The city’s Taxi & Limousine Commission (TLC) proposed a rule on January 27, seeking to increase wages for Uber and Lyft drivers by about 9% from current rates, after a New York judge struck down a similar planned raise. The TLC detailed the revised raise in a 13-page notice and scheduled a public hearing for the plan on March 1. A vote on the proposal is expected later in the month.
The move comes after Justice Arthur Engoron of Manhattan Supreme Court decided the TLC had not sufficiently explained the reasoning behind the wage increase, although he added that he supports a raise for drivers… just one with more and better details.
Uber sued the city in December to block the wage increase, scheduled to take effect Dec. 19.
TLC chairman, David Do, said the new version of the rule offered “significantly more detailed explanations of our calculations than our previous submission. We sincerely hope that there will be no further attempts to thwart this much needed pay adjustment.”
The commission’s notice for the new rates includes step-by-step calculations, based on inflation data.
Independent of the new plan, Uber and Lyft recently implemented a 6% increase in driver wages, thanks to an annual city-ordered adjustment.
Study: Uber, Lyft Took Bigger Commissions From Drivers in Recent Years
As the lawsuit continues, a report conducted by the University of California, Los Angeles’ Labor Center seemed to indicate that Uber and Lyft took a larger share of passenger fares in 2022 than in 2019, when New York City initiated minimum pay standards for drivers working for high-volume for-hire vehicle (HVHFV) bases. The report analyzed 50 million city rides.
The UCLA study, which was shared with Crain’s New York Business, shows that HVFHV companies steadily grew their share of commissions after the new standards took effect. In February 2019, the month the TLC first implemented pay standards, Uber and Lyft took about 9% of the base passenger fare, according to the report. This percentage increased over time – spiking in April 2020 during the height of the pandemic to 21.4% – and more recently in April 2022 landing at a 20.7% cut overall, according to the report.
Passenger fares during the same three-year period outpaced driver pay overall. From February 2019 to April 2022, the study found, the median passenger fare increased 50% while the average HVFHV drivers’ pay rose by 31%.
Uber argued that the study cherry-picked data, leading to skewed findings. The company said February and March 2019 were outlier months – the first months of the new driver earnings rule, as well as a congestion surcharge fee. The company also said its take rate in April 2022 was 16.4%, not the 20.7% cited in the study.
Lyft pointed to recent pay raises rideshare drivers have received, including a 6% wage increase in Feb. as part of a city-mandated annual adjustment for inflation.
To better understand driver pay and passenger fares, the UCLA study analyzed publicly available data from the TLC. Researchers analyzed roughly 50 million rides, focused on HVFHV trips in February 2019, October 2019, April 2020 and April 2022. The data included only non-wheelchair accessible vehicles and trips that began and ended in the city. Researchers acknowledged certain limitations of the data and the report’s analysis, but recommended placing a cap on the amount companies take from a given fare. Lyft argued that such commission caps would “only serve to dramatically increase rider prices and depress demand, disproportionately hitting lower-income communities and leading to fewer rides that ultimately undercut driver earnings overall.”
Sources: Daily News, Crain’s New York Business