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Lyft, Juno sue New York City over new minimum wage law for drivers

Ride-hailing companies call the law 'inherently flawed and fundamentally unfair'

Smith Collection/Gado/Getty Images

Uber competitors, Lyft and Juno, have filed separate lawsuits against New York City's Taxi and Limousine Commission over a new law requiring that drivers for ride-hailing companies make a minimum wage of $17.22 an hour.

The companies say New York's measure is "inherently flawed and fundamentally unfair" and would make it impossible for them to gain ground against Uber, which dominates the U.S. market.

What are the details?

Engadget reported that the law was passed in hopes of bringing the earnings of drivers up to the existing $15 minimum wage floor, after a study commission by the city council found that while the median Juno driver makes $18.26 per hour, Lyft drivers made $13.85.

Yet Lyft and Juno say they don't oppose the $15 minimum wage, but they believe the complex formula for calculating pay under the new law is overly burdensome.

Lyft communications manager Campbell Matthews said in an emailed statement, "Our lawsuit does not target the law passed by City Council, but instead addresses the specific way the TLC plans to implement the rules, which would advantage Uber in New York City at the Expense of drivers and smaller players such as Lyft."

"It's no secret that Uber has tried to put us out of business in the past," Matthews continued. "They've failed repeatedly, and the TLC should not assist them in their efforts."

According to Edison Trends, Uber currently has about 60 percent of the ride-hailing market in New York.

Juno's lawsuit reads, "Although the TLC's professed goal of ensuring that FHV drivers are paid fairly is well-intentioned in theory — and, indeed, the very goal upon which Juno has modeled its business — the mechanism by which the TLC has committed to do so is inherently flawed and fundamentally unfair," Business Insider reported.

How did proponents of the law respond?

New York Taxi Workers Alliance executive director Bhairavi Desai said, "Shame on Lyft and Juno. These companies are collectively valuated at billions of dollars but claim to be too broke to pay drivers even minimum wage. ... Drivers organized too hard to win this victory and there is no way these companies will steal if from our hands," Engadget reported.

Mayor Bill de Blasio tweeted that the lawsuit was "unconscionable," arguing that "the overwhelming majority of these companies' drivers earn less than minimum wage."

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