New York City Takes a Step Toward Minimum Wage for App-Hail Drivers

Ferrier, Valerie - 300dpi
Valerie Ferrier

Executive Summary: The New York City Council (“the Council”) has adopted a suite of regulations of the app-hail ride industry. FordHarrison recently wrote about the minimum wage proposal: https://www.fordharrison.com/new-york-city-considering-mandatory-minimum-wage-for-app-hail-drivers.
Responding to increased financial pressure on drivers as a result of the lack of regulation of ride-hail services, as well as increased traffic congestion due to the influx of app-hailed drivers on the road, on August 8, 2018, the Council enacted multiple new amendments to the City’s Administrative Code in an effort to regulate the industry. But while one new amendment is being touted as a minimum wage for app-hail drivers, it does not, in fact, go that far.

Instead, the Council voted to require the Taxi and Limousine Commission (“the commission”) to “by rule establish a method for determining the minimum payment that must be made to a for-hire vehicle driver for a trip dispatched by a high-volume for-hire service to such driver” (i.e., an app like Uber or Lyft), and to conduct a study to determine “whether the establishment of minimum rates of fare to be charged by vehicles licensed by the commission would substantially alleviate any of the problems identified in such study. If the commission determines that such minimum rates of fare would have such an effect, the commission is authorized to establish by rule such minimum rates of fare.”

Thus, while the Council has garnered accolades from drivers groups for reigning in what is viewed by some as a renegade industry, the relief to drivers has been put off to another day, following completion of a study and rulemaking by the commission. And although there is promise that the commission will eventually adopt a minimum wage for app-ail drivers, in light of its initial proposal to act (without input from the Council) to impose a minimum hourly rate of pay of $17.22, there is no indication when such rule may take effect.

Employer’s Bottom Line: The most significant immediate impact of the amendments enacted by the Council is a one-year moratorium on new licenses being granted to for-hire drivers. This was aimed to benefit taxi companies and private car services, which have been impacted in recent years from increased competition brought on by more drivers on the road. However, the law is likely to continue to evolve in this area, both in New York City, and around the country, as more cities may decide to follow New York’s lead by enacting more regulations on ride hail apps. FordHarrison will continue to follow legal developments in this area.

If you have any questions regarding the updates to the laws, or any other labor or employment issues, please feel free to contact the author of this Alert, Valerie K. Ferrier, Senior Associate in the New York Office, vferrier@fordharrison.com. You may also contact the FordHarrison attorney with whom you usually work.

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