New York City has become the first in the U.S. to set a minimum wage for app-based car services. The city’s Taxi and Limousine Commission voted Tuesday to establish a per-minute and per-mile payment formula for Uber, Lyft, Via, Juno and Gett that is supposed to result in drivers earning $17.22 an hour. Regulators say it will raise drivers’ annual earnings by $10,000 a year.
“New York City is once again passing landmark regulation to protect workers in the unruly gig economy,” the New York Taxi Workers Alliance said in a statement.
The city’s minimum wage is set to increase to $15 an hour at the end of this year. The equivalent wage for drivers, who are considered independent contractors and have to cover their own expenses, is $17.22.
The rules are based on a proposal developed by economist James Parrott, fiscal policy director of the Center for New York City Affairs at The New School, that adjusts how much drivers are paid based on how much work they’re getting each hour. A report Parrott co-authored this summer found that most ride-hail drivers earn less than $17.22 an hour.
Uber spokesman Jason Post told the Associated Press the rules “will lead to higher than necessary costs for riders.” But taxi commission head Meera Joshi said she believes New Yorkers are willing to pay a little more so that drivers “are able to provide for themselves and their families.”
Traditional taxi drivers in New York, who operate under a different set of city rules, already make or exceed $17.22 on average, according to Joshi’s commission.
In August, New York voted to freeze new licenses for car services for one year while it studies their effect on the economy.