Uber on Monday sent a petition requesting cuts to New York City drivers’ minimum pay, citing recent drops in the price of used cards and gasoline.
The rideshare giant asked the city’s Taxi and Limousine Commission to reduce the per-mile rate in its driver pay formula by 6.1% to $1.277 from the current $1.360, according to a letter obtained by The Post and first reported by Bloomberg News.
Uber’s pleas are a last-ditch effort to minimize costs as the company sees customers pulling back on frequent rides. CEO Dara Khosrowshahi said during the company’s third-quarter earnings call last week that Uber’s core US rideshare business had suffered after it passed along the cost of high insurance policies to riders.
The 6.1% reduction would ensure “prices no longer outpace inflation, and riders can continue to afford trips,” Uber senior counsel Nicholas Davoli wrote in the letter.
The proposed driver pay cuts would reduce the fare for an average trip by 42 cents, the company said.
The commission is set to make its annual inflation-related adjustments in March. Uber is requesting a ceiling of 3%, or the average rate reflected by the Consumer Price Index, whichever is lower, according to the letter.
The TLC told The Post it is reviewing Uber’s petition.
Uber’s request is not its first attempt to save on costs – a Bloomberg investigation last month found the company and its rival, Lyft, were locking New York City drivers out of their apps to avoid paying nearly $30 million in wages.
“We’ve received a wide range of suggestions and considerations from multiple stakeholders regarding minimum pay amendments,” TLC Commissioner David Do told The Post in a statement. “We are seeking to introduce a fair rule package that will use the full extent of TLC’s authority to close existing loopholes that the rideshare companies have been using to lock out hardworking drivers and pay them less.”
Rideshare app drivers reported being locked out of the apps for minutes or hours at a time. The lockouts were an attempt to make Uber and Lyft drivers seem busier on paper – and convince the TLC not to raise a key portion of its minimum wage formula during its annual review.
The frequent and unannounced lockouts left drivers struggling to support their families and working extra hours to make ends meet.
The New York Taxi Workers Alliance – which represents nearly 30,000 drivers and is backed by New York City Comptroller and mayoral candidate Brad Lander – has asked the commission to consider these lockouts when they recalculate the pay formula at their annual meeting.
The lockouts erased some of the drivers’ work – time spent searching for rides between passengers – from Uber and Lyft records.
In a letter last Friday, the TLC said it would propose new rules soon, but made no promises to adopt the alliance’s demands.
The commission has 60 days to consider or deny Uber’s petition to slash the pay rate.
Though Uber mentioned declines in gas prices – which have dropped about 38% from their June 2022 peak, according to the American Automobile Association – it neglected to mention an expected spike in commercial insurance rates, an expense drivers have to bear.
Uber claimed the more than 20% pay rate increases that the TLC introduced since 2019 to account for inflation will cover those hefty insurance costs.
Credit: Source link
