Uber sues NYC Taxi & Limo Commission to block rate increase for drivers

Uber sues NYC Taxi & Limo Commission to block rate increase for drivers

Uber is suing New York City Taxi & Limousine Commission, which was founded in 2005. Last month approved A fare increase for taxi drivers and ride-hail app users is expected amid rising operational costs, higher inflation and a shortage of drivers. The ride-hail company aims to stop an increase in NYC drivers’ rates by December 19.

The TLC voted on November 15 to increase the per minute rates for ride-hail drivers by 7.42%, and the per-mile rates by 23.93%. This is a move that the commission made to attract more drivers to the roads to meet increasing passenger demand. Uber’s petition called the hikes “dramatic, unsupported and unprecedented” and noted that previous fare increases ranged from 1.46% up to 5.34%. They also pointed out that inflation has had an impact on earlier fare increases.

Uber accused TLC of using unsound economic principles in order to “achieve some predetermined result.” Uber claimed that the rule would require Uber to spend an additional $21million to $23million per month, a cost which the company cannot recover. Uber could also offset the extra payments by increasing rider fares. However, Uber claimed that this would cause a 10% increase in riders’ fares which would “irreparably harm Uber’s reputation, impair goodwill, and risk permanent loss to business and customers.”

Uber claimed that the challenged rule would harm riders, drivers, and the entire rideshare industry. Uber accused TLC of failing to propose a solution to balance these risk.

The lawsuit states that a rate increase of such magnitude could lead to higher rider fares. “Higher fares will result in a decrease in the number of Uber rides requested.” Drivers will have fewer opportunities to earn fees if there are fewer rides requested. The Challenged Rule could have the potential to harm Driver earnings and undermine the purpose of these regulations.

Uber asked the court for a temporary restraining and preliminary injunction to stop the implementation of TLC’s rule while it considers Uber’s petition to block it completely.

David Do, Taxi & Limousine Commissioner, stated in a statement that the city must support its workers without traditional employment protections.

Do stated that New York City is the leader in protecting drivers. “This important rule reflects this reality.” “We are confident that this rule is within our legal authority and are fighting vigorously against this lawsuit.”

Uber has challenged previous rulings that were intended to protect gig workers. California’s superior court ruled that Proposition 22 (a 2020 ballot proposal that defines ride-hail workers as independent contractors and not employees) was invalid. Unconstitutional Unenforceable. Uber in turn Appeal filed California’s AB-5 is invalidated Controversial law the gig worker’s employment status, and to block its enforcement. Uber is able to continue operating without any changes because of this constant volley in courts.

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