Uber Files Lawsuit to Stop NYC Driver Pay Hike

Uber has sued New York City’s Taxi and Limousine Commission’s (TLC) decision last month to increase the pay rates of Uber drivers, and called the planned rate hikes “dramatic, unprecedented, and unsupported(Opens in a new window).” 

The new rates, which were expected to be implemented on Dec. 19, were approved on Nov. 15 and represented the first increase in metered fares since 2012. If successfully implemented, drivers’ per-minute rates would go up by 7.18% and their per-mile rates would increase by 16.11%. 

According to Bloomberg, Uber said it would be made to spend an extra $21 million to $23 million a month if the rule goes into effect, and as Engadget reports(Opens in a new window), the company has said they would pass the costs onto riders.

In its suit, Uber said: “Such a significant fare hike, right before the holidays, would irreparably damage Uber’s reputation, impair goodwill, and risk permanent loss of business and customers.” 

And in a statement reported by Bloomberg, an Uber spokesperson said that the TLC was “choosing to invent a new methodology that locks in this summer’s high gas prices in perpetuity with a ‘mid-year’ adjustment that takes place 12 days before the end of the year.” 

In the same statement, the company slammed the TLC for switching to a “volatile inflation index for a one-time increase that makes no sense, and that is a drastic departure from the Commission’s past practice or any rational approach.”

Responding to the lawsuit, David Do, the Taxi & Limousine Commissioner, said that New York City must “stand behind our workers without traditional employment protections.” He added that the commission was “confident” that it was “within legal authority” in implementing the rate rise and that the TLC would “vigorously” fight the lawsuit filed by Uber.

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Meanwhile, taxi unions expressed their support for the TLC amid the pending lawsuit. Bhairavi Desai, executive director of the New York Taxi Workers Alliance called on New York City to stand “firm and defend the rights of drivers to labor with dignity.” He added that Uber was charging 37% more in fares since 2019 which is going to the company’s coffers and not to its drivers. 

The lawsuit comes as Uber has teamed up with autonomous vehicle maker Motional to bring driver-free taxis to the streets of Las Vegas. The move marks the first time UberX or Comfort Electric customers can hail a driver-free ride using Motional’s fully electric Hyundai Ioniq 5-based cabs.