Why Are Uber, Lyft Prices In NYC So High? Blame This New Law

Riders using ride-sharing apps Uber and Lyft in New York City are now paying more. This follows the minimum wages decree by New York City for drivers working in ride-hailing companies.

The first-of-its-kind minimum wage law for drivers has rattled ride-hailing companies. Uber increased trip prices from Friday although the amount hiked was not specified.

The minimum wage law stipulates that companies have to pay more to the drivers if they take passengers to places outside of NYC. They will tax passengers further in the form of a surcharge for out-of-town fares.

The minimum wage will help drivers get a take-home wage of $17.22 per hour or $27.86 before expenses. The rationale of a minimum wage for drivers was explained as their liability to pay payroll taxes but not get paid time off, according to the Taxi and Limousine Commission.

Uber stated that the wage hike of New York City drivers will be taken care of. But it hinted that suitable changes in the bonus offer and some the offers getting abolished. Also, starting May, the premium Uber Black service will be confined to drivers with a higher customer rating. That will be at least 4.85 out of 5.

Lyft also told its drivers that taxi fares will increase because of the minimum wage law. One side effect will be the fall in the number of trips as people start looking for alternate options to travel around.

Meanwhile, passengers in New York will have to pay a congestion charge as well. Under the New York State congestion surcharge, riders passing in the vicinity of Manhattan’s 96th Street will have to pay an extra $2.75 per trip. Metropolitan Transportation Authority will levy these congestion charges.

Lyft challenges wage hike

Meanwhile, Lyft and Juno sued the New York TLC over the minimum wage law. They contended that the new law would hurt small players and urged not to force minimum wage on every ride and appealed for its weekly computation.

They got a small relief from the New York State Supreme Court. Judge Andrea Masley directed the companies to put the additional pay for drivers into an escrow until there is a final call on the matter. They can also submit the funds for drivers on a weekly basis. Lyft said it would increase the pay of drivers and does not want drivers to be caught in the legal battle.