NYC court blocks pay raise for Uber and Lyft drivers

Uber sued the city's Taxi and Limousine Commission over the rate hike last month.

Mike Blake / reuters

A court has blocked a rate hike that would have increased pay for New York City Uber and Lyft drivers. Uber sued the city's Taxi & Limousine Commission (TLC) in December, claiming it used a flawed methodology to determine the per-minute and per-mile rate increases. Manhattan state court Justice Arthur Engoron agreed. “It’s just not enough to say there’s inflation and 100 drivers said gas prices shot up,” Engoron, a former taxi driver in his college days, said, according to Bloomberg.

In November, the TLC unanimously approved the city's first metered fare increases in a decade, including for ridesharing trips. Per-minute rates were slated to go up by 7.4 percent and per-mile rates by 24 percent. Under those planned hikes, a trip of 7.5 miles that took 30 minutes would have earned a ridesharing driver at least $27.15, an increase of more than $2.50 compared with current rates.

Uber argued that the rate increases would result in higher fares for customers while harming its reputation. A judge granted a temporary restraining order to pause the rate hikes a few days after Uber filed suit and before they came into effect on December 19th.

“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 Josh Gold told Bloomberg. “Existing TLC rules continue to provide for an annual review tied to the rate of inflation, which will take place in March.”

The company said implementing the pay raise would cost it between $21 million and $23 million per month. For the July to September quarter, Uber reported a net loss of $1.2 billion.

"We call on the Taxi and Limousine Commission to immediately redo the rules so drivers do not have to wait one day longer for their raise. A few missing words in a Statement of Basis and Purpose does not justify denying a raise meant to help thousands of drivers pay their rent and put food on the table for their families," Bhairavi Desai, executive director of The New York Taxi Workers Alliance, told Engadget in a statement. "Shame on Uber for spending millions on this heartless lawsuit only to deny drivers an increase of $1.66 more on an average trip. Uber woke a sleeping giant. This raise belongs to the drivers and we will not rest until it's back in our hands."