A court could still determine that Juno and Lyft are right, that the new wage calculation favors Uber. The company said that by requiring a minimum payment to some drivers per trip rather than just per week, the rule would encourage drivers to focus on shorter trips in more congested areas and hamper its ability to offer cheaper fares when there's less demand.
A Manhattan judge has refused to halt a new city rule that will require ride-hail apps to pay their drivers a minimum wage starting Friday.
Juno and Lyft say the minimum wage of $17.22 (after expenses) that was approved by the city council in December will make it impossible for their companies to compete with Uber, which still has the upper hand in most of the country including NY, the US' largest ride-hailing market. A representative of Uber declined to say how much more expensive rides would become. In an email it sent to drivers Friday, it said that "riders will see increased fares, which may lead to fewer rides as people find alternative ways to travel around the city".
The city's ruling on for-hire vehicle driver wages said Uber, Lyft, Gett/Juno and Via account for 75% of the ride-sharing business in New York City, with the overall trips booming from 42 million in 2015 to almost 159 million trips in 2017.
Lyft Inc.is also raising prices, and also citing the new minimum wage.
Lyft claimed in court papers that the way the rule ties minimum pay to how often drivers have a rider in their vehicle gives "an automatic and perpetual advantage" to Uber, the largest company in the industry.
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Judge Andrea Masley set a March 18 hearing for the lawsuit and in the meantime offered app-based ride-hailing companies the option of placing the additional pay in escrow. Founder of the Independent Drivers Guild, which advocates on behalf of about 70,000 app-based drivers in NYC.
Yet Lyft and Juno say they don't oppose the $15 minimum wage, but they believe the complex formula for calculating pay under the new law is overly burdensome. "This would be a nightmare for drivers who are desperately awaiting this raise", a spokesperson for the group said Friday in a statement. It will make it more hard for smaller companies to compete on prices and payment for drivers, as well as continue to service less populated areas, the petition said. For some rides, Lyft might pay less than the required minimum, if other rides make up the difference. It's part of Mayor Bill de Blasio's effort to cap the growth of app-based, ride-for-hire platforms and reduce traffic congestion. The company did not immediately respond to a request for comment.
Uber, which isn't challenging the rule, said Thursday it had told the court "that we do not intend to hold back any portion of drivers' earnings".
The Lyft case is Tri-City LLC v.
According to the petition, Lyft argues that "instead of setting an industry-wide utilization rate that will at all times apply equally to each of the four ridesharing companies, the rule allows any company to use its own company specific utilization rate". New York City Taxi and Limousine Commission, 650574/2019. New York City Taxi and Limousine Commission, 650574/2019; New York State Supreme Court (Manhattan).