- Uber Technologies, Inc UBER and Lyft, Inc LYFT will have to increase the minimum pay rates for drivers in New York City by the end of the year, Engadget reported.
- The fare increase comes amid a driver shortage post-pandemic, primarily due to rising operational costs.
- New York City's Taxi and Limousine Commission (TLC) voted to increase the per-minute rates of ride-hail drivers by 7.42% and per-mile rates by 23.93%. Yellow and green cab rates will also increase by 23% by the end of this year.
- Also Read: Lyft To Let Go Of 13% Of Workforce, Divest Vehicle Business To Beat Slowdown
- The commission expected the higher pay rates would attract more taxis and drivers to the roads to serve increasing passenger demand.
- Now a sample trip of 30 minutes that goes 7.5 miles will require a minimum driver pay of $27.15, which is up $4 from actual rates and more than $2.50 from the current rates, according to the TLC, TechCrunch reported.
- The commission noted that this is still a minimum, and companies can pay drivers higher than that amount.
- Companies will continue to choose how much to charge passengers.
- In February, Uber and Lyft drivers got a 5.3% hike in minimum driver pay rate due to inflation and higher operational costs. Today's fare hike is on top of that.
- Ride-hail drivers can also expect an additional rate increase in March, depending on inflation, comparing December 2022 to September 2022.
- Last month, Uber urged the city to vote against the proposed fare increase because it meant the agency would be locking in this summer's high gas prices in perpetuity, only allowing expenses to go up moving forward.
- Price Action: UBER shares closed higher by 8.57% at $31.56 on Tuesday.
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