stand for it in New York City, and we’ll fight every step of the way to get workers the pay they deserve."

The rules established a formula that would determine how much the city's four high-volume ride-hailing apps — Uber, Lyft, Via and Juno — are required to pay drivers for each trip. The formula would incorporate an industry-wide utilization rate for the first year before the company-specific rates take hold, though a dispatch base could petition to get its own rate within that time, the rules say.

Some 96 percent of drivers working for the big four companies would get a raise of nearly $10,000 a year under the rules, the TLC has said.

Drivers groups also panned the legal challenges as an attack on working drivers by deep-pocketed corporations.

"The idea that this lawsuit is about anything other than avoiding paying drivers a fair wage is laughable," Jim Conigliaro Jr., the founder of the Independent Drivers Guild, a labor group for app-based drivers, said in a statement. "Lyft has had every opportunity to pay a livable wage and they refused to do so — and now that we won a legal mandate, they are still refusing to pay a fair wage."

Uber did not immediately comment on the lawsuits Wednesday.

(Lead image: A ride-hailing vehicle moves through traffic in Manhattan in July 2018. Photo by Spencer Platt/Getty Images)