Uber Technologies Inc., just days before the presidential election, proposes a cut to their New York City drivers’ base pay rate. The company is reportedly seeking to lower the prices of their rides and claims that the only way they will be able to do so is by cutting their drivers wages. The company is calling on the New York City Taxi and Limousine Commission, which sets the driver pay requirements, to lower the per-mile rate for driver pay by 6.1%. This would lower the rate to $1.277 from $1.360. This news comes from a letter that was reported sent to the regulator’s office on Monday morning. In the letter, Uber claims that gas prices have been falling so the pay can subsequently fall as well.
Inflation-related adjustments for the field are scheduled to occur annually every March.
Any rate changes would occur with these adjustments in March. However, Uber is posing these suggestions to the commission now as they are in early talks for changes that they can expect to be making. In addition to the pay rate reduction, Uber has proposed a ceiling of 3%, or the average rate reflected by the Consumer Price Index, (whichever is lower) when it comes to inflation based adjustments in the future. Uber argues that they have seen a steep decline in customer usage over the past quarter, with people utilizing their services less and less due to higher prices.
The higher prices for Uber came as a result of high insurance policy costs.
The Uber Senior Counsel member, Nicholas Davoli, wrote in the letter to the commission that the wage needs to be lowered in order to ensure their prices “no longer outpace inflation, and riders can continue to afford trips.” This is leading many to having strongly mixed feelings, as some express gratitude in the idea of prices dropping while others express discomfort in having that happen at the price of the driver’s pay.
Uber reported that if their proposed pay rate decrease goes through, customers will be able to see an average of $0.42 lower price for the average trip. The Taxi and Limousine Commission Commissioner, David Do, has stated that they are looking into the proposal from Uber but did not release any details beyond that. Just a little over a month ago, Do said in a public hearing that the commission plans to unveil their plans for driver pay protections by the end of the year and that they would include combatting the loopholes that Uber got away with in the past to avoid paying their drivers.
