Lyft's effort to nullify New York City's first minimum wage law was blocked by a state judge on Wednesday, according to Business Insider . Judge Andrea Masley ruled that Lyft's lawsuit, which was filed in January, was not enough to overturn the law that went into effect in February.
According to the law that went into effect in February, emergency travel companies must pay drivers at least $ 17.22 per hour after expenses. The payment formula uses the so-called utilization rate, which represents the part of the time a driver spends with passengers in their vehicles compared to the time spent inactive and waiting for a fare.
Lyft affirms that it supports the spirit of the law to increase the wages of the drivers, but it is opposed to the formula used to guarantee higher payments. As of now, all rental vehicles in New York City must use the industry rate of 58 percent. But after a year, Uber may request a higher utilization rate due to its larger size. Lyft and another Juno passenger transport company filed separate claims alleging that the new law would put them at a competitive disadvantage for Uber.
The economists who made the rule argue that busy cars are good for keeping traffic moving and drivers pay, but Lyft and Juno say they can not keep drivers as busy as Uber because of their comparative size. Those companies say they fear being trapped in a downward spiral if they have a lower utilization rate.
"The FTA rules have affected the income opportunities for drivers and will diminish the competition that benefits drivers and drivers," said a spokesman for Lyft. "We will continue to fight to provide the best experience for drivers and pilots in New York City."
The groups of drivers applauded the judge's decision. "The judge's message today is clear," said Jim Conigliaro Jr., founder of the Independent Drivers Guild. "If the passenger carriers want to operate in New York City, they must pay the drivers fairly and comply with our minimum wage laws." This is a proud day for the drivers who organized with the Guild for years. , facing Silicon Valley giants, to win this historic wage protection. "
Uber and Lyft stopped accepting new drivers on their respective platforms in New York City, both cited new rules that penalize companies for driving too many cars without passengers in the streets of the city.The higher the rate of use of a company, the less will have to pay drivers to meet the new requirement of salary floor.The rules intended to increase the payment for drivers, while that addressed what many saw as an oversaturated market in New York City.