Uber sues NYC Taxi & Limo Commission to block driver fare increase
Uber is suing the New York City Taxi & Limousine Commission (TLC), which approved last month higher fares for ride-sharing apps and taxi drivers amid post-pandemic driver shortages, rising operating costs and rising inflation. The transit company is trying to prevent an increase in the fares it must pay drivers in New York City by December 19.
On Nov. 15, the TLC voted to raise transit driver per-minute rates by 7.42% and per-mile rates by 23.93%, a decision by the board that aims to attract more transit drivers to routes to serve the increased number of passengers. request. In its petition, Uber called the increases “dramatic, unprecedented and unsupported increases,” noting that past fare increases ranged from 1.46% to 5.34% and “accurately reflect the impact of inflation”.
Uber accused 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 could not recover from. Alternatively, Uber could offset the additional payments by raising passenger fares, but the company said this would result in a 10% increase for passengers, which “would irreparably damage Uber’s reputation, damage goodwill and risk a permanent loss of business and customers”.
The ride-sharing giant went on to say that the disputed rule will hurt passengers, drivers and the ride-sharing industry as a whole. Uber accused the TLC of not offering a solution to balance those risks.
“A fare increase of this magnitude may very likely result in higher fares for passengers,” the lawsuit states. “These higher fares, in turn, will reduce the number of rides requested through the Uber platform. Fewer rides requested translate to fewer opportunities for drivers to earn fees. The challenged rule could very well have the effect of hurting drivers’ incomes, thus undermining the purpose of these regulations.
Uber asked the court to issue a temporary restraining order and a preliminary injunction to block the implementation of the TLC rule pending a decision on Uber’s motion to block it entirely.
Taxi and Limousine Commissioner David Do said in a statement that the city must “support our workers without traditional job protections.”
“New York City leads the nation in driver protection, and this important rule reflects that reality,” Do said. “We are confident that we are well within our legal authority to implement this important rule, and we are vigorously fighting this lawsuit.”
Uber has challenged rulings in the past that are designed to protect gig workers. Last year, a top court in California ruled that Proposition 22 — a ballot proposal that passed in 2020 and defines hail and gig workers as independent contractors, not employees, and therefore not eligible for certain labor protections – was unconstitutional and unenforceable. Uber in turn filed an appeal to invalidate AB-5, California controversial law on the employment status of gig workers as unconstitutional and block its application. This ongoing court spree buys Uber time by clogging up the legal system so the company can continue to operate without making changes.