New York City's 90,000 for-hire vehicle drivers will see a 5.3% wage increase next month, to reflect the rise in costs of goods and services. The raise could lead to an average increase of $3,800 in annual earnings.
"Drivers have served on the frontlines and have been there for their neighbors — driving them around the city and delivering food to those in need," Mayor Eric Adams said Friday. "This is about respect and paying each one of these individuals a fair and decent wage."
The city first established a minimum wage for the for-hire drivers in 2018, with drivers receiving at least $17.22/hour after expenses. Now, drivers' pay rates, which are calculated on per-minute and per-mile formula, will increase to $1.161 per mile and $0.529 per minute.
Comptroller Brad Lander, who joined the mayor, Taxi & Limousine Commission officials and driver advocates at City Hall, explained that after the minimum wage went into effect, app companies "paid more attention to connecting driver at the end of one trip more quickly to the beginning to the next ... The law incentivizes companies to maximize the amount of times drivers are earning a fare, because they've got to pay them so that in the hour they're earning enough to cover expenses."
Before the law was passed, he said, the ride-hail app companies incentivized quick pick-ups, which meant more drivers on the streets but many without passengers. The evidence from the current driver pay formula, Lander said, leads officials to believe that the raise will not have a significant impact on passengers.
“It will take care of our family, it will take care of our bills, it will take care of our future,” said Amara Sanogo, a 53-year-old Uber driver who was among those who came to City Hall to stand alongside the mayor as he made the announcement.
“It’s a long time coming,” he added.
Sanogo, a former yellow taxi driver, said business has remained slow. He said he drives 8 to 9 hours a day but can go for as long as 1 hour without a passenger.
The raise does not apply to other sectors of the for-hire driver industry, including yellow and green taxi cabs. Bhairavi Desai, the executive director of New York Taxi Workers Alliance, a union that represents them, said her next goal was to pursue increases for those other drivers as well.
In a written statement, Desai had said the raise was "triggered" by NYTWA's letter pointing out that the TLC apparently "fail[ed] to make required annual increases to high volume for-hire service drive pay rates." (High volume for-hire services are those with over 10,000 trips per day; Lyft and Uber are the only two companies with those licenses, according to the city.)
Research from economist James Parrott, director of fiscal policies at the Center for New York City Affairs at the New School, helped create the driver pay standard.
Parrott lauded the pay raise, "This cost-of-living adjustment makes a big difference for workers given the high inflation we’re experiencing right now and is a reminder that New York State needs to adjust its statutory minimum wage level for the inflation that has taken place over the past three years.”