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By: Jordan Beker
Uber has formally petitioned New York City’s Taxi and Limousine Commission (TLC) to lower its minimum pay rate for drivers, claiming reduced expenses for drivers due to falling used car and fuel prices. According to a letter obtained by the NY Post and initially reported by Bloomberg, Uber is requesting a 6.1% reduction in the per-mile pay rate for drivers, proposing a drop from the current rate of $1.36 per mile to $1.277.
The rideshare giant argues that a rate reduction would help stabilize prices for riders, which it claims have outpaced inflation. Uber’s Senior Counsel Nicholas Davoli stated in the letter that such a change would allow fares to remain affordable for riders even as economic pressures impact both drivers and customers. Davoli emphasized that, in Uber’s view, keeping prices in line with inflation would make rides more accessible to the public.
The proposed adjustment would amount to an average fare reduction of about 42 cents per trip, according to Uber’s calculations. The NY Post noted that this request comes just months ahead of the TLC’s annual review in March, where the commission makes inflation-based adjustments to minimum pay rates. Uber is asking that any future adjustments cap the increase to 3% or align with the Consumer Price Index, whichever is lower.
Uber’s petition is part of broader cost-saving measures, as the company grapples with customers cutting back on discretionary spending. Uber CEO Dara Khosrowshahi acknowledged during the company’s third-quarter earnings call that passing rising insurance costs onto riders has impacted demand, causing some to scale back on regular trips. This slowdown has prompted Uber to find ways to balance operational costs without deterring riders.
The TLC confirmed to the NY Post that it is currently reviewing Uber’s petition. While this isn’t the company’s first attempt at controlling expenses, the NY Post highlights a Bloomberg investigation from last month, which revealed that Uber and rival Lyft have occasionally blocked drivers from accessing the app to avoid paying millions in wages. This practice of “locking out” drivers—sometimes for minutes, sometimes hours—effectively creates artificial driver scarcity, making it appear that fewer drivers are available. Critics argue that these tactics help Uber and Lyft to skirt adjustments to TLC’s wage formula during annual reviews, effectively pushing more financial strain onto drivers.
The New York Taxi Workers Alliance (NYTWA), which represents nearly 30,000 drivers, has called on the TLC to factor in these app lockouts when reviewing the pay formula in the upcoming annual meeting. The lockouts have led to lost earnings for drivers, reducing the time they can spend accepting rides and ultimately impacting their overall income. Drivers have reported that these lockouts, which often come without warning, force them to work longer hours to make ends meet.
In response, TLC Commissioner David Do told the NY Post that the commission is actively considering a range of perspectives as it prepares a “fair rule package” to address loopholes exploited by rideshare companies. He indicated that new rules may be on the horizon, but the commission has yet to decide on whether it will heed all of the NYTWA’s recommendations.
Uber’s petition also noted a 38% decline in gas prices since their peak in June 2022, though the company did not mention the anticipated rise in commercial insurance costs that drivers will need to cover.
