Uber sent a petition to New York City’s Taxi & Limousine Commission (TLC) on November 4, requesting cuts to the minimum amount their drivers are required to be paid, according to TLC rules. The company asked that the per-mile rate in its driver pay formula be reduced by 6.1% to $1.277 from the current $1.360, according to a letter first reported on by Bloomberg News. Uber cited recent drops in the prices of used cars and gasoline and the company’s senior counsel Nicholas Davoli wrote in the letter that the reduction would ensure “prices no longer outpace inflation, and riders can continue to afford trips.”
CEO Dara Khosrowshahi said during Uber’s third-quarter earnings call in October that the company’s core U.S. rideshare business had suffered after it passed along the cost of high insurance policies to riders. The proposed driver pay cuts would reduce the fare for an average trip by 42 cents, the company said.
The petition comes on the heels of controversial “lockouts” that kept drivers from receiving jobs this past summer and as the TLC is set to make its annual inflation-related adjustments in March. Uber is requesting a ceiling of 3%, or the average rate reflected by the Consumer Price Index, whichever is lower, according to the letter. A recent Bloomberg investigation found that the company and its rival, Lyft, were locking New York City drivers out of their apps to avoid paying nearly $30 million in wages.
“We’ve received a wide range of suggestions and considerations from multiple stakeholders regarding minimum pay amendments,” said TLC Commissioner David Do. “We are seeking to introduce a fair rule package that will use the full extent of TLC’s authority to close existing loopholes that the rideshare companies have been using to lock out hardworking drivers and pay them less.”
Drivers reported being locked out of the apps for minutes or hours at a time, claiming it was an attempt to make Uber and Lyft drivers seem busier on paper – and convince the TLC not to raise a key portion of its minimum wage formula during its annual review. The frequent and unannounced lockouts left drivers struggling to support their families and working extra hours to make ends meet.
The New York Taxi Workers Alliance – which has the backing of NYC Comptroller and mayoral candidate Brad Lander – asked the TLC to consider the lockouts when recalculating the pay formula. They claim the lockouts erased some of the drivers’ work – time spent searching for rides between passengers – from Uber and Lyft records.
“We have been working day and night on a rules package designed to end future lockouts and strengthen minimum pay protections, with input from advocates and elected officials,” Mr. Do stated in his column this month. “As many of you know, each year we study driver expenses and make our decisions based on an independent assessment. We will see what that study finds.”
Source: New York Post
