Uber Pushes for Pay Cuts in NYC to Keep Ride Prices Competitive
Patrick Callahan
Uber has formally requested the New York City Taxi and Limousine Commission (TLC) to lower the base pay rate for drivers by 6.1%—dropping the per-mile rate from $1.36 to $1.277. This move comes as Uber aims to make rides more affordable for customers in one of its largest U.S. markets.
- Inflation Cap: Uber wants to cap future pay hikes to a maximum of 3% annually, tied to inflation but never exceeding the average Consumer Price Index increase. The goal: keep ride prices in line with inflation.
- Slowed Growth: With higher insurance costs passed on to customers, Uber is seeing slower growth in its core rideshare business, prompting the push for more affordable pricing to boost demand.
Uber’s letter to the TLC, seen by Bloomberg, argues that falling fuel prices and stable vehicle costs justify the pay cut. The company says this reduction could lower the average fare by 42 cents, encouraging ridership while balancing driver earnings.
Insurance Costs Looming: Despite a request for a pay cut, Uber’s proposal omits mention of rising commercial insurance costs, a major expense drivers must cover. The New York Department of Financial Services recently greenlit significant rate hikes for American Transit Insurance Co., NYC’s main taxi insurer.
Pushback & Political Pressure For Uber’s Wage Cuts
- Driver Advocacy: The New York Taxi Workers Alliance, backed by city Comptroller Brad Lander, has filed its own petition for better protections. The group is calling for stricter data reporting and safeguards against driver lockouts, which temporarily prevent drivers from working and affect overall earnings.
- TLC’s Response: Commissioner David Do plans to unveil new rules aimed at protecting driver pay and closing loopholes by year-end, though the commission hasn’t committed to adopting Uber’s suggestions.
Uber’s proposed adjustments underscore its drive to keep fares competitive amid an economic climate of falling gas and vehicle prices. Yet, with driver pay already a flashpoint, and regulatory pressure building around fair compensation, TLC’s next steps could reshape NYC’s rideshare market.
