A raise for Uber drivers that was supposed to kick in next week has stalled after a New York judge on Tuesday temporarily blocked the Taxi and Limousine Commission's plan.
Uber sued on Friday, claiming in court documents that the raise would force the company to pay their drivers an additional $21 million to $23 million per month. The company argued that increasing ride-hail driver pay would require a 10% fare increase, which would be detrimental to business.
What You Need To Know
- Uber drivers were supposed to get a raise starting next week
- The raise has been put hold, after a New York judge temporarily blocked the Taxi and Limousine Commission from increasing pay for ride-hail drivers on Tuesday
- The Taxi and Limousine Commission, the city's regulatory commission for taxis and app-based drivers, said it will appeal the temporary restraining order that was issued by a New York Supreme Court judge in Manhattan
Uber — which was founded in 2009 and arrived in the city just over than two years later — states that the reason for the pay increase was largely because of increased gas prices earlier this year. However, they claim in the lawsuit that gas prices have since dropped, and that they are the lowest they have been since February.
"Drivers do critical work and deserve to be paid fairly, but rates should be calculated in a way that is transparent, consistent and predictable," Uber spokesperson Freddi Goldstein said Wednesday. "Existing TLC rules continue to provide for an annual review tied to the rate of inflation; the for-hire vehicle industry is the only industry in New York state with this mandate."
The TLC, the city's regulatory commission for taxis and app-based drivers, voted unanimously to raise the costs of rides in November, marking the first time in 10 years it increased rates for yellow cabs. The Uber lawsuit will not affect yellow cab fares.
Uber and Lyft drivers were set to earn 7% more per minute and 24% more per mile as a result of the rate increases. The price for a 7.50-mile trip would have increased by about $2.50, according to the New York Taxi Workers Alliance, the union that represents city taxi and ride-hail drivers.
"We call on the city to stand firm and defend the rights of drivers to labor with dignity," Bhairavi Desai, president of the New York Taxi Workers Alliance, said in a statement on Friday. "Uber seeks chaos. We seek dignity. We are confident we will prevail."
The raises for ride-hail drivers will be postponed until at least Jan. 31. Both Uber and the city are both set to appear in court for a hearing on that day.