NYC Plan to Boost Pay for Uber, Lyft Drivers Seen Falling Short

(Bloomberg) -- A New York City proposal intended to protect drivers of app-based for-hire vehicle companies such as Uber Technologies Inc. and Lyft Inc. by guaranteeing minimum pay was criticized by some drivers who say it fails to do enough to deal with the competition that’s battering the industry.

The minimum pay rules, endorsed in a study prepared by New School University’s Center for New York City Affairs, would require companies to pay at least $17.22 an hour through fare increases and reduced company commissions.

The study’s release came as the New York City Council has been considering a package of laws to deal with increasing gridlock on Manhattan streets and economic desperation among drivers throughout the for-hire vehicle industry, as Uber and other ride-share companies have increased their app-based cars to more than 80,000 from 12,600 since 2014. The sense of crisis has been deepened by the suicide deaths of six cabbies since November.

Yet drivers found fault with the proposal. The Taxi Workers Alliance, which represents drivers of Yellow Cabs, liveries and app-based vehicles, said it shouldn’t have focused only on app-based fleets without developing an industry-wide solution. The proposed regulations would limit incomes of all drivers without addressing problems created by excessive competition, the group said.

“The only way forward is to look at the industry holistically and implement one set of policy solutions that will help drivers in every sector,” said Taxi Workers Alliance Executive Director Bhairavi Desai, who called upon the city council to reject the recommendations. “The simplest and most effective way to protect drivers would be to regulate the rate of fare, require drivers receive a percentage of it, cap driver vehicle and commission expenses, and cap the number of vehicles.”

Another group, the Independent Drivers Guild, which claims to represent about 65,000 app-based drivers in New York City, said it supported the proposal with reservations while it continues to analyze it. The group has called for a moratorium on issuing new taxi and for-hire drivers’ licenses as well as a 40 percent pay raise.

"The new study confirms what we’ve been saying for some time -- that drivers are in fact struggling and it’s time to act,” said Jim Conigliaro Jr., a founder of the group, which is affiliated with the Machinists Union. “Without a doubt establishing minimum pay rules that raise driver pay is the single most important step the city can take to help these struggling working families.”

The report was accepted with praise by Taxi and Limousine Commissioner Meera Joshi, who said it provided “an excellent foundation for public policy.” She called the study “an important step in addressing one of the many pressing challenges that face the for hire and taxi industries today.”

To contact the reporter on this story: Henry Goldman in New York at hgoldman@bloomberg.net

To contact the editors responsible for this story: Stephen Merelman at smerelman@bloomberg.net, William Selway, Michael B. Marois

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