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NYC mandates minimum wage for Uber, Lyft, other app-based rideshare drivers

Rideshare drivers in New York City may soon be covered by a new rule that guarantees they get paid a minimum wage equivalent of $17.22 per hour, Fast Company reports.

Uber, Lyft, Juno, Via, and other rideshare companies operating in New York City currently have more than 80,000 drivers. Drivers for Uber and Lyft, in particular, have been embroiled in controversies with taxi drivers, the city’s Taxi and Limousine Commission (TLC), and their own companies.

Previous issues between drivers and rideshare companies centered on expense reimbursement and the drivers’ employee versus independent contractor status. The TLC’s set of proposed rules address both issues.

The line between employee and contractor status is often blurred in the U.S., despite the Internal Revenue Service’s 20 Factor Test to determine the difference. In general, compensation and expense reimbursement are contractual items not covered by federal, state, or municipal employee laws.

The TLC‘s proposed rule results from efforts by the Independent Drivers Guild (IDG), a New York City nonprofit organization. The Guild has been working for two years on behalf of rideshare drivers to convince the TLC to change the compensation rules for rideshare companies and drivers. The first win in the IDG’s campaign was the TLC’s support for driver pay in line with the city’s $15 per hour minimum wage.

Pushback from drivers on the $15 hourly rate focused on driver expenses. Uber, Lyft, and other companies do not reimburse drivers for vehicle expenses including fuel and maintenance nor do they pay for mileage or time spent driving to passenger pick-up location or when drivers return from long trips after passenger drop off.

The TLC’s proposed $17.22 hourly minimum compensation plan adds $2.22 to the area’s $15 per hour minimum wage to account for driver expenses and unpaid travel associated with paid rides.

The TLC also proposed another rule that could benefit existing drivers and reduce traffic on city streets. A one-year moratorium on new licenses for all types of for-hire vehicle drivers would pause the addition of new drivers who respond to rideshare companies’ incessant recruiting efforts on New York City streets. When new drivers try the business, even if they quit after a short time, the extra cars add to congestion and diminish opportunities to give rides to established drivers.

Fast Company reported that Uber and Lyft both pushed back against the Taxi and Limousine Commission’s new rules. The companies argue that the proposed regulations would result in lower driver compensation and increased rider fares.

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