Uber is blaming a rise in the minimum wage for its decision to boost prices in New York City.
In a statement to Bloomberg, Uber announced it will hike up the price of trips in New York City starting Friday (Feb. 1) because of the new minimum wage rule. While a spokesperson wouldn't disclose how much the price would go up, the company did reveal that since it now has to pay drivers for their return trips when traveling outside the city, some out-of-town fares will be subject to a surcharge. In addition to the price increase, passengers in most of Manhattan will start paying $2.75 more per trip, and 75 cents per trip for group rides, which are separate state congestion surcharges.
As for its drivers, Uber may axe certain bonus pay offers. And starting in May, its premium Uber Black service will only be offered to drivers with a customer rating of at least a 4.85 out of 5, while in September the service will be restricted to drivers with a vehicle from a small list of options.
The wage rule, passed in December by the NYC Taxi and Limousine Commission, awarded drivers minimum pay of $17.22 an hour. Both Lyft and Juno filed lawsuits this week in an attempt to block the rule. A hearing is scheduled for March, and in the meantime Judge Andrea Masley has given the companies the option of placing additional pay in escrow until her decision.
Uber isn't fighting the new wage rule, adding “we do not intend to hold back any portion of drivers’ earnings.”
“Shame on Lyft and Juno for prolonging the suffering for their drivers — thousands of hardworking New Yorkers — and their families,” said Jim Conigliaro Jr., founder of the Independent Drivers Guild, an advocacy group whose funders include Uber.
But Lyft has defended its actions, saying the new rule, which binds minimum pay to how often drivers have a passenger in their vehicles, gives “an automatic and perpetual advantage” to Uber.