{"id":218,"date":"2022-12-22T02:41:21","date_gmt":"2022-12-21T19:41:21","guid":{"rendered":"https:\/\/app.productlab.ai\/blog\/?p=218"},"modified":"2023-04-05T05:34:01","modified_gmt":"2023-04-04T22:34:01","slug":"uber-lawsuit-halting-nyc-pay-increase","status":"publish","type":"post","link":"https:\/\/app.productlab.ai\/blog\/uber-lawsuit-halting-nyc-pay-increase\/","title":{"rendered":"What To Know About Uber&#8217;s Lawsuit Over an NYC Pay Increase"},"content":{"rendered":"\n<p>Roughly one month ago, we <a href=\"https:\/\/app.productlab.ai\/blog\/mandated-pay-increases-in-new-york-city-for-drivers\/\">reported<\/a> that New York City\u2019s Taxi and Limousine Commission (TLC) was petitioning for a higher minimum pay for drivers, aka the NYC pay increase. <\/p>\n\n\n\n<p>With that announcement, we also advised it was likely that a rideshare company, specifically Lyft or Uber, would try to stop the change if their history of lawsuits for changes they did not like were to repeat itself.&nbsp;<\/p>\n\n\n\n<p>In the eleventh hour, about a week before due to start, Uber sued TLC, effectively blocking the increased rate from being approved. <\/p>\n\n\n\n<p>We\u2019re breaking down everything to know about the proposed rate hike and the reasoning for a strike down by Uber right here.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Proposed NYC Pay Increase<\/h2>\n\n\n\n<figure class=\"wp-block-embed aligncenter is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"NYC Uber &amp; Lyft Drivers Get New Minimum Pay Standard\" width=\"1200\" height=\"675\" src=\"https:\/\/www.youtube.com\/embed\/OTb-n3fLuSQ?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<p><\/p>\n\n\n\n<p>The policy that was supposed to be put into effect in December was one that promised a better living wage for rideshare and taxi drivers. The proposal, which was already approved by the NYC TLC, included an increase of 7% for per-minute rates and 24% for per-mile trip rates.&nbsp;<\/p>\n\n\n\n<p>The NYC pay increase would also include an additional $2.26 fee that would function as an expensive component to be used by workers for costs like car maintenance. <\/p>\n\n\n\n<p>The calculations were all part of a plan to raise the minimum wage to $23.82, one step closer to the goal of&nbsp; $25 per hour for drivers. Drivers, while also realizing they needed more than this slight adjustment, were optimistic at the promise of an increased wage.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-full is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/app.productlab.ai\/blog\/wp-content\/uploads\/2022\/12\/800px-Uber_logo_2018.svg_.png\" alt=\"uber logo - nyc pay increase post\" class=\"wp-image-188\" width=\"576\" height=\"200\" srcset=\"https:\/\/app.productlab.ai\/blog\/wp-content\/uploads\/2022\/12\/800px-Uber_logo_2018.svg_.png 800w, https:\/\/app.productlab.ai\/blog\/wp-content\/uploads\/2022\/12\/800px-Uber_logo_2018.svg_-300x104.png 300w, https:\/\/app.productlab.ai\/blog\/wp-content\/uploads\/2022\/12\/800px-Uber_logo_2018.svg_-768x267.png 768w\" sizes=\"auto, (max-width: 576px) 100vw, 576px\" \/><\/figure>\n\n\n\n<div style=\"height:38px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Uber\u2019s Reasoning for NYC Pay Increase Strikedown&nbsp;<\/h2>\n\n\n\n<p>In Uber USA LLC v. New York City Taxi &amp; Limousine Commission, Uber succeeded in temporarily blocking the city\u2019s move to increase driver rates. The roughly 100-page suit outlines the reasoning for why the courts should not pass the pay hike.&nbsp;<\/p>\n\n\n\n<p>Uber claims that their reasoning for blocking the pay increase is that the rate hikes are unprecedented. Despite being approved and largely favored by New Yorkers, Uber goes on to say the proposed change is \u201cdramatic, unprecedented and unsupported.\u201d<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">$20 Million Cost for Uber<\/h3>\n\n\n\n<p>The company says that the raises, though slight on a rider-by-rider basis, would cost the company an additional $21 to $23 million in fees each month &#8211; a cost that the company could not reasonably recover from.