New York City gives rise to Uber and Lift drivers. On Tuesday, city budgets went to the nation's first minimum…
New York City gives rise to Uber and Lift drivers.
On Tuesday, city budgets went to the nation’s first minimum payroll for drivers working for riding applications and ending a contested two-year battle to ensure that drivers can earn a decent life.
Starting January, riding companies start paying drivers around $ 17.22 per hour (after spending) – about $ 5 per hour than the current average of $ 11.90 per hour, according to Independent Drivers Guild, representing about 70 000 Uber, Lift, Juno and Via-driver in the city. The new payroll rate is calculated per ride, but the guild expects it to give the full-time drivers an extra $ 9,600 a year.
The relocation is part of the city’s escalation at Uber and other app-based ridiculous services that have clogged the city with thousands of extra cars, while contributing to the poverty level of thousands of drivers.
As Uber and Lift drivers are considered independent entrepreneurs and not employed, they are not subject to the city’s minimum hourly pay, which reaches $ 1
5 per hour at the end of the month. The new rules are essentially about that slump and ensure that drivers earn at least the minimum wage, with a few extra dollars to cover payroll taxes and certain paid leave.
The change also represents the most aggressive effort to regulate Uber since Silicon Valley tech giant elevated urban transportation 2011. The battle in New York City is particularly important for Uber, as it represents the company’s largest market. In May, the city played 18 million app-based tours – more than six times as many during the same period three years ago.
Concerns about Uber’s business model and work culture have renewed focus on the technology company, and New York City can pave the way for other cities to provide much-needed monitoring of the company’s business practices.
Uber and Lyft both press against payment rules saying that it will make tours more expensive for customers and restrict corporate competition.
“[Taxi & Limousine Commission’s]” The implementation of the City Council to increase driver’s performance will lead to higher rider price increases while avoiding the ability to handle congestion in Manhattan’s central business district, “a Uber spokesman said in a statement to Vox, adding that The salary ratio does not take into account bonuses and other incentives paid to drivers.
Lift is worried that the rules will punish some companies but not others (they only apply to large app-based ridging services).
“Unfortunately, the proposed payment rules [Taxi & Limousine Commission’s] will undermine competition by allowing certain companies to pay drivers lower wages and prevent drivers from providing trips to and from areas outside of Manhattan,” says a company president in a statement to Vox.
New York City has been trying for years to regulate Uber and other ridiculous services.
In August, the city council approved several bills for the regulation of leased vehicles, which included a lure on the number of drivers who can drive for Uber and Lyft, and got the city’s Taxi and Limousine Commission to set the minimum wage (as they sat on Tuesday).
The rules also required the app-based companies to report details about each trip, including duration, cost, driver revenue, and company’s commission.
New York City legislators had tried – and failed – to pass similar laws by 2015, it would have regulated the expansion of riding companies. At that time, Uber was only four years old and the start was engaged in a tough global campaign to stop all local attempts to regulate their business and threatened to leave cities that did. It does not save any effort to throw mayor Bill de Blasio’s proposal.
But since then, the hauling industry has exploded, and the problems that have come with it are more difficult to ignore. New York City now plays a central role in the economic experiment of the gig economy. The number of people living as Uber and Lift drivers in the city is now six times greater than three years ago. Starting July 2018, more than 78,000 cars were connected to the four major search-seeking apps, a sharp increase from the 12,500 cars registered in January 2015.
To get a sense of how significant that change is, consider this data point from the New York Taxi and Limousine Commission, which governs professional drivers in the city: If Uber acknowledged its drivers as employees, unlike independent entrepreneurs, it would be the largest private employer in the city. In other words, Uber would be the largest private employer in the largest city in the world’s largest economy.
The explosion of driver-seeking apps has been good for startups investors – but for the actual drivers, not so much. In New York City, the unlimited growth of these companies has put serious economic strain on city taxi drivers, and it has made it difficult for Uber drivers to compete and earn decent accommodation.
This dynamism was recently floodlit with news that six professional drivers in the city committed suicide for a period of 12 months in 2017 and 2018, including three taxi drivers who struggled to stop meeting.
The rise of uber and other similar companies has also caused tensions to flow between city taxi drivers and newcomers behind the wheel. But both groups have come together to drive city legislators to force themselves in the riding companies by limiting the number of drivers in the city and creating a minimum wage sum.
“The City Council must send a clear message to these companies: If you want to work in our city, you must pay workers fairly,” says Ryan Price, CEO of the Independent Drivers Guild, in a statement earlier this year.
The new laws are at the heart of Uber’s business model, based on a huge fleet of vehicles to be available at any given time. This means that competition for rides is high and drivers have to work long hours.
The city created the minimum hourly wage after analysis of salary data and results for drivers working for the four largest app-based companies: Uber, Lift, Juno, and Via.
Economists at New School and University of California Berkeley published a report in July with some limited payroll data, and they came to some alarming conclusions. For one, they discovered that driving for search-seeking apps in New York City is not a part-time job for people who want to earn extra money.
More than half of its drivers travel with full-time passengers, and about half of all drivers support families with children on that income. Their income is so low that 40 percent of drivers qualify for Medicaid, and about 18 percent qualify for food stamps.
The low wage problem is largely related to how drivers are classified. Because they are independent entrepreneurs and not employed, Uber does not have to make sure they earn the minimum wage.
In New York City, the minimum wage is currently $ 13 per hour and reaches $ 15 per hour before the end of 2018. To correspond to $ 15 an hour, independent entrepreneurs in the city should earn about $ 17 a hour, taking into account to payroll and certain paid leave.
However, the New School report showed that median hourly pay for app-based drivers in New York is about $ 14 an hour. The authors recommended policies that would require rescue companies to ensure that drivers earn at least $ 17.22 in New York City.
“App companies could easily absorb an increase in driver cost with a minimal ticket adjustment and a little inconvenience to the passengers,” they wrote.
Uber and Lyft do not agree with it, but they seem to have no more choice.