New minimum pay rule for ride-hail drivers gets messy rollout

The view from the back seat of a Lyft going from Brooklyn to Manhattan.
The view from the back seat of a Lyft going from Brooklyn to Manhattan.
Shutterstock
The view from the back seat of a Lyft going from Brooklyn to Manhattan.

New minimum pay rule for ride-hail drivers gets messy rollout

Beyond the extra hassle of litigation, it has created an image problem for Lyft and Juno.
February 4, 2019

When New York passed the nation’s first minimum pay rate for drivers of ride-hailing apps last December, it was seen by some as a win for those working in the often unpredictable gig economy, boosting drivers’ rates by about $5 an hour. Just before the new rule was set to go into effect late last week, Lyft and Juno sued to block it, arguing that the formula used to determine the minimum pay standards unfairly benefits companies that have more users. In this case, that’s Uber, the app that holds the biggest chunk of New York City’s ride-hailing market.

A judge ruled not to block the new law entirely, but it did offer Juno, Lyft, and Uber the option to put drivers’ new additional pay in escrow until the suits are resolved. Uber declined, saying that it would begin paying the higher wage, while Lyft said that it would pay the minimum wage, but calculated on a weekly basis – instead of using the Taxi and Limousine Commission’s formula – and would put the difference between those two figures into escrow, according to CityLab.

Beyond the extra hassle of litigation, the messy rollout of the higher wages has created an image problem for Lyft and Juno. Both companies have been marketed as driver-friendly alternatives to Uber; Lyft has made it clear that it’s not against minimum pay for drivers, but objects to how the current formula arrives at that figure. But by suing to halt the first minimum pay law on the books for ride-hail drivers, Lyft and Juno have ensured that there will still be some PR cleanup to do when this fight is resolved.

For the rest of today's tech news, head over to First Read Tech.

Annie McDonough
is a tech and policy reporter at City & State.
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