Lyft, Juno Sue City Over Minimum Wage For App-Based Drivers

Lyft, Juno Sue City Over Minimum Wage For App-Based Drivers

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.

Drivers will be guaranteed the pay rate even during slow periods, incentivizing companies to keep drivers busy, the Wall Street Journal reports.

"The vast majority of drivers on the Via platform are already earning more than the city's new minimum wage", the company wrote in a statement.

The companies, both Uber competitors, say the rule is "inherently flawed and fundamentally unfair".

The TLC's calculations for minimum-wage pay equals $17.22 per hour, which includes $15-per-hour minimum wage and extra for drivers' gas and auto costs. The amount covers the $15 minimum wage, a driver's gas, auto costs, miles traveled and time driving. The law, scheduled to go in effect February 1, mandates that companies pay drivers at least $17.22 an hour after expenses or $27.86 before expenses. Lyft said in its suit that the rule, which ties minimum pay to how often drivers have a rider in their vehicles, gives "an automatic and perpetual advantage" to Uber, a leader in the app-based ride-hailing industry.

"Our lawsuit does not target the law passed by City Council, but instead addresses the specific way the [New York Taxi and Limousine Commission] plans to implement the rules, which would advantage Uber in New York City at the expense of drivers and smaller players such as Lyft", Lyft Communications Manager Campell Matthews told Engadget. "They've failed repeatedly, and the TLC should not assist them in their efforts".

Lyft, which filed its similar lawsuit shortly after Juno, is not trying to stop the entire law, a spokesperson pointed out.

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"The idea that this lawsuit is about anything other than avoiding paying drivers a fair wage is laughable", said Jim Conigliaro, Jr. The utilization rate is the amount of time drivers have a passenger in the auto.

Lyft argues it opposes the way the Taxi and Limousine Commission is implementing the rule. The number is based on drivers' miles traveled plus time driving, which is then divided by "utilization rate". Judge Andrea Masley set a March 18 hearing and in the meantime offered app-based ride-hailing companies the option of placing the additional pay in escrow.

Uber had stayed silent on its competitors' lawsuits but in its blog post, Uber makes clear that while it is complying with the new law, it's not satisfied with how the TLC has applied the new driver pay minimum either.

"Shame on Lyft and Juno". "This would be a nightmare for drivers who are desperately awaiting this raise", a spokesperson for the group said Friday in a statement.

Juno didn't respond to an email seeking comment. "However, we also want to do right by our riders and are working hard to ensure that your ride remains as affordable as possible".

The minimum-wage rule is part of Mayor Bill de Blasio's effort to cap the growth of the app-based auto services and reduce traffic congestion.

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