Will de Blasio Set a Minimum Wage for Uber Drivers?

The Taxi and Limousine Commission has a highly-regarded policy ready to go that could boost earnings for drivers and restrain the street-choking growth of ride-hail traffic.

Left to right: Moderator Bruce Schaller, TLC Commissioner Meera Joshi, Terri Gerstein of the Open Society Foundation, analyst James Parrott, and James Coniglario of the Independent Drivers Guild. Photo: Dave Colon
Left to right: Moderator Bruce Schaller, TLC Commissioner Meera Joshi, Terri Gerstein of the Open Society Foundation, analyst James Parrott, and James Coniglario of the Independent Drivers Guild. Photo: Dave Colon

What’s next for the proposal to establish a wage floor for app-based for-hire vehicle drivers? A panel of labor and taxi experts including TLC Commissioner Meera Joshi evaluated the plan and its immediate prospects at TransitCenter Monday night.

The plan drafted by James Parrott and Michael Reich would require e-hail companies like Uber and Lyft to compensate drivers at a rate of at least $17.22 per hour. In addition to a 22 percent raise for the average driver currently earning less than that rate, the policy would act as a brake on traffic increases caused by the ride-hailing companies, reducing the time drivers spend cruising without a fare.

The TLC, which commissioned the report by Parrott and Reich, can implement the policy through its regulatory powers. It’s essentially up to Mayor de Blasio whether to move forward. If enacted, the policy could set a national precedent for the ride-hail industry and other “gig economy” sectors that rely on independent contractors. But last week, the mayor’s office undercut Joshi, calling the endorsement of the report “premature” and signaling that de Blasio wants to work with the City Council on legislation to improve driver wages.

Joshi didn’t give a timetable for implementation last night, but she said she doesn’t expect riders to revolt if fares are a little higher due to a wage floor. “We added a 30-cent surcharge to taxi rides to help defray the cost of accessible vehicles,” she said. “And the public opinion was, ‘Oh if my ride goes up by 30 cents but that means someone in a wheelchair is gonna get a ride, I’m fine with that.'”

While the New York Taxi Workers Alliance opposes the TLC plan because they prefer to peg driver compensation to a standard meter rate, James Conigliaro of the Independent Drivers Guild, an affiliate of the Machinists Union that represents for-hire drivers in NYC, said drivers favor the wage floor.

Conigliaro also supports TLC regulation as opposed to a more unpredictable legislative process. “Keep the City Council away from this wage proposal,” he said. “The TLC has the data, they collect the data, they’ve done the study. Let’s let the agency go forward and set the wage standard for the industry rather than try to do that via a 50-person legislation basis.”

One concern he raised is a scenario where Uber “chops off the bottom 10 percent of drivers” who don’t keep pace with the wage floor by picking up more fares, which would be akin to “laying off 10,000 full-time workers in New York City.”

But according to Parrott, that’s unlikely. “[App companies] can only make money if their drivers are giving rides,” he said. “So if they diminish the number of drivers dramatically then their opportunity for their own commissions go down.”

Parrott also disputed the contention from the Taxi Workers Alliance that the $17.22/hour wage floor would double as a ceiling. About 15 percent of independent contractors driving for-hire make $17.22 or more per hour. The plan also includes a $1 bonus for drivers who take on shared rides, which was specifically added to prevent $17.22 from becoming a ceiling.

“Almost one-quarter of rides [an app services] are shared,” Parrott said, “and the sense is from looking at the data is the drivers providing those shared rides are under-compensated for that.”

Uber spokesperson Jason Post, observing in the crowd, said the company is “still digesting the report” and didn’t take a position on the proposal.

But Terri Gerstein of the Open Society Foundation said it’s completely fair to expect Uber and its peers to attain the same minimum compensation standard employers across the city will soon be expected to meet.

“Every mom and pop in New York City as of December this year is going to be paying $15 an hour as well as the employer portion of FICA and unemployment and all these other things,” she said. “If the bodega and supermarket and car wash can pay $15 an hour, it seems difficult to believe these app-based companies would not be able to do the same thing.”

