New York City regulators have given taxi drivers a boost in pay to keep up with rising expenses after an Uber Technologies Inc (NYSE:UBER) lawsuit blocked them from handing out a bigger raise late last year.
The increase was hailed as a victory by a group representing many of the drivers. The Taxi and Limousine Commission, which regulates companies like Uber and Lyft, had voted in November to increase the amount that ride-hail companies must pay their drivers.
Uber successfully sued to block the raise arguing that it was too high and based on faulty calculations by the commission. The aborted pay raise last year was roughly 10%.
For a trip of 7.5 miles and 30 minutes, the new rates will require a minimum payment of US$26.76 for drivers, for example, an increase of US$2.16, or about 9% over rates last year. A representative for Uber confirmed that the pay increase would be passed along to passengers.
Since the lawsuit, drivers have received a fixed raise, pegged to inflation, of about 6%. The pay hike voted on by the commission on Wednesday adds to the inflation-linked increase, bringing the pay of drivers up by roughly 9% in total since the start of the year.
Uber had argued that the increase voted on in November was based on untested methodology that included last summer’s sharp increase in gas prices, which eventually cooled. A judge sided with the company in January and urged the commission to come up with a better method to justify a raise.
In response, the commission worked out another formula using feedback from Uber and on Wednesday passed it unanimously as dozens of drivers cheered the decision at the agency’s headquarters in New York.