Uber is suing the New York City Taxi & Limousine Commission (TLC), which last month approved a fare increase for ride-hail apps and taxi drivers amid a post-pandemic driver shortage, rising operating costs and higher inflation. The ride-hail company is trying to prevent an increase in the fares it must pay drivers in NYC by Dec. 19.
On November 15, the TLC voted to increase taxi drivers’ per-minute rates by 7.42% and per-mile rates by 23.93%, a move by the committee designed to attract more drivers onto the road to continue to drive. serve more passengers. demand. In its petition, Uber called the increases “dramatic, unprecedented and unsupported increases”, noting that previous fare increases ranged from 1.46% to 5.34% and “accurately reflected the impact of inflation”.
Uber accused the TLC of using unsound economic principles to “achieve a predetermined outcome”. The company said the rule would force Uber to spend an additional $21 million to $23 million per month, a cost the company was unable to recover. Uber could also offset the extra payments by raising fares for passengers, but the company said this would result in a 10% increase for passengers, which would “irreparably damage Uber’s reputation, harm goodwill and increase risk.” would walk to lose clients and customers permanently.”
The ride-hail giant went on to say that the challenged rule will hurt riders, drivers and the ride-share industry as a whole. Uber accused the TLC of not proposing a solution to balance these risks.
“A fare increase of this magnitude could very likely result in higher passenger fares,” the lawsuit reads. “These higher rates will in turn reduce the number of rides requested via the Uber platform. Fewer rides requested translates into fewer opportunities for drivers to earn compensation. The Challenged Rule could very well have the effect of hurting the driver’s earnings, undermining the purpose of these rules.
Uber has asked the court to issue a temporary restraining order and preliminary injunction to block the implementation of the TLC’s rule pending a decision on Uber’s request to block it completely.
Taxi and Limousine Commissioner David Do said in a statement that the city “must stand with our workers without traditional labor protections.”
“New York City leads the nation in protecting drivers, and this important rule reflects that reality,” Do said. “We are confident that we are well within our legal authority in implementing this important rule, and we are vigorously fighting this lawsuit.”
Uber has challenged rulings designed to protect gig workers in the past. A California Supreme Court ruled last year that Proposition 22 — a ballot passed in 2020 that defines ride hail and gig workers as independent contractors, not employees, and thus ineligible for certain employment protections — unconstitutional and unenforceable used to be. Uber in turn appeal filed to invalidate AB-5, California’s controversial law on the employment status of gig workers, as unconstitutional and block its enforcement. This ongoing salvo in the courts buys Uber time by clogging up the legal system so the company can continue to operate without making any changes.