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Increased Costs for Riders<\/h3>\n\n\n\n<p>Evoking rider support, the company also goes on to state an NYC pay increase would not be plausible <em>unless <\/em>additional costs were offloaded onto rider\u2019s fares. <\/p>\n\n\n\n<p>The lawsuit states an average increase of about 10% for rider prices if the policy were to go into effect as is. This is, of course, something that no rider wants when fees are already as high as they\u2019ve ever been. <\/p>\n\n\n\n<p>Uber goes on to <a href=\"https:\/\/iapps.courts.state.ny.us\/fbem\/DocumentDisplayServlet?documentId=OJ2ngJWJLpP8Gd8GDZIrmg==&amp;system=prod\" target=\"_blank\" rel=\"noopener\">say <\/a>this increase will affect lower-income riders disproportionately.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Poor Holiday Timing<\/h3>\n\n\n\n<p>The suit says, \u201cSuch a significant fare hike, right before the holidays, would irreparably damage Uber\u2019s reputation, impair goodwill, and risk permanent loss of business and customers\u2026 The company said the commission suddenly switched to a \u201cvolatile inflation index for a one-time increase that makes no sense, and that is a drastic departure from the Commission\u2019s past practice or any rational approach.\u201d<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">A Flawed Rate Calculation<\/h3>\n\n\n\n<p>Uber also alleges that the TLC and similar groups based their rate increases on flawed equations and numbers. <\/p>\n\n\n\n<p>More specifically, the calculated need for higher pay was based on times of high inflation that have since fallen, meaning there is not nearly as much need as factored into the proposal.&nbsp;<\/p>\n\n\n\n<p>In the lawsuit, Uber refers to this as, \u201cthe Use of a Cherry-Picked Volatile Index for One-Time Only and Cherry-Picked Months of the Year.\u201d<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Falling Demand<\/h3>\n\n\n\n<p>Uber alleges that the increase in prices with an NYC pay increase offloaded to riders will lower overall demand having an adverse effect on drivers. In other words, despite there being higher pay rates, the demand may not be there, resulting in equal or lower pay anyway. <\/p>\n\n\n\n<p>If approved on December 19th as planned, Uber says, \u201cit carries the likely risk that riders request and take fewer trips on<\/p>\n\n\n\n<p>the Uber platform than they otherwise would have.\u201d<\/p>\n\n\n\n<p><em>Additional Reading: <\/em><a href=\"https:\/\/iapps.courts.state.ny.us\/fbem\/DocumentDisplayServlet?documentId=OJ2ngJWJLpP8Gd8GDZIrmg==&amp;system=prod\" target=\"_blank\" rel=\"noopener\">Uber USA, LLC v. New York City Taxi &amp; Limousine Commission<\/a>&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">New York City Uber Driver Strikes<\/h2>\n\n\n\n<figure class=\"wp-block-embed aligncenter is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\nhttps:\/\/twitter.com\/jaslinforqueens\/status\/1604925692952838145?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet\n<\/div><\/figure>\n\n\n\n<p>In response to the Uber lawsuit, New York rideshare drivers are striking. Initially, the strike was a 24-hour pause by some drivers to protest Uber\u2019s interception in the passing of the TLC\u2019s pay increase. <\/p>\n\n\n\n<p>The strike was set to begin at 12:01 a.m. and end at 11:59 p.m. on the day that the pay increase was supposed to go into effect. Not only were drivers asked to participate but also riders to help show their support for the driver wage increase.&nbsp;<\/p>\n\n\n\n<p>Major groups and politicians were behind this strike, including Alexandria Ocasio-Cortez, who encouraged New Yorkers to avoid using Uber for the day.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-embed aligncenter is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">\ud83d\udea8NYC: Do NOT use Uber this Monday, Dec 19th!