Uber’s New Minimum Wage
In early December, the Washington Post (among other news outlets) reported that ride-sharing drivers in New York City would now be entitled to a minimum wage. The Taxi and Limousine Commission set this rate at $17.22 per hour after expenses, and estimated that most drivers would see an annual wage increase of approximately $10,000.
The early media coverage was promising: by the end of 2018, drivers would be guaranteed an hourly rate of $26.41 before expenses, even taking into consideration long rides outside of New York City without customers for the return trip. After expenses, drivers could expect to earn $17.22 per hour, as long as they were online and accepting rides.
Sounds like a nice change. Except for the fact that nobody has said a word since then.
Several articles claimed that the regulation would go into effect within 20 days, meaning December 24, 2018. That day has come and passed. An official notice stated that it would take 30 days (putting us into early January).
Meanwhile, Uber hasn’t said a word to their drivers about the regulation, and from the looks of it, no changes are on the horizon.
I decided to call Uber directly to see what’s going on.
The only way to get in touch with Uber is through the driver app. I have a defunct driver app from over a year ago, but it still seems to work. A customer service representative answered the phone.
“I’m wondering when the new minimum wage will go into effect,” I asked.
“You will always find out how much a trip is worth when you start driving.”
“No, I mean the new minimum wage. You know — the guaranteed rate in New York City? It was all over the news?”
“Oh, let me look into that for you.”
“Hmm, yes, as I said, when you start driving, you will always know the minimum amount you will be paid for that trip.”
“I’m asking about the guaranteed minimum pay. The regulation that was just passed in New York. It was supposed to go into effect two days ago.”
“Hmm. Let me look into that for you.”
This went on for a few minutes until I gave up. It seems like Uber’s customer service representatives have no idea about the new regulation, when it will really take effect, and how it will affect their drivers.
Working for a ride-share company in a major city can be lucrative.
Some drivers report earnings exceeding $80,000 each year, but their expenses obliterate a significant chunk of this income. Uber’s fees aside, drivers must pay for:
- the car itself
- tolls for return trips without a customer
- TLC insurance, which tends to be more expensive than regular insurance
- vehicle inspections 4 times per year
- a bi-annual TLC inspection that costs $625, plus fees, bringing the total to $675
- vehicle maintenance, oil changes every month or so, and regular car washes to avoid getting bad ratings from customers
- amenities, such as bottled water, for customers
- their own health insurance
Oftentimes, the vehicle depreciates in value so quickly due to the amount of miles driven that drivers find themselves upside-down on their auto loans. A driver could put 100,000 miles on a car in three years and still have several years of payments remaining on the loan.
Meanwhile, Uber insists that its employees are independent contractors who are ineligible for benefits, unemployment, or paid time off.
And we know that making $80,000 isn’t the norm.
I spoke with a few drivers in New York City and found huge disparities in their earnings.
A few took home roughly $75,000 before taxes and expenses, working 10+ hours each day, 7 days per week. Others took home around $30,000 before taxes and expenses, working a more comfortable schedule, but not really making a living. Some reported earning $400 on a good day driving for Uber Black, while Uber X drivers reported some $200 days and some $24 days.
Feeling enticed by this new minimum wage? Don’t get your hopes up.
Mayor DeBlasio recently put an experimental one-year ban on the issuance of new TLC plates, so there won’t be any new drivers on the road until August 2019, at the very earliest. I went down to the TLC office last week to ask them about the specifics. They reported that the ban could be extended beyond a year if it is “successful” in limiting the amount of TLC vehicles on the road and increasing the opportunities for existing drivers to make a living.
And even so — we’ve seen no evidence of this minimum wage regulation going into effect for existing drivers, as promised.
So I kept digging:
A quick review of the TLC’s “Notice of Promulgation” regarding the enforcement of the new minimum wage regulation yielded the following information:
“To enforce these rules, TLC will investigate and prosecute driver complaints and audit trip records on a regular basis. TLC will require the Largest FHV Companies to submit additional information on driver pay, passenger fares, driver working time, and trip distance to facilitate these audits and inform future policymaking. The Largest FHV Companies will also be required to provide driver receipts that list the applicable per-minute and per mile rates, the number of miles for each trip and the number of minutes for each trip so that drivers can determine whether they were paid at least the minimum amount required by this rule.”
Uber drivers of New York City: don’t hold your breath. I’ll report back if I hear anything, but something tells me that this won’t be as simple as “turn on your app and make a living wage”.
Updated at 11:01 PM EST on 12/27/18 to add: I have been in touch with Uber’s corporate office and will be reporting back shortly with all of the details. Spoiler alert: it’s not really a minimum wage.
Updated at 6:06 PM EST on 12/26/18 to add screenshots of correspondence with Uber.