Uber and Lyft drivers in New York will have to wait for another time to implement increases in ride-hailing rates, as a court has blocked their earlier attempt.
The ruling came following a suit by Uber in December, challenging the city’s Taxi & Limousine Commission (TLC)’s decision to hike ride rates. Uber claimed the Commission used a flawed methodology to determine the per-minute and per-mile rate increases.
In his ruling, Manhattan state court Justice Arthur Engoron, who according to Bloomberg was a taxi driver in his college days, agreed with Uber.
Tekedia Mini-MBA edition 14 (June 3 – Sept 2, 2024) begins registrations; get massive discounts with early registration here.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
“It’s just not enough to say there’s inflation and 100 drivers said gas prices shot up,” he said.
Uber and Lyft drivers across the US have for long clamored for better pay and improved welfare, with the drivers going to court seeking to be declassified as independent contractors in some states like California.
In November, the TLC unanimously approved the city’s first metered fare increases in a decade, including for ridesharing trips, per Engadget. The new meter increased per-minute rates by 7.4 percent and per-mile rates by 24 percent.
This means, under the new metered fares, a 30 minutes trip that covers 7.5 miles would have earned a ridesharing driver at least $27.15, an increase of more than $2.50 compared with current rates, according to Engadget.
Uber filed a suit seeking to stop the Commission from implementing the rate hikes before its due date of December 19th. In its argument, the ride-hailing giant said the increases would result in higher ride rates for its customers, which will harm the company’s reputation. A judge temporarily restrained the hikes from going into effect.
“Drivers do critical work and deserve to be paid fairly, but rates should be calculated in a way that is transparent, consistent and predictable. Existing TLC rules continue to provide for an annual review tied to the rate of inflation, which will take place in March,” Uber spokesperson Josh Gold told Bloomberg.
Uber said, according to Engadget, that implementing the pay raise would cost it between $21 million and $23 million per month, a huge financial responsibility for the ride-hailing giant that has been dealing with quarterly revenue losses. Uber reported a net loss of $1.2 billion for the third quarter 2022.
Bhairavi Desai, executive director of The New York Taxi Workers Alliance, told Engadget in a statement that the drivers will not rest until the raise is implemented.
“We call on the Taxi and Limousine Commission to immediately redo the rules so drivers do not have to wait one day longer for their raise. A few missing words in a Statement of Basis and Purpose does not justify denying a raise meant to help thousands of drivers pay their rent and put food on the table for their families
“Shame on Uber for spending millions on this heartless lawsuit only to deny drivers an increase of $1.66 more on an average trip. Uber woke a sleeping giant. This raise belongs to the drivers and we will not rest until it’s back in our hands,” he said.