Uber and Lyft are being forced to pay their New York City drivers a livable wage

Uber and Lyft are being forced to pay their New York City drivers a livable wage

Unionized Uber and Lyft drivers in New York City just won a huge victory in the form of more-livable wages, but the ride-sharing companies are warning that it will probably drive up fares.

Uber and Lyft, both multibillion-dollar companies, released distressed statements shortly after New York’s Taxi and Limousine Commission voted to increase the wages for app-based drivers after a two-year labor union campaign. Uber said the move will "lead to higher-than-necessary fare increases for riders," and Lyft said “the rules would be a step backward for New Yorkers.”

The commission voted this week to enact a new minimum pay standard for ride-sharing app drivers, meaning drivers will get an hourly-rate boost to about $17 (after expenses) from their current rate of $11.90. Drivers are also getting “out of town rate” and “shared ride” bonuses. Altogether, drivers should see an average annual salary bump of $9,600, according to the proposal to increase wages. The average Uber driver — currently makes about $48,000 per year, according to Glassdoor.

New York — home to some 80,000 Uber, Lyft, Juno, and Via drivers — is the first city to put these kinds of regulations on Uber and Lyft. The driver-pay rule goes into effect in the new year.

The move comes amid a jump in cabbie suicides that many be linked to the rise in ride-sharing popularity — the ride-sharing companies have disrupted the city’s taxi industry in the last several years and saturated the market with drivers. This year, at least eight cab industry workers have committed suicide. Cabbies, many of them immigrants, often pooled a ton of money into getting an official taxi medallion that gave them exclusive rights to pick up people who hail cabs on the street. Medallions, at their peak, were worth more than $1 million. Today, they’re worth about $200,000, leaving many drivers in financial ruin after being forced to compete with Uber and Lyft.

The New York City Taxi Worker Alliance, the labor union representing many New York cab drivers, applauded the commission’s decision, which could drastically improve the living conditions for full-time drivers. A 2018 city-commissioned study said that 40 percent of ride-sharing drivers are on Medicaid, and about one-fifth of them are on food stamps.