<br><br>Local drivers won a raise that was set to kick in 12\/19. Uber sued to stop it, despite hiking prices 37% higher than they did in 2019.<br><br>How to help:<br>&#8211; Turn off your Uber app on Monday,<br>&#8211; Use another service, &amp;<br>&#8211; SPREAD THE WORD! \ud83d\ude98\ud83d\udcb0 <a href=\"https:\/\/t.co\/jPRyt2La7f\" target=\"_blank\">https:\/\/t.co\/jPRyt2La7f<\/a><\/p>&mdash; Alexandria Ocasio-Cortez (@AOC) <a href=\"https:\/\/twitter.com\/AOC\/status\/1603842731536777216?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">December 16, 2022<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>It was estimated that the strike included over 5,000 drivers and an unknown number of rider participants. Unfortunately, this strike seems to have little effect if Uber\u2019s rebuttal has any truth to it. <\/p>\n\n\n\n<p>The company stated in response to strike news that the day the strike occurred on December 19th, the Monday was as typical as any other Monday of the year. However, there\u2019s no way to validate this claim.&nbsp;<\/p>\n\n\n\n<p>The decision has been postponed until January 31st &#8211; much to the drivers\u2019 dismay, who were looking forward to an NYC pay increase going into effect before the holidays.\u00a0<\/p>\n\n\n\n<p>The New York Taxi Workers Alliance Executive Director Bhairavi Desai said, <\/p>\n\n\n\n<p>\u201cTo steal a raise from drivers who work so hard and on the eve of Christmas and the New Year hurts. It stings. But make no mistake, we\u2019re not crying in a corner. We\u2019re readying to fight the small-hearted pettiness of a billionaire company that just doesn\u2019t want to see its workers survive.\u201d&nbsp;<\/p>\n\n\n\n<p>It\u2019s likely that as there continues to be a back-and-forth discourse among Uber and unions that represent drivers, that continues strikes and discourse will occur. Conversations are likely to pick up after the New Year over whether an NYC pay increase is coming.&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Roughly one month ago, we reported that New York City\u2019s Taxi and Limousine Commission (TLC) was petitioning for a higher minimum pay for drivers, aka the NYC pay increase. With that announcement, we also advised it was likely that a rideshare company, specifically Lyft or Uber, would try to stop the change if their history &#8230; <a title=\"What To Know About Uber&#8217;s Lawsuit Over an NYC Pay Increase\" class=\"read-more\" href=\"https:\/\/app.productlab.ai\/blog\/uber-lawsuit-halting-nyc-pay-increase\/\" aria-label=\"More on What To Know About Uber&#8217;s Lawsuit Over an NYC Pay Increase\">Read more<\/a><\/p>\n","protected":false},"author":3,"featured_media":219,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[12],"class_list":["post-218","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-current-events","tag-rideshare"],"_links":{"self":[{"href":"https:\/\/app.productlab.ai\/blog\/wp-json\/wp\/v2\/posts\/218","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/app.productlab.ai\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/app.productlab.ai\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/app.productlab.ai\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/app.productlab.ai\/blog\/wp-json\/wp\/v2\/comments?post=218"}],"version-history":[{"count":5,"href":"https:\/\/app.productlab.ai\/blog\/wp-json\/wp\/v2\/posts\/218\/revisions"}],"predecessor-version":[{"id":469,"href":"https:\/\/app.productlab.ai\/blog\/wp-json\/wp\/v2\/posts\/218\/revisions\/469"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/app.productlab.ai\/blog\/wp-json\/wp\/v2\/media\/219"}],"wp:attachment":[{"href":"https:\/\/app.productlab.ai\/blog\/wp-json\/wp\/v2\/media?parent=218"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/app.productlab.ai\/blog\/wp-json\/wp\/v2\/categories?post=218"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/app.productlab.ai\/blog\/wp-json\/wp\/v2\/tags?post=218"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}