Lyft and Juno are suing New York City over new minimum wage requirements for drivers

Lyft CEO Logan Green speaks during a session at the South by Southwest (SXSW) interactive, film and music conference in Austin, Texas

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Lyft CEO Logan Green speaks during a session at the South by Southwest (SXSW) interactive, film and music conference in Austin, Texas
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Laura Buckman/Reuters

  • Lyft and Juno are suing New York City over a minimum wage law for drivers that’s set to take effect on Friday.
  • The companies, both Uber competitors, say the rule is “inherently flawed and fundamentally unfair.”
  • As it stands, the rule would guarantee drivers at least $17.22 per hour after expenses.

Ride-hailing drivers in New York City are set to get a legally-guaranteed minimum wage on Friday, but new lawsuits filed Wednesday from two Uber competitors could put a wrinkle in their raise.

Juno and Lyft say the minimum wage of $17.22 (after expenses) that was approved by the city council in December will make it impossible for their companies to compete with Uber, which still has the upper hand in most of the country including New York, the US’ largest ride-hailing market.

“Although the TLC’s professed goal of ensuring that FHV drivers are paid fairly is well-intentioned in theory – and, indeed, the very goal upon which Juno has modeled its business – the mechanism by which the TLC has committed to do so is inherently flawed and fundamentally unfair,” the lawsuit from Juno reads.

Lyft, which filed its similar lawsuit shortly after Juno, is not trying to stop the entire law, a spokesperson pointed out. Rather, the heart of the issue lies in a relatively complicated minimum wage formula that is calculated based time, mileage, and an industry-wide “utilization rate.”

“Our lawsuit does not target the law passed by City Council, but instead addresses the specific way the TLC plans to implement the rules, which would advantage Uber in New York City at the expense of drivers and smaller players such as Lyft,” spokesperson Campbell Matthews said in an emailed statement. “It’s no secret that Uber has tried to put us out of business in the past. They’ve failed repeatedly, and the TLC should not assist them in their efforts.”

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The formula was codified following a July report commissioned by the New York City Council from academic researchers James Parrott and Michael Reich. It found the median Lyft driver takes home $13.85 per hour – about 24% lower than the floor that would take effect Friday. Juno drivers were above the minimum, at $18.26 per hour.