The Taxi and Limousine Commission (TLC) of New York City voted in November to raise the pay rates for Uber and Lyft drivers to compensate for inflation and operating expenses. However, new development is challenging these rates to go into effect.
Uber has recently filed a lawsuit against the commission to block these rates from its supposed implementation this coming Dec. 19.
LONDON, ENGLAND - SEPTEMBER 28: In this photo illustration a phone is held displaying the Uber logo as a taxi pases at Waterloo station on September 28, 2020 in London, England. The ride-sharing service won its appeal after Transport for London denied a renewal of its operating license late last year.
Why Uber Files a Lawsuit
According to Bloomberg's report, Uber claimed in its lawsuit that if the higher rates are put into effect, it would have to spend an extra $21 million to $23 million each month.
The ride-hailing company argued that it couldn't recover those expenses without increasing charges.
It should be noted that under the new regulations, drivers' per-minute and per-mile fees will both increase by 7.4% and 24%, respectively.
The drivers are also expected to receive a new rate hike by March 2023, based on the difference in inflation rates between December and September of this year.
A company representative told Bloomberg that by raising drivers' pay in December, TLC is permanently locking in the high gas prices from this summer.
Uber added that the Commission shifted to using a volatile inflation index for a one-time hike that "makes no sense" sudden departure from the TLC's past practice.
Read also: Uber is Taking Over New York's Taxi Industry, Book a Ride Through it with Same Price as UberX
"Grinch Move"
This move by the company did not sit well with the New York Taxi Workers Alliance (NYTWA). The organization's executive director, Bhairavi Desai, said in a statement that Uber is " just in time to steal Christmas from New York families, Uber is suing to stop the raise the TLC enacted for app drivers after months of public hearings, years of stalled wages, and the pandemic decimating incomes.
"Uber's Grinch move is on top of denying a fuel surcharge to only NYC drivers when costs skyrocketed due to record high inflation, forcing drivers in one of their most profitable markets to choose between groceries and fueling up," Desai added.
According to data analytics company YipitData, the cost of an Uber ride increased by 37% in September compared to the same month in 2019.
NYC noted that Uber and Lyft driver pay rates will rise by 7% per minute and 24% per mile. A trip that would last for 30 minutes and .5 miles would cost around $27.15.
Uber claimed that the city's estimate of the per-mile fee hike is inaccurate and is 16% since it fails to consider the required annual changes that would be put in place in 2020 and 2022.
The lawsuit asks the court to invalidate the raises and halt their implementation while the case is being litigated.
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