New York approves minimum wage rules for Uber and Lyft drivers

5 Dec 2018

New York City traffic. Image: © deberarr/

A new minimum wage for ride-sharing drivers has been established in New York, the first of its kind in the US.

The New York City Taxi and Limousine Commission (TLC) voted on Tuesday (4 December) to set a minimum pay rate for people who work for ride-sharing firms such as Lyft, Uber and Juno. The new rule will go into effect in 20 days and will see drivers earn at least $17.22 per hour after expenses.

This increase brings the pay rate in line with New York City’s existing $15-per-hour minimum wage for typical employees. The extra $2.22 takes payroll taxes of contract drivers and paid time off into account. The rate gets calculated on a per-trip basis, and involves a ‘utilisation’ factor, which measures how many times per hour a driver has a passenger. The commission said this is to reduce the number of idle drivers on the road, ostensibly reducing congestion in the busy city. 

Founder of the Independent Drivers Guild, Jim Conigliaro Jr, said: “Today we brought desperately needed relief to 80,000 working families. All workers deserve the protection of a fair, liveable wage and we are proud to be setting the new bar for contractor workers’ rights in America.” He extended his thanks to the mayor, the TLC and other city officials “who listened to and stood up for drivers”. 

A long process

In August of this year, mayor Bill de Blasio signed a bill requiring the TLC to set a base pay rate for app-based ride-share drivers. The Independent Drivers Guild had been working for some time to secure a base rate that drivers could earn a steady living on. That same month, the city also voted to freeze new ride-sharing vehicle licences for a year. The number is still fixed at around 80,000 vehicles and applies to cars as opposed to individual drivers. 

The New York Taxi Workers Alliance applauded the decision, saying: “It’s the first real attempt anywhere to stop app driver pay cuts, which is an Uber and Lyft business practice at the heart of poverty wages.”

The companies themselves have their own concerns about the ruling. Uber warned that the change would lead to fare increases for users. A spokesperson for the company added that it “supports efforts to ensure that full-time drivers in NYC – whether driving with taxi, limo or Uber – are able to make a living wage, without harming outer borough riders who have been ignored by yellow taxis and underserved by mass transit”. Meanwhile, Lyft described the move as “a step backward for New Yorkers”.

Ellen Tannam was a journalist with Silicon Republic, covering all manner of business and tech subjects