New York City votes to cap Uber and Lyft drivers, enforce minimum wage

Uber
car service on the streets of New York

shutterstock/MikeDotta

• The New York City Council just voted 36-6 to require
  ride-hailing apps like Uber and Lyft to pay their drivers
  minimum wage, and will prohibit them from hiring new employees
  for a year.
• The year-long  halt on new driver hires will go
  into effect 120 days after the bill becomes a
  law. 
• Uber was also recently required to classify NYC drivers
  as employees, rather than independent contractors, after the
  New York Unemployment Insurance Board ruled that Uber must
  provide unemployment benefits. 
• Councilmember Adrienne Adams said that 85% of
  ride-hailing drivers currently earn less than minimum
  wage. 

In a blow against Uber, Lyft, and other popular and fast-growing
ride-hailing apps, the New York City Council just voted 36-6 to
require ride-hailing services to pay their drivers minimum wage,
and to halt all new driver hires for a year,
Outline reports. 

The council met Wednesday to vote on the legislation, which Uber

rallied against in a social media ad campaign, titled
#Don’tStrandNYC.

The halt on new driver hires will begin 120 days after the bill
goes into effect. The estimated 80,000 ride-hailing drivers in
NYC had not previously been covered under the city’s minimum wage
of $13 per hour, and councilmember
Adrienne Adams said that 85% of ride-hailing drivers
currently earn less than minimum wage. 

Councilmembers were also concerned with the alarming rate at
which drivers are signing up for these services —especially
since a recent report indicates that ride-hailing apps
are actually
making traffic worse, not better. Transportation analyst
Bruce Schaller estimated that ride hailing services have resulted
in a 160% increase in traffic on city streets. The council’s cap
on driver hiring is meant to curb this growth. 

Uber was also recently in the spotlight in NYC, when the New York
Unemployment Insurance Board
ruled that Uber must provide unemployment benefits to its
drivers, effectively classifying them as employees instead of
Uber’s preferred classification of ‘independent contractors.”

In a statement, the Uber-linked local advocacy group Tech:NYC
called the measure “a step backwards,” saying that diminishing
the supply of ride-hailing vehicles won’t diminish the demand,
resulting in higher prices and longer waits for citizens. 

“While there’s no doubt City Council means well with this
legislation, the truth is it’s a misguided solution that’ll
create more problems than benefits,” reads the statement, in
part.

Representatives for Uber and Lyft did not immediately respond to
a request for comment.