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Home / Business / The days of cheap Uber rides are over with the new law on wages and salaries for drivers in New York

The days of cheap Uber rides are over with the new law on wages and salaries for drivers in New York



As of today, drivers for certain hunt nail apps in New York City will see a significant wage boost, while drivers for other apps will not. In many cases, they are the same drivers, as New York City drivers are usually moonlighted for multiple apps. If that sounds like a hot mess, it's because it's so.

This confusion is the result of an eleven out of two companies, Lyft and Juno, to stop the introduction of a new law requiring higher wages for drivers. According to the law passed by the city in December 2018, which is due to enter into force today, hail companies have to pay the driver at least $ 1

7.22 per hour at cost. The charging formula uses a so-called utilization rate, which is the proportion of time a driver spends with the passengers in his vehicle compared to the time he has spent idling and waiting for a fare.

On Wednesday, Lyft and Juno filed separate lawsuits arguing that the new law would put them at a competitive disadvantage for Uber. The usage formula is unfair, they argue, because Uber has more users and drivers can do more. The law will ultimately not increase driver wages because it will cut customer demand.

Both companies requested the judge to block the implementation of the law, but the judge initially rejected the request. Instead, New York State Supreme Court judge Andrea Masley offered hailers a chance to put the driver's revenue on a trust account. Lyft and Juno did not accept, Uber and Via did not. (Unlike some press reports, Lyft has not made an agreement with the city's taxi and limousine commission.) However, this may change as Lyft and Juno are expected to meet with the judge on Friday.

Nevertheless, Uber uses the lawsuit as an opportunity to present himself as a lawyer for pay equity. "We do not intend to withhold part of the driver's win," a Uber spokesman said in a statement. A spokesman from Via agreed, "We firmly believe that adherence to corporate usage standards is an important step towards reducing congestion leading to single travelers, and we support TLC in this endeavor."

Uber is not afraid of fact that the new law will result in higher fares for drivers. The company released two blog entries last night – one for drivers, one for drivers – in which the company implies that the days of cheap over-travel are over. For travel that begins in New York City and ends somewhere outside of the five districts, an additional fee will be charged to reimburse drivers for the return trip to the city.

The calculation method for the new driver fares essentially includes a "roaming charge", in which drivers pay higher prices to compensate drivers for their time on the road without a passenger. We believe that simple changes to the way the TLC applies the rule could lower driver prices without affecting the minimum pay of at least $ 27.86 an hour.

Uber said it will likely reduce or eliminate some of the financial incentives such as time-limited bonuses and promotions that lured drivers to their app. The company also increases the cancellation fee if a driver does not show up, changing the cancellation window from five minutes to 15 minutes.

What happens if Uber complies with the new wage law and Lyft withholds some reservations about this wage? The taxi and limousine commission had no official comment on Friday. It is expected that representatives of Lyft will meet again with Justice Masley to further discuss the fiduciary business. In the end, Lyft may pay drivers a fraction of the higher pay, if not all. The damage can already be done.

"Lyft drivers are so heavily underpaid that just enforcing the minimum wage would increase the driver's revenue by nearly $ 10,000 a year," said an Independent Drivers Guild spokesman. "Be ashamed of Lyft and Juno for extending the suffering for their drivers – thousands of hard-working New Yorkers – and their families."

The fight for the new wage bill could cost Lyft his image as a "nice guy". The company, which used to be associated with the blurry pink mustaches, has been diligently working to build a reputation as the "bright" alternative to the larger and more unsympathetic Uber. Motorists responded with confidence to this effort: According to a 2017 poll, 75.8 percent of Lyft drivers agreed that they were satisfied with their experience for Lyft, while only 49.4 percent of Uber drivers said the same thing ,

Both Uber and Lyft are expected to go public this year, so cost control is certainly of great importance. To be sure, New York is just one of many markets where both Uber and Lyft operate. It's also the largest in the US, and other cities are watching closely as the pay battle unfolds. This could only be the tip of the iceberg.


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