  • Daphna

    Making a transportation option more expensive for users so that fewer people will opt for it should not be promoted as a way to alleviate congestion. Congestion pricing would be a much better way. Many working class people who work shift work depend on affordable taxi app rides late at night when subways run infrequently and many bus lines do not run at all; this measure will mean those rides will cost more even during off-peak times when reducing congestion is not an issue.

  • naaiym

    Pay for our gas,commercial insurance,maintenance,sick days, car payments and tickets if you want to pay drivers by the hour.

  • bolwerk

    I might not promote it for that reason (though it’s not an entirely daft reason either), but either way drivers deserve a living wage.

  • Ian Turner

    That this proposal would not apply to taxi drivers tells you everything you need to know about its true motivation: to bail out influential medallion owners.

  • John French

    “Making a transportation option more expensive for users so that fewer people will opt for it” is exactly the justification for congestion pricing, though.

    I agree congestion pricing is a good idea, but it would also increase the cost of Uber rides.

  • Jake

    Uber’s and all TNC’s ponzi scheme will implode very soon. Drivers are screwed as soon as they sign up. From the low wages they make now, to the wear and tear of their debt-mobiles aka leased cars. Uber’s/TNC plan has always been Self Driving Cars (SDV) on the road and all those who drive for them will become unemployed. There’s a brilliant video online that explains the truth behind driving for TNC’s. Just Google “Uber : After Expenses (Silent Film)”

  • Daphna

    The city has already decided on a living wage and set a minimum wage in place. Government should not be setting multiple different minimum wages for different jobs, industries, vocations, etc. Compensation should be a negotiation between employers and employees based on supply and demand. It is not the role of government to dictate each different wage amount.

  • bolwerk

    The minimum wage is far from a livable wage. If you support the existence of governments, I don’t see why the government has imperative to not set on a per-industry basis. And this has obvious advantages: it balances the interests of workers (drivers, in this case), firms, and society – clearly we’ve decided that digital ride hailing is somehow a necessity these days, and even opponents probably must acknowledge it fills a void in the outer boroughs where yellow/green cabs are rare. It improves the stability of of the industry as a whole. Keeping too many low-wage entrants out of the industry reduces its dependence on government benefits. It probably reduces violent driving too. At the same time, it even encourages competitive innovation to maximize the productivity of expensive labor.

  • Joe R.

    There are good reasons to have both for-hire drivers and food delivery people earn more money but it has nothing to do with the idea that they should have a livable wage. Rather, it’s that low wages encourage dangerous driving. It’s in the public interest then to raise wages so the incentive to cut corners is mitigated. As both for-hire car service and food delivery are non-essential services, it doesn’t matter if the higher charges resulting from higher wages decreases demand for them. The market will eventually adjust.

    That said, I vehemently disagree with the idea that every job should pay either a livable wage, or even a minimum wage. Pay should reflect the value added by the person doing the job and the skill needed to do the job. If a person is unable to earn a living wage they still have several options. One, make themselves worth more by developing new skill sets which pay more. Two, live with other people to split expenses. Three, move to a place with lower cost of living. Of these three, two is generally the most viable short-term option. For most of mankind’s existence we lived in extended family arrangements where you had several generations under one roof. Doing away with increased demand for housing, thereby increasing costs. It also resulted in more mental health problems. Extended families can offer companionship. They also split the workload of running a household. So maybe the real answer isn’t higher wages so everyone can have their own place. Rather, it’s to go back to the time-tested arrangement of extended families.

  • Joe R.

    For a lot of the people you mention a bicycle would be a perfect option. Cycling is very fast during off-peak hours when roads aren’t congested. It’s also essentially free, which is a big thing if you’re earning a low wage. Paying $27.50 a week for the subway is a big hit for such people.

  • bolwerk

    I would think it would also be in society’s interest for underpaid for-hire drivers to survive without direct state support, unless you want to re-jigger the welfare system too. That has positive outcomes for everything from diet to crime.

    There is no way to objectively measure value, but you can objectively measure costs of survival. If a job doesn’t have enough “value” that the person doing it can survive on something near their marginal product, the best answer is probably to automate it or not do it. Otherwise you’re arguing a particular job is important but that the person who does it is not.

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