Uber and Lyft will start paying their drivers more by the end of the year, following a driver shortage due to the rising operational costs post-pandemic.
The Taxi and Limousine Commission (TLC) of New York City voted to raise the per-minute rates of the drivers by 7.42%, while the per mile rates will see a 24% increase, Engadget writes.
The Pay Increase For Uber And Lyft Drivers Were Requested Due To Higher Inflation Rates
This decision came after drivers sought out higher pay, which the Commission hopes to attract more operators and drivers amid their decreasing numbers and increasing passenger demands.
In a statement, the Commission emphasized that higher fare rates and minimum pay are the right things to do for the city as they will offset the increased operating and living expenses for drivers.
With the new pay rates, a sample 7.5-mile trip that lasts for 30 minutes will require Uber and Lyft to pay their drivers a minimum of $27.15, $2.50 more than its current rate.
Tech Crunch says that while TLC was the one to set the minimum pay for drivers, it is still within the prerogative of Uber and Lyft if they will choose to increase the pay even more.
It is still unclear what effects this decision will have on customers, but the Commission also noted that the ride companies still decide how much they will charge riders after the pay increase.
It is important to note that Uber urged the TLC to vote against the pay increase since it will mean that the company's expenses will rise in the future.
"While moving away from dynamic pay rates was long overdue, passing a rule that expressly says it won't be guided by economic reality going forward hurts riders, drivers, and the agency's credibility," Freddi Goldstein of Uber says.
However, the New York Taxi Workers Alliance (NYTWA) commended the Commission's decision to raise drivers' pay rates, emphasizing how necessary it is to support the cost of living in the city.
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This Is Not The First Time The Drivers Got A Raise, And It Will Not be The Last
Tech Crunch details that in February, Uber and Lyft drivers also got a 5.3% increase in minimum driver pay rate due to economic and operational reasons.
On top of the recent pay hike, drivers can also expect additional pay increases in March of 2023, based on the inflation comparison between December 2022 and September 2022.
The NYTWA explains that the continuous calls to increase the minimum pay for drivers are to make sure that they can take home at least $25 per hour per day to pay for their expenses.
"We're going to take the momentum of this driver raise which comes despite company opposition and after a long delay, and use it to power our fight for a job with dignified incomes, job security, and retirement," the union says.
The TLC has also agreed to the fare increases for yellow and green cabs in the city by the end of the year, along with the minimum pay increase for Uber and Lyft.
Engadget notes that TLC commissioner David Do says that this is the first taxi fare raise the city has seen in ten years.
With that, Do states that the Commission is confident that the unanimous vote for these changes will keep ride services in New York City sustainable, and ready to serve.
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