It was a hard-won victory, and one New York City’s app-based drivers now find themselves fighting to preserve. Last August, the City Council passed a law requiring the city’s Taxi and Limousine Commission to set a minimum wage for drivers with app-based taxi services like Uber and Lyft. The TLC’s minimum, $17.22 an hour after expenses, went into effect in February. But some drivers say they’re now making less money, as app-based companies tweak their algorithms to avoid having to pay that much.
“It’s never been worse,” Tina Raveneau of Brooklyn tells The Indypendent. Attracted by the flexibility the work seemed to offer, the 39-year-old single mother began as an app-based driver for Lyft two and a half years ago. She now finds herself struggling to pay bills and worries she’ll have to go on government assistance.
Lyft filed a lawsuit against the TLC in January, attempting to prevent the minimum wage from going into effect. After a state Supreme Court judge dismissed the suit in May, Lyft and later Uber took another route to escape the new requirements. They have both narrowed when and where drivers can sign in to their apps to work. Raveneau can get onto the Lyft app during the morning rush hour, but not during the time she is available.
She switched to Uber, but in mid-September, Uber began bumping drivers off the app if they don’t get to a “high-demand zone” within 30 minutes of dropping off a fare. Drivers say they are not being told when they have been bumped.
“I would think that I was working, but I wouldn’t really be working,” Raveneau said. But with no ride alerts coming into her phone as she drove around, it didn’t take her long to catch on to what was happening. The TLC has “all these regulations,” she says, “but drivers are still driving around, praying that they can get to a hot spot so that they can make money.”
The rideshare minimum wage is calculated based on utilization rate, the percentage of time the vehicle has a fare. The formula was proposed by Michael Reich of the University of California at Berkeley and the New School’s James Parrott, who conducted a study on app-driver earnings for the TLC last year and found that Uber and Lyft’s predominately immigrant drivers were earning $14.17 and $13.88 an hour respectively, less than the $15 minimum for New York City. The TLC adopted pay regulations meant to account for driver costs like gasoline and to compensate for the amount of time spent behind the wheel cruising without a passenger.
The minimum-wage law was part of a package of bills the Council enacted last August intended to help drivers. Another bill largely stopped the city from issuing new licenses for “for-hire vehicles,” the category that includes app-based cabs.
The two rival unions organizing drivers took opposing positions on that cap. The New York Taxi Workers Alliance, which uses a worker-center model to organize yellow-cab, black-cab, car-service and app-based drivers, supported it, saying that Uber and Lyft’s business model of flooding the city with vehicles had slashed drivers’ incomes. The Independent Drivers Guild (IDG), an International Association of Machinists affiliate that worked out an agreement with Uber in 2016 for a voice in the workplace without collective bargaining or employee status, opposed the cap. It advocates limiting the number of new drivers instead.
The IDG lobbied hard for the minimum-wage bill but does not advocate making app-based drivers employees instead of independent contractors. In September, after the California legislature passed a bill drastically narrowing when workers can be defined as independent contractors — who don’t have to be paid minimum wage and can’t legally form unions — Uber said it would not change. Drivers’ work is “outside the usual course of Uber’s business,” the company’s head lawyer argued, because it’s not a taxi company, it’s an app.
Under the TLC’s minimum-wage rule, when drivers fail to earn a base pay of $17.22 an hour after expenses, the companies are required to make up the difference. The TLC projected in January that it would increase earnings for the city’s 80,000-odd app-based drivers by a total of $737 million this year, more than $9,000 each.
The TLC doesn’t yet have figures on drivers’ incomes since Uber and Lyft began dropping drivers from the app when demand goes down, but at a Sept. 10 City Council hearing, acting TLC Commissioner Bill Heinzen said total driver earnings had risen $225 million in the first five months the rules were in effect. The IDG says that means the collective increase this year will fall $197 million short of the commission’s projections.
