Uber and Lyft drivers will not be getting a raise before the holidays, as a judge in New York City temporarily halted the pay increases. This was supposed to go into effect on December 19th but will be put on hold until January 31st.

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Rideshare drivers demonstrate against rideshare companies Uber and Lyft during a car caravan protest on August 6, 2020 in Los Angeles. - The drivers, organized by the Mobile Workers Alliance and Rideshare Drivers United unions, say Uber and Lyft's are pushing a "deceptive" November ballot initiative.

NYC Court Temporarily Blocks Rate Hikes 

After the approval of New York City's Taxi and Limousine Commission, the Manhattan Supreme Court justice temporarily blocked the approved Uber and Lyft drivers' rate hikes that are supposed to go into effect on December 19th. 

According to Bloomberg's report, the increase will be put on hold until the hearing on January 31st. Meanwhile, taxi drivers' wage increases will still continue as planned. 

The lawsuit stated, "Such a significant fare hike, right before the holidays, would irreparably damage Uber's reputation, impair goodwill and risk permanent loss of business and customers."

The temporary block was requested by Uber in court. This decision is considered a partial victory for Uber's side, as the company called the increase dramatic, unprecedented, and unsupported. As per Uber, the rate hike would add to the company's expenses from $21 million to $23 million a month and higher fares for customers.

TLC Commissioner David Do shared his disappointment with this decision. "We are disappointed for the tens of thousands of drivers who are once again being made to bear the rising costs of inflation all on their own, with no help from the multi-billion-dollar company they work under. We will aggressively defend this important standard for our drivers."

85,000 ride-share drivers in New York are also disappointed with this decision, as they experienced soaring inflation and higher gas prices this year. Independent Drivers Guild President Brendan Sexton that the stunt of Uber was "nasty", especially since the holidays are coming.

Also Read: Uber vs. Lyft vs. Gig Economy: How the Battle Over Workers Will End, According to Analysts

TLC's New Rules

Pay rates for Uber and Lyft were supposed to increase by 7.18%, and a 16.11% hike for per-mile rates. Aside from this, an inflation-based pay raise is also expected to implement this upcoming March 2023.

Engadget gave an example that if your ride will be a 7.5-mile trip for 30 minutes, the driver would earn at least $27.15. This is much higher than the current rate as it increased up to $2.50.  

According to Uber's spokesperson Freddi Goldstein, passing a rule that clearly states that it will not be guided by economic reality is just a temporary solution for these trying times, and might hurt the riders, drivers, and the company's credibility in the future.

He added, "Drivers do critical work and deserve to be paid fairly, but rates should be calculated in a way that is transparent, consistent and predictable."

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