Lyft, the ride-hailing company, is suing New York City over its new law requiring a minimum wage of over $17 per hour for drivers, the company said on Wednesday, just two days before the law is set to come into force.
Lyft alleges it will be put at a disadvantage compared with its larger rival Uber because of the way New York’s Taxi and Limousine Commission plans to implement the new wage floor. Uber has not contested the law or its implementation, although it argued against it before it was passed.
From February 1, ride-sharing drivers in New York City will have to be paid a minimum of $17.22 an hour after expenses, or $26.51 before expenses.
“Our lawsuit does not target the law passed by the City Council, but instead addresses the specific way the TLC plans to implement the rules, which would advantage Uber in New York City at the expense of drivers and smaller players such as Lyft,” said a Lyft spokesman.
“It’s no secret that Uber has tried to put us out of business in the past. They’ve failed repeatedly, and the TLC should not assist them in their efforts.”
The dispute centres around the ride-hailing companies’ utilisation rate: the amount of time a driver spends with a rider, compared to how much time he or she spends waiting for a ride or driving to pick up a passenger. The lawsuit seeks to have the law halted pending a hearing on how it should be implemented.
Lyft would like the minimum wage to be calculated across a whole week of driving, as it claims was allowed in the original law, rather than on a ride-by-ride basis. Lyft believes the current implementation would give Uber an advantage because they can offer drivers more rides, and so less waiting time. Uber did not comment.
As ride-hailing companies have battled regulators around the world, New York has taken significant steps to curb their expansion, becoming the first US city to approve a 12-month halt on issuing new for-hire vehicle licenses last year. The pause was designed to allow the city to measure the industry’s impact on traffic and wages. Uber ran an advertising campaign urging customers to petition against the regulation.
The New York Taxi and Limousine Commission did not respond to a request for comment.
New York’s mayor Bill de Blasio tweeted that the lawsuit was “unconscionable”. He said: “The overwhelming majority of these companies’ drivers earn less than minimum wage. We won’t stand for it in New York City, and we’ll fight every step of the way to get workers the pay they deserve.”
In a petition filed in state court in Manhattan, two black car services owned by Lyft say that because the rules base drivers’ wages in part on the number of rides they give, Uber can pay its busier drivers less money per ride and charge passengers less than its competitors.