NEW YORK, N.Y.—A State Supreme Court judge on March 18 denied Lyft’s motion for an injunction to stop the city from enforcing its new law setting a minimum wage for app-based drivers.
Judge Andrea Masley said she would issue a written decision on the company’s challenge to the law within 30 days.
Lyft filed the suit against the city Taxi and Limousine Commission Jan. 30, two days before the law, enacted by the city last December, went into effect. It requires app-based taxi companies to set their per-mile and per-minute pay rates high enough so drivers make at least $17.22 per hour after expenses or $26.51 gross. Lyft argued that formula favored Uber, because it is based on utilization rate,” the percentage of time cabs are occupied, and Uber has a much larger market share.
Juno also filed a suit challenging the law on similar grounds Jan. 30, but withdrew it March 15.
“We are pleased the judge denied Lyft’s motion to block the wage protection rules for now, and we hope she will uphold the city’s rules in her written decision,” Lyft driver Tina Raveneau said in a statement released by the Independent Drivers Guild. “We are finally making more than we have in years thanks to the new pay rules, but Lyft wants to bring it back to the way it was before, poverty wages.”
For Lyft to try to block higher wages when it was preparing an initial public offering of stock that values the company at $23 billion, Raveneau added, “is like a punch in the gut to us.”
In oral arguments, Lyft contended it should be allowed to pay less than the minimum rates on some trips, as long as the driver made the minimum over the whole week, and that it should be allowed to count bonuses toward the minimum. Lawyers for the city said that would undermine the policy of having a minimum pay rate, because drivers would be paid less on some trips.
“Lyft’s lawsuit specifically seeks to return to paying drivers less than minimum wage. Imagine the arrogance,” Independent Drivers Guild spokesperson Moira Muntz said in a statement.
The IDG, a Machinists Union affiliate that advocates for app-based drivers, campaigned for the minimum for two years before it was enacted. A report commissioned by the city Taxi and Limousine Commission last summer estimated that the law would raise pay for 85% of the city’s 61,000 active app-based drivers, by an average of more than $6,300 a year. It is also an incentive for companies to have fewer cars on the road, Muntz told LaborPress last month, because they’ll have to pay drivers more for the time they spend empty.
According to TLC figures, Uber, which has about two-thirds of the New York City market for app-based cabs, has the same 58% utilization rate as second-ranked Lyft.
Lyft put more than 30 million shares on the market March 18, expecting a price of $62 to $68 per share, according to the Associated Press. The filing said the company’s national market share has almost doubled, from 22% in December 2016 to 39% in December 2018. But it said it lost more than $900 million in 2018, despite doubling its revenues—the percentage of fares and other fees it collects from drivers—from $1.1 billion in 2017 to $2.2 billion in 2018.