The tens of thousands of drivers braving New York City streets for Uber, Lyft, Juno and other similar taxi services are getting a big raise -- around $10,000 a year on average, according to the city's Taxi and Limousine Commission.
The commission this week passed rules requiring so-called ride-sharing companies like Lyft and Uber to pay their drivers more and give them additional job protections to make their pay more transparent. Unlike in many cities across the U.S., New York City regulates all types of taxi services in the city, including those like Uber and Lyft.
Under the new regulations, high-volume drivers will be ensured minimum pay per trip that comes out to about $27.86 per hour, or about $17.22 per hour after expenses.
In addition, those who provide wheelchair accessible taxis will be more likely eligible for payments of $14,000 a year when their car is on the road as well as other benefits that could pull up the average pay per year for drivers to an additional $1,700 a year. Fees that all drivers are charged for credit card processing from their employers will also be capped under the rules, cutting an average of $1,000 a year in costs for drivers, according to the commission. The rules are slated to go in effect next month.
Some 80,000 drivers will get the pay boost, the New York City Taxi and Limousine Commission estimated, with nearly all of them drivers of Uber, Lyft, Juno and Via.
"But that was a conservative number," Allan J. Fromberg, a spokesman for the commission, told TheStreet, adding that about 190,000 taxi drivers are licensed in the city in total.
The rules come as Uber and Lyft are reportedly eyeing going public, with Uber Technologies Inc. expressing interest of an initial public offering sometime next year, according to public statements by CEO Dara Khosrowshahi.
At nearly 10 years old, Uber has so far raised more than $24 billion, according to Crunchbase.com, including from Toyota Motor Corp. (TM) - Get Report and Softbank Vision Fund. Younger competitor Lyft has raised about $5 billion so far, according to Crunchbase.
A company spokesman told TheStreet in an email that Lyft believes all drivers should earn a livable wage and that the company was committed "to helping drivers reach their goals."
"Unfortunately, the TLC's proposed pay rules will undermine competition by allowing certain companies to pay drivers lower wages, and disincentives drivers from giving rides to and from areas outside Manhattan. These rules would be a step backward for New Yorkers, and we urge the TLC to reconsider them," said spokesman Campbell Matthews.
Uber emailed a similar statement to TheStreet.com, saying that the rules "will lead to higher than necessary fare increases for riders while missing an opportunity to deal with congestion in Manhattan's central business district."
While the pay rules are specific to New York City, they could gain the attention of other cities around the world, said Fromberg, who called them a "pretty big deal for us" and a result of two years of work.
"We were the first municipality to regulate ... Uber and Lyft drivers in that way," he said of the city's efforts to rein in the companies.
But while he said that Uber and Lyft have been critical of the city's rules, they still have large numbers of drivers who compete for business there, and "we do believe that other cities and other countries are watching what we do as they have for past initiatives of ours."