The New York City Taxi and Limousine Commission is facing a legal petition from ride-share company Uber.
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The petition, filed Friday in the New York Supreme Court, asks for a judge to temporarily halt per-minute and per-mile pay rate increases for drivers working for high-volume for-hire services that are slated to go into effect later in the month.
Uber claimed the rate hikes could cause “immediate and irreparable harm” to the ride-share company and result in higher fares for riders.
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It alleged the rate increases would “require Uber to absorb $21 to $23 million per month in increased payments, slashing significantly Uber’s expected variable margin in New York City” if none of the new costs were passed along to customers.
The company also took issue with how the New York City Taxi and Limousine Commission calculated the hikes, accusing it of “radically departing from established, consistently-applied practice” in the filing.
“We must stand behind our workers without traditional employment protections. New York City leads the nation in protecting drivers, and this important rule reflects that reality,” Taxi and Limousine Commissioner David Do said in a statement to FOX Business.
“We are confident that we are well within our legal authority in implementing this important rule, and we are vigorously fighting this lawsuit.”
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The rate increases the petition is seeking to halt were approved in mid-November by the commission. They are supposed to go into effect Dec. 19.
Under the adjustments, the per-minute rate is slated to go up over 7%. The per-mile rate is supposed to go up nearly 24% compared to what the transportation costs component of the metric was when the original rate was adopted in 2019, according to a city government document. In the petition, Uber said the per-mile rate approved in November would represent more than a 16% jump from what went into effect in March.
In a notice, the New York Taxi and Limousine Commission projected that with the new rates, high-volume for-hire services drivers would receive at least $27.15 in payment for a 7.5-mile trip that lasts 30 minutes, which would be “up more than $4.00 from the original rates and up more than $2.50 from the current rates.”
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“With this latest rulemaking, on top the annual inflation adjustment, the TLC is choosing to invent a new methodology that locks in this summer’s high gas prices in perpetuity with a ‘mid-year’ adjustment that takes place 12 days before the end of the year,” Uber spokesperson Freddi Goldstein told FOX Business. “The TLC should have followed its usual annual adjustment and instituted a temporary gas surcharge when gas prices were actually elevated.”
New York City first implemented pay minimums for app-based drivers in 2019, according to CNN.
Bloomberg first reported on Uber’s petition.
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