Lyft and Juno sue NYC over driver pay rules

Woman ordering a taxi ride with mobile app on smartphone in the city

Lyft and Juno sue NYC over driver pay rules

This week Lyft and Juno filed a lawsuit to challenge and delay the wage hikes. The company said that by requiring a minimum payment to some drivers per trip rather than just per week, the rule would encourage drivers to focus on shorter trips in more congested areas and hamper its ability to offer cheaper fares when there's less demand.

Ride-hailing companies, Lyft and Juno have reportedly filed a lawsuit against the city of NY for implementing a new law that makes it mandatory for the firms to pay drivers a minimum wage.

The ride-hailing companies classify their drivers as independent contractors, meaning that they, like their counterparts in taxis, have been excluded from many federal labor protections, including the right to unionize, and from local protections like the city's $15 minimum wage for workers at companies that employ more than 10 people. He said the lawsuit wasn't targeting the city council's law that mandated there be minimum pay rules for drivers.

The $17.22 per hour minimum (after expenses) is set through a formula that uses an industry-wide "utilization rate, which the crux of Lyft and Juno's argument against the law".

Without giving specific rate increases, Uber said "to account for the implications of this new rule, we will be increasing the price of Uber trips in NYC".

Lyft and Juno take issue with the minimum-pay formula's "utilization rate", which factors how often drivers on a platform have a customer in the vehicle.

Juno argues in a separate suit that even if the utilization rule was not inherently unfair, it is still based on flawed data.

"Shame on Lyft and Juno for prolonging the suffering for their drivers - thousands of hardworking New Yorkers - and their families", the group's founder, Jim Conigliaro Jr., said in a statement. It's based on a "utilization rate" that adjusts the amount drivers are paid per mile and per minute based on how much work they're getting per hour.

Judge Andrea Masley set a March 18 hearing for the lawsuit and in the meantime offered app-based ride-hailing companies the option of placing the additional pay in escrow.

Lyft drivers in New York City say they want to be paid a fair wage.

In August, Uber argued that stopping new drivers from joining the app would cause more problems. For some rides, Lyft might pay less than the required minimum, if other rides make up the difference.

Lyft and Juno, two New York City competitors with Uber, filed a lawsuit on Wednesday to block a new minimum wage for drivers that was set to take effect on Friday.

Uber, which isn't challenging the rule, said Thursday it had told the court "that we do not intend to hold back any portion of drivers' earnings". New York City also requires taxis to have special, expensive licenses called medallions, and increased competition from ride-hailing has seen the value of these medallions plummet, even pushing some heavily indebted drivers to commit suicide.

Juno didn't respond to an email seeking comment. The Juno case is Omaha LLC v. Both are in New York State Supreme Court (Manhattan).

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