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'This Is About Respect': NYC to Raise Minimum Pay for Uber and Lyft Drivers, But Pushback Is Expected The rideshare companies say state regulations will make services more expensive for customers and limit competition.

By Amanda Breen

entrepreneur daily

Nearly two years into the pandemic, one group of essential workers is finally about to receive a pay bump in New York City. Last week, Mayor Eric Adams announced a 5.3% raise for drivers of high-volume, for-hire vehicle services — including those who work for Uber and Lyft.

The order from the Taxi and Limousine Commission (TLC), which goes into effect on March 1 and impacts an estimated 90,000 drivers, will increase the minimum driver pay rates to $1.161 per mile and $0.529 per minute. New York became the first city in the country to implement a minimum pay rate for Uber and Lyft drivers in 2018; ride-hailing companies were required to begin paying drivers approximately $17.22 per hour after expenses — about $5 per hour more than they'd received previously.

In a statement posted to the the city's official website, Mayor Adams acknowledged that the city's drivers have put themselves at risk to provide an essential service during the pandemic and deserve to be compensated accordingly. "Drivers have served on the frontlines and have been there for their neighbors — driving them around the city and delivering food to those in need. This is about respect and paying each one of these individuals a fair and decent wage."

Related: How Entrepreneurs Have Honored Pandemic Heroes and How You Can Too

Over the past several years, New York City ride-hail drivers have fought for the right to unionize, which would enable them to bargain for improved pay and workplace benefits. But despite numerous protests, a union has yet to be realized. Bhairavi Desai, executive director of the New York Taxi Workers Alliance, a group that represents ride-hail and taxi drivers in the city, noted that state regulations surrounding ride-hail services disproportionately effect some of the city's most vulnerable populations.

"[Uber, Lyft, and Via drivers] are the anchor in many neighborhoods and are majority immigrants of color working to transition out of poverty," Desai said in a statement. "We all know the price of basic needs, like bread and milk, have gone up, and, for drivers, so have operating costs, like fuel and repairs. This 5.3% raise will help thousands of families find security and give many the chance to live under better conditions."

But both Uber and Lyft have a history of pushing back on pay regulations, Vox reports, saying they make rides more expensive for customers and limit business competition. Currently, both companies are also fighting to maintain their drivers' classification as "independent contractors" in Massachusetts and California. Independent contractors aren't legally entitled to minimum wage, overtime and other benefits. Additionally, both companies are appealing a judge's ruling that a California ballot measure classifying ride-hailing drivers as contractors was unconstitutional.

Related: Uber, Lyft Ride Prices Up 40% on Driver Shortage

Amanda Breen

Entrepreneur Staff

Senior Features Writer

Amanda Breen is a senior features writer at Entrepreneur.com. She is a graduate of Barnard College and received an MFA in writing at Columbia University, where she was a news fellow for the School of the Arts.

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