Pay Floor For NYC Uber Drivers Doesn't Go Far Enough: Advocates

NEW YORK — New York City's taxi regulators have unveiled a first-in-the-nation proposal that would set minimum pay for Uber and Lyft drivers — but drivers groups say it doesn't go far enough.

The Taxi and Limousine Commission held a public hearing Wednesday on proposed rules that would make sure drivers for the city's four largest app-based ride-hailing services — Uber, Lyft, Via and Juno — earn at least $25.76 per hour, or $17.22 an hour after expenses. That's the equivalent of a $15 hourly wage for independent contractors, which the drivers are generally considered.

The rules are meant to be a balm for the thousands of drivers in the city's booming app-based industry, about 85 percent of whom currently make less than the proposed minimum pay, according to a July TLC-commissioned report that recommended the measure.

But advocates say the city has vastly underestimated how much many drivers have to spend to lease the cars they use. A survey by the Independent Drivers Guild found the average leasing cost is more than $1,800 a month, nearly three times the report's estimate of $635. The group estimates 40 percent of drivers lease or rent their vehicles, while the city's formula assumed just 20 percent do, the guild says.

"We are pleased that New York is listening to drivers who have long suffered with earnings that fall below minimum wage, but it’s critical that the city get this right," Ryan Price, the guild's executive director, said in a statement. "While the city’s proposal has many strong points, the current version underestimates drivers’ costs."

The TLC's proposed rules would create a formula to determine the minimum per-trip take-home pay for drivers using the four major ride-hailing apps. That formula would incorporate a "utilization rate" that would factor in how much time each dispatch base's drivers spend actually carrying passengers.

The rules also include a "bonus" for shared rides and even higher pay for drivers with wheelchair-accesible vehicles that come with higher expenses.

The policy would both serve as a boon for drivers — 40 percent of whom are covered by Medicaid and up to 65 percent of whom work full time — and encourage the companies to increase the amount of time drivers have passengers in their cars, according to the economists who authored the July report.

"The proposed pay standard provides an innovative approach to increase driver earnings," James Parrott and Michael Reich said in testimony to the TLC. "It helps reduce congestion without causing a perceptible increase in passenger wait times."

But the proposal would still leave app-based drivers earning less than other professional drivers with specialized licenses, the Independent Drivers Guild says. MTA bus drivers, for example, earn a minimum of $23.85 an hour in addition to various benefits, according to the guild.

The costs of benefits generally provided to employees, such as health insurance, are also shifted to drivers because they're independent contractors, something the TLC's formula did not take into account, the guild says.

"Working families like mine are desperate for a raise and quick passage of these rules, but the city can’t call this a livable wage if the numbers do not reflect reality," Tina Raveneau, a guild member who drives for apps like Uber and Lyft, said in a statement. "We are urging the city to correct their cost estimates and then pass these rules without further delay."

The guild wasn't alone in questioning the TLC's proposal. The New York Taxi Workers Alliance — a vocal proponent of tighter rules for ride-hailing apps — similarly said the TLC-commissioned report underestimated driver expenses by as much as $10,000 a year.

The alliance said a driver paying $390 a week for a vehicle would actually earn net pay of just $11.08 an hour under the TLC's proposal assuming they work a 40-hour schedule for 50 weeks a year.

The TLC will "fully analyze" testimony from Wednesday and "pay great attention to any information those testifying shared with us," commission spokesman Allan Fromberg said in an email.

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