NYC Raises Minimum Wage for Uber Drivers, and Surprise! The Fares Will Likely Increase

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Ride-sharing company Uber recently warned New York City would create higher fees for passengers after it decided to raise the minimum wage for employees of companies like it and Lyft.

According to USA Today, Uber’s director of public affairs said the wage increases would “lead to higher than necessary fare increases for riders.” Lyft similarly said the rules would constitute a “step backward for New Yorkers.”

The new rules, passed by the New York City Taxi and Limousine Commission (TLC) on Tuesday, would raise hourly wages to $17.22 after expenses and impact the vast majority of the city’s 80,000 drivers.

In a statement, TLC Chair Meera Joshi seemed to admit higher prices would result but said that New Yorkers were willing to absorb the costs.

Spencer Platt/Getty Images

“Companies are saying paying drivers fairly will cause longer wait times and higher prices,” Joshi said. “But I believe all New Yorkers are willing to pay a little more and wait a little longer so the people transporting them are able to provide for themselves and their families.”

The new rules followed a nation-wide push for massive increases to the minimum wage, policy conservatives have warned would lead to joblessness or higher costs.

IJR previously described some of the research surrounding minimum wage hikes:

  • Recent studies have pointed to minimum wage increases costing jobs and even increasing poverty by pricing people out of the labor market.
  • study shows a $1 wage increase led to roughly a three percent rise in poverty and government dependency over three decades. However, another study claims no “significant negative employment effect” was found after looking at multiple cities that increased their wages.
  • Research on the impact of a $12 minimum wage in Missouri found that approximately 11,000 workers would lose their jobs and a third of the wage increases would go to individuals who lived with their parents.

Earlier this year, IJR noted a report on the deleterious effect NYC’s $15 minimum wage had on the car wash industry.

Watch below:

A Reason magazine video showed car washes shedding jobs, turning to automation, and effectively creating a black market for car washes under the new regulations.

What do you think?

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TOM
Member

Aren’t Uber, etc. drivers independent contractors?

ron
Member

then stop the tipping. no one wants to count that money. why do you have tip someone for doing there job.

Bob Smith
Member

Oh damn! Is THAT the way the economy works??? None of my communist professors told me that!!!

Screwtape
Member

I wonder how unelected commissioner Joshi gets around?

I also wonder how one survives on $15/hr or even $17.22/hr in NYC, one of the most expensive places to live in the world.

$l7.22 x 40 x 50 weeks grosses less than $35k a year, less taxes–New York city, state, fed–and other charges like FICA, SS, etc.

No mention is made of how this will impact taxi and limo drivers. Is this a protective measure by the city for those unions? Will this protect the value of taxi “medallions”?

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