New York City Enacts Nation’s First Minimum Compensation Regulation for Ride Hailing Apps

New York City’s ride-hailing minimum compensation regulation is the first in the nation

On December 4, 2018, the New York City Taxi and Limousine Commission (T&LC) announced new driver income and transparency rules for drivers of popular ride hailing apps Uber, Lyft, Via, and Gett/Juno. The new rules are anticipated by the T&LC to go into effect in mid-January 2019 and are the first in the nation to set a minimum compensation for drivers of these ride hailing apps. Previously, because drivers were considered independent contractors, they were not subject to any minimum compensation regulations but with these new rules, drivers will earn the equivalent of $27.86 per hour gross, or $17.22 per hour after expenses. The T&LC anticipates that 96% of the approximate 80,000 drivers for Uber, Lyft, Via, and Gett/Juno will receive almost $10,000 more per year.

In addition to setting a minimum rate of compensation, the new regulations also provide additional compensation for wheelchair accessible vehicles, shared ride drivers, and out of town return rates. Furthermore, the new rules impose transparency requirements on Uber, Lyft, Via, and Gett/Juno requiring that drivers receive detailed pay and deduction information, as well as lease information, specifying all costs and itemizing all deductions and charges.

The T&LC issued a formula for calculating driver’s pay rates that is detailed here. This formula takes into account a driver’s idle time, which previously went uncompensated, as well as a minimum rate per mile and per minute. The T&LC formula results in a rate of $17.22 per hour after expenses, a significant increase from the current pay rate of $11.90 per hour after expenses and above the New York City employee minimum wage of $15.00 per hour (effective 12/31/2018). This formula is the first of its kind in the nation and ensures that drivers earn a livable wage.

The new rules apply to the largest ride hailing app companies, defined as those operating under the same name and dispatching at least 10,000 trips per day. Currently, only Uber, Lyft, Via, and Gett/Juno are subject to the new rules.

The new pay rate formula and transparency requirements will be enforced by the T&LC as they will investigate and prosecute driver complaints and audit trip records. If you have questions about this process, your rights, or need assistance with stating your case please contact Borrelli & Associates for a consultation.