The TLC has “started to shift their language,” says IDG executive director Brendan Sexton. “Instead of saying ‘minimum pay per hour,’ they’re starting to say ‘average pay per hour,’ which completely changes the whole dynamic of what the minimum pay was. That’s like having a McDonald’s where one person makes $20, another makes $15 and another makes $10 — on average, sure, we’re all making $15 an hour.”
The wage law was meant to set a consistent minimum pay base for all drivers.
The IDG is calling for the TLC to be abolished and for the City Council to step in and close the regulatory loopholes Lyft and Uber are exploiting.
On Sept. 17, it organized a slow-motion motorcade that ground morning rush-hour traffic to a standstill as it oozed over the Brooklyn Bridge and along FDR Drive to Gracie Mansion, Mayor Bill de Blasio’s residence. An outraged Daily News editorial board called on the city to “bring down the hammer” if drivers attempted such a protest again. “Suspend ride-hail licenses,” read an op-ed published the following day. “Make arrests.”
But drivers like Raveneau say they will keep fighting until they are paid a wage they can live on. “We’re the drivers who move New York,” she says. “We should come first.”
Lyft follows Uber in suing NYC over cruising cap
Lyft’s lawsuit comes less than a month after Uber’s suit against the city rule
Less than a month after Uber sued New York City over rules that cap cruising times for its drivers, its rival Lyft filed its own suit urging the city’s Taxi and Limousine Commission (TLC) to nullify its “irrational and highly damaging cruising rule.”
The new rule, which the TLC voted to enact in August, aims to slash congestion in Manhattan below 96th Street by limiting the time drivers for app-based ride-hailing companies are allowed to spend without passengers. The rule would require companies to reduce cruising empty times to 36 percent by February and 31 percent by August. For-hire vehicles spent 41 percent of their time on the road idling without passengers, according to the TLC.
But Lyft’s lawsuit, filed in New York State Supreme Court on Friday, charges that the rule is based on a TLC study that used “outdated, unreliable data” and did not comprehensively study if those reductions are actually achievable. The San Francisco-based company argues that because the rule does not apply to taxis the change unfairly shifts business away from ride-hail companies.
“Lyft supports comprehensive congestion pricing, which is the most effective way to reduce traffic,” Lyft spokesperson Campbell Matthews said in a statement. “But the TLC’s rushed, arbitrary approach would be a significant step backwards for transportation in New York City, which for years has suffered from an inefficient taxi medallion system created by the TLC. This rule is not a serious attempt to address congestion, and would hurt riders and drivers in New York.”
TLC did not immediately respond to a request for comment, but told Crain’s that it is ready to defend against “another attack on the city’s consistent efforts to reduce congestion.”
“We will vigorously defend against this suit, and we will continue to fight for safer, less congested streets and for drivers’ rights,” a spokesperson for TLC said in a statement.
Uber contested the rule in September, along with another cap on new licenses for for-hire vehicles through August 2020. The company argued against the cruising cap on similar grounds, charing in a New York State Supreme Court lawsuit that the rule was the product of a “rushed and unlawful process” and that the final 31 percent target is “extremely ambitious” and based on a “deeply flawed economic model.”
City Hall spokesperson Seth Stein told Curbed at the time that the de Blasio administration “will continue fighting for the people of New York City against a company that seeks to put profit first, and the people and drivers they serve last.”
By Caroline Spivack
Hamptons Company Faces 52 Tickets In Taxi Cab Crackdown: Supe
A Southampton taxicab company is reportedly facing 52 tickets in a crackdown by Brookhaven Town, Supervisor Ed Romaine said.
According to Romaine, a joint investigation with the New York State Office of the Medicaid Inspector General into taxi companies operating in Brookhaven Town has resulted in one cab company receiving 52 appearance tickets, which could result in fines in excess of $26,000 — and facing further actions.
The taxicab companies, which were providing transportation services for Medicaid patients, were charged with violation of Brookhaven town code and face further violations of New York State regulations, Romaine said.
