NYC Passes Minimum Wage for Uber and Lyft Drivers: Should Your State?

This week, New York City passed a minimum wage requirement for drivers who work for ride-hailing apps such as Uber and Lyft.

Starting in the new year, ride-hailing companies will have to pay drivers around $17.22 per hour (after expenses) — about $5 more per hour than the current average of $11.90 per hour.

Background

In New York City, more than 80,000 people earn their living by driving for app-based companies like Uber, Lyft, Juno, and Via. In the past several years, these companies, which control around 75 percent of the ride-hailing marketplace, have both benefited from and driven a boom in demand for rides, fueled by subway system failings and the booming availability of car service.

The drivers’ earnings have not kept pace: In fact, they’ve declined. This is partly because they’re not legally full-time employees; rather, they’re independent contractors, and thus aren’t covered by existing minimum wage laws.

More than half of New York City drivers are on a full-time basis, and about half of all drivers are supporting families with children on that income, according to recent research. Their earnings are so low that 40 percent of drivers qualify for Medicaid, and about 18 percent qualify for food stamps.

Reactions

The companies aren’t thrilled about this.

An Uber spokesperson sent the following statement to Vox, adding that the pay rate doesn’t take into account bonuses and other incentives paid to drivers:

“The [Taxi & Limousine Commission’s] implementation of the City Council’s legislation to increase driver earnings will lead to higher than necessary fare increases for riders while missing an opportunity to deal with congestion in Manhattan’s central business district.”

What do you think?

Should your state pass a similar minimum wage requirement? Why or why not? Tell your reps what you think, then share your thoughts below.

—Sara E. Murphy

(Photo Credit: iStock.com / lovro77)