Would Rideshare Pay Rules in NY Impact Labor, Safety?

If all goes according to plan, for-hire vehicle drivers could be getting a nice bump in pay. The increases proposed by the NYC Taxi and Limousine Commission (NYCTLC) is part of several conclusions outlined in a study it released in early July.

The Commission and the City Council have been scrambling for several years since the ride-hailing app operators burst on the city’s taxicab landscape, shaking it to its very foundation. The problem is that the for-hire, ride-hailer business model has steeply undercut taxi and limousine service revenue models. Uber, Lyft, Via and Juno drivers have been paid several dollars less than their taxi driver counterparts, and they do not have to pay for expensive NYCTLC medallions.

This often makes ride-hailing trips less expensive, but most of those drivers still struggle to make a living wage. The study reveals that, in spite of the industry’s growth, pay for ride-hailing app drivers still lags behind that of taxi drivers. The NYCTLC appears about ready to arbitrarily establish a program to protect those drivers and in so doing raise all financial boats through a higher tide of future wages for those who drive.

According to the plan, if any for-hire driver’s earnings fall below $17.22 per hour in any week, the ride-hailing employers must make up the difference.  The study concludes that these companies could absorb this cost, in part, by lowering their artificially high commissions, which average between 10 and 25 percent of average passenger fares. The median net hourly earnings for Uber/Lyft drivers is a little over $14, according to the study.

It seems this solution may be pretty much of a done-deal. Although the NYCTLC has the power to arbitrarily adopt this new “equitable pay” rule without the Mayor’s or the City Council’s support, Mayor Bill de Blasio says he’d rather address driver pay through the City Council.

It comes as no surprise that the limo and taxi companies applaud the move. “This is an important step in addressing one of the many pressing challenges that face the for-hire and taxi industries today,” said the taxi commissioner, Meera Joshi. The measure also has the for-hire companies scrutinizing it carefully. Uber has major concerns. Alix Anfang, a company spokeswoman, said in a statement that the company is concerned that this new revenue model would “hurt riders through substantially increased prices and reduced service.”

But there’s another wrinkle to this news. If for-hire drivers are making more reasonable pay, might they feel less compelled to work arduously long shifts for weeks, with little time off?

There’s a reason the government is pressing over-the-road truckers and their employers to avoid drowsy driving, even to the point of mandating how long they can drive in a single shift and how much rest they must have before returning to the road. Ride-hailing and taxi drivers can fall into that same trap of overwork, especially if they’re making less than a reasonable living wage. Is it possible that part of the reason for the NYCTLC’s aggressive position is an attempt to lower the accident rates of taxi and for-hire vehicles?

If the NYCTLC equitable pay measure is adopted, the fiscal (and safety?) results should be interesting, especially in light of recent news that the City Council could cap the number of for-hire vehicles; they have cited increased congestion on city streets – most notably Manhattan.

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