The joint investigation, which is being conducted by Town of Brookhaven Law and Public Safety investigators with Supervising Investigator Christopher Bedell of the NYS Office of the Medicaid Inspector General, is ongoing, with other taxi companies operating within the town under review, Romaine said.
“Brookhaven Town and New York State take Medicaid violations very seriously and we will continue to pursue any company that operates without a license to the fullest extent of the law,” Romaine said. “I have asked the town attorney to proceed with the investigation until every company is in compliance.”
In September, the Brookhaven town attorney’s office opened an investigation of unlicensed taxicab companies operating in town, with at least one allegedly conducting Medicaid pick-ups and drop-offs without proper licensing, Romaine said.
The town’s department of public safety began a review of taxicab companies that have not completed the licensing to conduct business in Brookhaven Town, Romaine said.
Among the numerous companies that were found to be in violation of town code, Hometown Taxi, located in the Town of Southampton, was also found to be conducting Medicaid transportation pick-ups and drop-offs in Brookhaven Town, Romaine said.
Under Brookhaven town code, a taxicab business operating in Brookhaven Town is required to secure a license from the Commissioner of Public Safety “or the designee of the same,” he said.
Brookhaven Town was informed by the NYS Office of the Medicaid Inspector General that several other taxicab companies have been providing transportation services for medical care involving Medicaid recipients without the proper licensing under New York State code, Romaine said in a release.
According to the code, “To participate in the Medicaid program, a taxi/livery provider must meet all applicable state, county, and municipal requirements for legal operation.”
Transportation companies and livery services must comply with all requirements of the local municipality . . . and with all requirements of the Department of Motor Vehicles, the code states.
A representative for Hometown Taxi was not immediately available for comment.
New York Said to Become Next Battleground for Gig Worker Law
The debate over gig worker rights could soon move east, as lawmakers in New York consider following California in making it harder for companies like Uber Technologies Inc. and Lyft Inc. to classify drivers as independent contractors.
Sen. Diane Savino (D) plans to introduce updated legislation that would extend protections such as unemployment insurance, workers’ compensation benefits, and minimum wage and overtime pay requirements to a new class of “dependent workers.” But a coalition of advocates already is pushing lawmakers to go further, adopting something similar to a new California law designed to force gig and a wide range of other businesses to reclassify independent contractors as employees.
“I think the core of our position has always been that the laws have to be universal, they have to protect and raise the standards for workers across the economy,” Bhairavi Desai, who runs the New York Taxi Workers Alliance, told Bloomberg Law. The alliance launched the coalition with Service Employees International Union 32BJ and the National Employment Law Project. “I think the role that people like us are going to play is to make sure that the gig companies don’t lobby to water down these laws or to win a carveout for themselves.”
The legislative push comes as Uber, Lyft, and other gig companies are under fire for their business model, treating workers connected to customers through online platforms as self-employed entrepreneurs. Those workers aren’t covered by a spectrum of employment laws and are on the hook for payroll taxes usually picked up by employers.
Discussions in New York signal that the closely watched California law to crack down on that practice could be spreading. That type of legislation is likely to bring court battles and a lobbying blitz.
“It’s not a question whether or not there will be worker classification legislation in New York,” says Bradley Tusk, a consultant who’s advised Uber and Handy, among other companies. “It’s a question of what will be in it.”
Tusk managed the last mayoral campaign of Michael Bloomberg, majority owner of Bloomberg Law’s parent company.
Cuomo Wants Bill
California Gov. Gavin Newsom (D) recently signed into law Assembly Bill 5, despite heavy opposition from gig economy companies like Uber, Lyft, DoorDash, and Instacart, and the larger business community. Critics of that law, which makes it much harder to classify workers as independent contractors, say it will gut a wide variety of businesses and bump up their tax bills.
“A.B. 5 is huge, both in terms of the change in the law but also the scope,” said Adam Abrahms, a California attorney for Epstein Becker who represents businesses in labor relations cases. “It will take years for us to really understand this. There will be lots of litigation, lots of consternation, and probably some industry leaving California.”
