The New York City App-based Driver Pay Standard:
Revised Estimates for the New Pay Requirement
Prepared By: James A. Parrott, Michael Reich, Jason Rochford, and Xingxing Yang
This brief provides an update to the report that Parrott and Reich issued in July 2018, "An Earnings Standard for New York City’s App-based Drivers: Economic Analysis and Policy Assessment,” and informs the final pay standard as incorporated in the Driver Income and Transparency Rules, adopted by the New York City Taxi and Limousine Commission (TLC) on December 4, 2018. The new pay standard takes effect February 1, 2019.
The pay standard establishes a minimum per-trip payment formula to provide drivers a minimum take-home pay after covering their expenses and taking into account drivers’ total working time. On an hourly basis, the pay standard is $17.22 after an allowance for expenses, the independent contractor equivalent of an employee’s $15 minimum wage with paid time off. The revised analysis presented in this update indicates that 96 percent of Uber, Lyft, Juno/Gett, and Via drivers (i.e. 76,800 drivers) will receive an annual average increase of nearly $10,000 under the minimum pay standard, which equates to a 45 percent net pay increase.
Since the July report, we have revised the our expense analysis and used new data to revise our estimate of the extent by which current driver earnings fall below the minimum driver pay standard. With the adopted rules, New York City becomes the first city in the U.S. to establish a minimum pay standard for app-dispatched drivers, and the first city anywhere with an incentive for companies to increase the percent of a driver’s time a passenger is in the car.