NYC mandates $17/hour minimum wage for Uber, Lyft driversby Justin King
The move spells trouble for Uber as the company continues to post losses every quarter.
The New York City Taxi and Limousine Commission has mandated a minimum wage for ride-hailing drivers, affecting services such as Uber and Lyft.
Drivers must earn at least $17.22 per hour after expenses are paid, or $26.51 per hour gross. The commission estimates that the average pay for nearly 80,000 drivers will jump by more than $9,500 annually.
Uber has faced strong criticism from the traditional taxi business and its own community of drivers. Its payouts to New York City drivers are estimated to equate to less than $12 per hour. In other cities, separate analysis has pointed to wages around $9 per hour or less.
"TLC's implementation of the City Council's legislation will lead to higher than necessary fare increases for riders while missing an opportunity to deal with congestion in Manhattan's central business district," Uber's director of public affairs, Jason Post, recently said in a statement to Fast Company.
The minimum wage could be problematic for Uber's already troubled path toward profitability. The company has a clear dominant position after nine years in business, yet posts losses of hundreds of millions of dollars each quarter. Some analysts have questioned its ability to become profitable without significantly raising fares, which could make the company vulnerable to competition.