Photo by Dan Gold on Unsplash

An Update on Uber’s New Minimum Wage

Spoiler alert: it’s not really a minimum wage.

This article is Part 2 in a series of articles about Uber’s new minimum wage for New York City drivers. Part 1 is below:

I previously wrote about the Taxi and Limousine Commission’s new regulation regarding ride-sharing companies in New York City. I noted in my first article that the regulation was announced on December 4, 2018 and was slated to take effect by the end of that month, but never did.

The basic premise of the regulation: all ride-sharing companies in NYC must pay a living wage to their drivers. The TLC came up with a fancy formula that suggested drivers would receive a minimum of $17.22 per hour after expenses (over $26 per hour before expenses).

According to an Uber representative who responded to my press inquiry, this formula was never intended to guarantee a minimum hourly wage, but a minimum guarantee per trip.

In other words, ride-sharing companies are not required to pay drivers hourly, nor to make up for a lack of earnings on a quiet day with few customers. They are only required to ensure that each successful trip results in a minimum dollar amount that could result in drivers earning a living wage, if there are enough customers taking trips.

According to Uber, that is.

The regulation itself is unclear, but it seems that there might be more to it than Uber is willing to divulge.

“The rules also account for the percentage of a driver’s on-duty time that is spent with a passenger in their car, or utilization … The companies with lower utilization rates would be required to pay higher driver compensation per trip to offset the time their drivers are waiting for a dispatch. The TLC will assess the driver utilization of each of the Largest FHV Companies on a regular basis and adjust and make public the company’s per-mile and per-minute driver compensation rates accordingly” (TLC Notice of Promulgation, December 4, 2018).

While there might not be a true hourly minimum rate, it is clear from the regulation that the average amount of time drivers spend waiting for customers will be factored into the ride-sharing company’s minimum per-trip guarantee. An individual driver’s time spent without a customer will not be factored in, but the company-wide customer dispatch rate will be.

This will essentially boost the per-trip rates of the lesser-used companies, as they will be required to make up for their drivers’ increased down time. In turn, customers will likely feel the impact as the cost of a trip would go up to ensure that drivers are being compensated fairly.

As for why the regulation hasn’t gone into effect?

Ask the TLC, Uber stated via email; the deadline to implement the new pay structure has apparently been extended until February 1.

technical writer • site reliability engineer • engineering leader • all views are my own • 👩🏻‍💻

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