Thousands of Lift and Juno drivers in New York can not get the raise they were waiting for. At least, not immediately.
The two car sharing companies temporarily blocked the law in New York, which would require them to pay drivers an average of five dollars more per hour per hour, arguing that it is unjustly used by their biggest competitor: Uber.
In December, New York adopted the first minimum payout rate for riders driving for driving applications, ending with a controversial two-year battle to ensure drivers can earn a decent living. Driving companies were about to start paying drivers around $ 17.22 an hour (at a cost) – about $ 5 more per hour than the current average of $ 11.90 per hour, according to Independent Guild Guides. The new rate of pay is calculated after driving, but the Guarantor expects to give full-time drivers an additional $ 9,600 a year.
However, Lyft and Juno filed a lawsuit Wednesday at the state court – two days before the payout was raised – arguing that the payroll form was unfair, and would cost Uber less money, as it has more users and can keep drivers larger . The minimum payment rate is calculated based on the length and distance of each ride. (Uber is not involved in the lawsuit.)
The way the law calculates the driver's hourly salary, they argue, advocates applications that have more users, namely Uber, and can therefore keep drivers larger. Instead of blocking the law completely until the dispute is resolved, the judge said companies could increase salaries for a savings account, according to The Wing. The money will sit in a bank account until the lawsuits are solved. That means drivers will not receive a paid amount from Lyft and Juno, unless both companies decide to comply with the law in the meantime.
The move is part of the city's harsh measures for Uber and other driving services that clog up the city with thousands of extra cars while at the same time contributing to wages at a poverty level for thousands of drivers.
Because Uber and Lift drivers are considered independent contractors, not employees, they are not subject to a minimum hourly wage in the city, which will reach $ 15 per hour at the end of the month. The new rules guarantee that drivers earn at least the minimum wage, with a few extra dollars to cover payroll taxes and some paid hours.
The change also represents the most aggressive effort to regulate Uber, as the tech giant in Silicon Valley has overtaken urban transport in 2011. The battle in New York is particularly important for Uber, since it is the largest market in the company. In May, the city recorded 18 million ports – more than six times more in the same time period three years ago.
"Uber" and "LIFT" are pushing back against rising salaries, saying it would hurt competition and discourage drivers from taking Menchenton cyclists. But the bill passed with tremendous support from the City Council and Mayor Bill de Blasio, who does not seem satisfied with the last-minute lawsuit.
Unknown. Most drivers of these companies earn less than the minimum wage. We will not stop for it in New York, and we will fight every step of the way to get the workers to pay the salary they deserve.https: //t.co/lwjma86aTj
– Mayor Bill de Blasio (@NYCMayor) January 30, 2019
From the time of publication, the four driving companies affected by the new law did not respond to the Vox comment request.
New York plays a central role in Uber's economic experiment
New York has been trying for years to regulate desires and other driving services.
In August, the City Council approved several laws to regulate vehicles for engagement, which included limiting the number of drivers that could drive for Uber and Lyft, and allowed the Taxi and Limousine Commission to establish minimum rates of pay.
The bills also require company-based apps to report details of each trip, including duration, costs, driver revenue, and company fees.
New York lawmakers have tried – and failed – to adopt similar laws in 2015, which would regulate the expansion of driving companies. At that time, Uber was only four years old, and the launch was engaged in a fierce global campaign to stop every local attempt to regulate his business, threatening to leave the cities that did so. He did not spare any effort to annul the proposals of Mayor Bill de Blasio.
But since then, the driving industry has exploded, and the problems that come with it are more difficult to ignore. New York now plays a central role in the economic experiment of the economy. The number of people earning as Uber and Lift drivers in the city is now six times higher than it was three years ago. As of July 2018, more than 78,000 cars were linked to the four major driving applications, a huge increase of 12,500 cars registered in January 2015.
To get a sense of how important this change is, consider these data from the New York Taxi Commission and Limousine, which regulates professional drivers in the city: If Uber recognizes his drivers as employees, versus independent contractors, it would be the largest a private employer in the city.
In other words, "Uber" will be the largest private employer in the largest city of the largest economy in the world.
Many drivers for a vehicle application do less than the minimum wage
The blast of driving apps is great for startup investors, "but it's not that great for the right drivers.
In New York, the unlimited growth of these companies caused serious financial effort for taxi drivers in the city and made it difficult for drivers to compete and earn a decent living.
This momentum was at the center of attention recently with the news that six professional drivers in the city died of suicide for a period of 12 months in 2017 and 2018, including the three taxi drivers who fought to make ends meet.
The rise of Uber and other similar companies also caused tensions between city taxi drivers and newcomers behind the wheel. But the two groups have joined together to help lawmakers in the city to curb driving driving, limiting the number of drivers in the city and creating a minimum payout rate.
"The city council must send a clear message to these companies: if you want to work in our city, you have to pay the workers fairly," says Ryan Ceza, executive director of Independent Guild Drivers, in a statement last year.
The new laws strike at the core of Uber's business model, which relies on a huge number of drivers that will be available at a given time. This means that the driving competition is high and drivers must work long hours.
The city created the minimum hourly rate rate after analyzing wage and earnings data for drivers working for the four largest application-based firms: Uber, Lyft, Juno, and Via.
When economists at the New School and the University of California, Berkeley, released a report in July with some limited pay data, they found something alarming: driving for driving applications in New York is not a part-time job for people who want to make extra money.
More than half of their drivers transport full-time passengers, and about half of all drivers support families with children for that income. But their earnings are so low that 40 percent of drivers qualify for the Medicaid, and about 18 percent qualify for food stamps.
The low pay problem is largely related to how drivers are classified. Because they are independent performers, not employees, Uber and Lift are not required to pay a minimum wage.
In New York, the minimum wage now stands at $ 15 per hour for large employers. But in order to make the equivalent of that amount, independent contractors in the city will have to earn about $ 17 per hour, taking into account payroll taxes and some paid hours.
A new school report found that the average monthly salary for drivers based on applications in New York is about $ 14 per hour. "The companies with the app could easily absorb an increase in driver's salary by adjusting the minimum price and a little inconvenience to passengers," they wrote.
The car sharing companies disagree, and the new lawsuits indicate Lyft and Juno do not do in the fight against it.