Uber and Lyft’s costs per driver could jump by more than 20% if they have to reclassify workers as employees, according to a Bloomberg Intelligence analysis.
New York Gov. Andrew M. Cuomo (D), at an unrelated event on Sept. 9 said the state could follow California’s lead, stressing the need to extend various legal protections to workers by redefining independent contractors as employees.
“And I think in my opinion, forget the specifics, more people should be considered employees because what has been happening is companies have been going out of their way to hire independent contractors to get out of those obligations,” he said.
Cuomo’s office didn’t respond to a request for more details.
The state Senate’s internet and technology committee will host an Oct. 16 public hearing on the “gig economy” in New York City to hear from stakeholders.
Assemblyman Marcos Crespo (D) and Savino, the committee’s chairwoman, introduced a bill (S.6538/A.8343) in June that would have created a new “dependent worker” classification and required the state labor department to study potentially giving those workers certain rights. The tag would have covered workers who provide personal services to a consumer through a private third party, which establishes the amount the workers earn, or is charged or collected from the consumer.
The dependent worker category was floated in 2016 by former Obama Labor Department official Seth Harris and Princeton University economist Alan Krueger. Supporters tout it as a middle-ground approach that allows gig workers to get some benefits and protections, while giving them the flexibility to set their own hours and shielding gig companies from certain tax and other liabilities. Critics are concerned that it will let companies off the hook for important responsibilities to their workers.
The bill, which stalled before the legislative session ended in June, wouldn’t have automatically extended new protections to “dependent workers.” Instead, it would have directed the state Labor Department to study the possible impact of extending a variety of protections, such as the right to unionize, strike, and demand minimum wages and overtime pay.
Savino, the bill’s sponsor, said the initial bill will “probably not be the right one for New York either” this time around because the new legislation should go beyond simply studying the issue.
Hearing Renews Talks
The Oct. 16 committee hearing will allow lawmakers to take another look at the issue, Savino said, and gather more information as they craft new legislation for the upcoming 2020 session, which begins in January. There could be more hearings to come on the topic, she said.
The worker group coalition hasn’t yet met with Savino, but she said she hopes they’ll take part in the conversation. The goal is to “begin to gather information, hear from all sides, and to begin to put together a comprehensive piece of legislation,” Savino said. “I know what the problems are. What we don’t have yet is the solutions, and I think that’s part of what the hearing is about.”
Representatives for SEIU 32BJ and the National Employment Law Project declined to comment. Uber didn’t respond to requests for comment.
Shortly before Newsom signed A.B. 5 into law in California, gig employers offered a compromise deal. They said they would ensure certain minimum earnings for drivers, commit to sector-wide bargaining, and provide some benefits in exchange for continuing to treat drivers as contractors. Lyft spokesman CJ Macklin told Bloomberg Law the company is likely to take a similar approach in New York.
“I think in broad strokes we are supportive of some kind of solution that provides a certain level of protection for drivers while maintaining the flexibility that we know they are seeking,” Macklin said.
Savino said New York’s in a different position than California, where a state Supreme Court ruling spurred support for the law. The court last year adopted the “ABC” legal test for worker classification, which makes it significantly more difficult to classify workers as independent contractors. A.B. 5 codified the decision in state law. The worker advocate coalition wants New York to follow suit.
New York has a “fresh landscape,” Savino said. “I think we’re in a better position to come up with what I hope to be a clear definition of what employees are and what independent contractors are.”
Still, lobbyists on both sides of the aisle already are gearing up for a fight in Albany over legislation that could eventually be tucked into an end of the year omnibus bill commonly known as the “big ugly.” That includes wrangling over possible carve outs for certain industries, debates over which protections should be extended to gig workers, and whether some of those protections can be extended to contractors without making them traditional employees.
“When Uber and Lyft came into town with this business model, we were the first to recognize that this is actual employment,” said Desai from the Taxi Workers Alliance. “We knew that it was just a matter of time that the law was going to catch up with them.”
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