NYC considering new pay-rate rules for Uber’s drivers

EMMA G. FITZSIMMONS AND NOAM SCHEIBER

NEW YORK — New York City’s taxi commission is considering new pay rules for drivers for Uber and other ridehailing apps — a move that would make it the first major U.S. city to regulate driver pay rates amid growing complaints about drivers’ low wages.

The initial proposal, which will be outlined in a study to be released Monday, would establish a minimum rate for drivers of $17.22 an hour after expenses. The policy would increase driver earnings by about 22.5 percent on average, or $6,345 per year, for those who would get increases under the proposal, according to the study by two independent economists.

The rules seek to address a problem at the heart of Uber’s business model: New Yorkers have quick access to cheap rides in nice vehicles. Uber takes a steep commission. But many of its drivers are working long hours and struggling to make a decent living.

“Their low pay has persisted despite the rapid growth of the industry, the major benefits it has provided to consumers, and the high returns it has generated for the companies and their external investors,” the study said.

The study is a rare glimpse inside New York City’s booming ride-hail industry. It found that most drivers work full time and that 85 percent of drivers currently make less than the proposed pay standard. The median net hourly earnings in the industry were about $14.25. The proposal aims to bring their pay in line with the $15 minimum wage the state is moving toward.

About 40 percent of drivers have incomes so low that they qualify for Medicaid, according to the study. About 18 percent qualify for food stamps. Some drivers bought vehicles, enticed by claims that they could make as much as $5,000 during their first month of driving, and now feel trapped.

The new pay rules come as New York City is considering a series of regulations for Uber, including a cap on vehicles.

“We look forward to reviewing the report,” said Alix Anfang, a spokesman for Uber. “Uber believes that all full-time drivers in NYC — taxi, limousine and Uber alike — should make a living wage after deducting reasonable expenses.”

The city’s taxi commissioner, Meera Joshi, has said the commission would set new pay rules based on the study’s findings.

Under the rules the taxi commission is weighing, if a driver’s earnings fall below $17.22 per hour over the course of a week, after subtracting an expense allowance, the apps will be required to make up the difference. The study suggested the apps could absorb this cost partly by lowering their commissions, which range from about 10-25 percent of passenger fares on average, depending on the company.