Why NYC Uber drivers are on strike, and what’s at stake in the fight for better pay

 

By Clint Rainey

December 19, 2022

Uber drivers are asking New Yorkers to take the train, hop on a Citi Bike, walk—just don’t hail a ride from them on Monday. The passenger boycott is timed for the same day, December 19, that higher pay rates were supposed to kick in for the city’s taxi and ride-hailing workers. Uber sued to prevent the rule from going into effect for its drivers, and the New York Taxi Workers Alliance, the drivers’ union, responded with a strike that is planned for all day Monday, from 12:01 a.m. until 11:59 p.m. 

The dispute between the two sides began last month, when the New York City Taxi and Limousine Commission voted to increase the per-minute rates of ride-hail drivers citywide by 7% and per-mile rates by 24%. The move was intended to lure additional drivers onto the streets to meet higher passenger demand. According to the commission, an average 7.5-mile trip through town lasting 30 minutes would now cost $27.15.

But two weeks ago, Uber sued, calling the TLC rate hike “dramatic, unprecedented, and unsupported.” Last week, the judge overseeing the case put the rate increases on hold until January 31, the lawsuit’s first hearing date. The TLC regulates all ride-hailing across New York, via both yellow cabs and app-based platforms. Uber’s lawsuit also impacts Lyft’s drivers—some of whom have joined their counterparts today, encouraging the public to boycott the Lyft app, too. However, wages did increase Monday as planned for taxi drivers.

In a “TURN OFF THE UBER APP!” flyer that is circulating today, the union has gone for Uber’s jugular. “Vindictive, greedy @Uber sued to steal our hard-fought, desperately needed raise,” it wrote, saying the raise was a lifeline “aimed at making sure drivers would no longer have to choose between food and fuel.”

The group points to a stat that claims riders pay 37% more today than they did pre-pandemic, yet Uber is fighting to stop drivers’ wages from increasing.

The past year has been difficult for New York’s 85,000 ride-hailing drivers, who have been hit with higher job-related costs (record-high gas prices) and higher costs of living at home (soaring inflation). Monday’s strike, unsurprisingly, has found some high-profile support:

Uber spokesperson Josh Gold tells Fast Company that “drivers do critical work and deserve to be paid fairly, but rates should be calculated in a way that is transparent, consistent, and predictable.” The company argues that the adjustment is a departure from previous TLC pay bumps, which were calculated annually, based on the previous year’s rate of inflation, and occurred every March. “Existing TLC rules continue to provide for an annual review tied to the rate of inflation,” Gold adds, noting this is “one reason why driver pay has gone up 38.4% since 2019.”

Many riders, meanwhile, have likewise noticed the recent mushrooming costs of Uber fares, though by how much depends on the data you look at. According to one recent estimate from Rakuten Intelligence, the price of a ride rose 92% from 2018 to 2021. Market research firm YipitData has pegged it at 45% between 2019 and 2022.

These spikes aren’t entirely because Uber’s base rates are going up. It admits rider rates have increased more than driver pay on some rides, but that is owing to all the new taxes and fees, it says—Manhattan congestion pricing, extra fees for airport pickups and drop-offs, and a new state-mandated black-car surcharge. It also objects to using fluctuating gas prices to calculate rate hikes, noting that gas prices have returned from the stratosphere. It proposes a temporary surcharge to offset gas prices, saving the inflation-pegged adjustment for March, like the TLC does every year.

But the company has also spent the past several months warning consumers not to expect prices to come down anytime soon. It continues hemorrhaging more than a billion dollars per quarter, which means the country’s ride-hailing habit is being kept afloat, essentially, by investors’ subsidies. Back in May, Uber CEO Dara Khosrowshahi called this “a long and unprecedented bull run,” but noted he had started picking up on a “seismic shift” in investor sentiment about the company’s losses. “This next period will be different,” he wrote, “and it will require a different approach.”

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