NYC considers a minimum wage for Uber, ride-hail drivers

(CBS NEWS) New York City's taxi regulatory body is considering setting a wage floor for ride-hail drivers on platforms like Uber, Lyft, Juno and Via, equivalent to the city's minimum wage. If it succeeds, it would be the first such attempt in the country. 

The vast majority of drivers on these apps net less than $15 an hour, according to a report commissioned by the Taxi and Limousine Commission that was released Monday. About 40 percent earn so little they qualify for Medicaid, and 1 in 5 qualify for food stamps, the report found. That's worrisome considering the large number of people who drive for a ride-hail app.

"App-based drivers work more hours annually than all the workers in New York City's major industries, including banking, publishing and hotels. Uber is the largest employer in New York City, larger than JP Morgan Chase," said James Parrott, a co-author of the report and Fiscal Policy Director of the Center for New York City Affairs at The New School.

Uber, which is valued at $62 billion, maintains that its drivers are independent contractors, a position it shares with Lyft and other ride-hail apps. 

Boosting these drivers' pay, according to the report, could be done relatively easily. If each driver spent an additional two and a half minutes per hour with a paying fare, that would cover half of the necessary increase to a $15-an-hour equivalent, the study found. Average wait time would go up by just 12 to 18 seconds, it said.

"You might think that an industry that's growing so rapidly, in which drivers use a very big piece of capital equipment, would actually pay their workers quite well. That's not the case," Parrot said on a phone call with reporters. "The drivers are forced to spend much of their time cruising the city streets looking for passengers." 

The rest of the increase could be made up by increasing fares, decreasing the commission the ride-hailing app takes or decreasing the number of drivers on the road, the study found.

"We can't determine which of those the companies would choose. We can just point out that their commissions are quite high and they could easily absorb the increase in remaining cost through a decrease in commissions," said Michael Reich, the other co-author and a co-chair of the Center on Wage and Employment Dynamics at the University of California-Berkeley.

New York City's minimum wage will increase to $15 an hour at the end of this year. The study calculated the equivalent for ride-hail drivers' to be $17.22 per hour since they are not eligible for the paid time off that regular employees are. Currently, fewer than 85 percent of drivers earn less than this amount, the study said.

The proposal would be the first in the country to regulate the earnings of ride-hail drivers.

Uber did not immediately respond to a request for comment. The company toldthe New York Times it "believes that all full-time drivers in N.Y.C. — taxi, limousine and Uber alike — should make a living wage after deducting reasonable expenses."

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