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Uber sued the city for raising the minimum wage for rideshare drivers by almost 24% per mile. The lawsuit alleges that the drastic increases will cause damage to the entire ridesharing industry.
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Last month, the city Taxi and Limousine Commission approved the first metered price increase since 2012 -- which included increases in Uber and Lyft Inc. driver rates.
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Uber claims that the new hike would require Uber to spend an additional $21 million-$23 million per month during the holiday season, or raise rider fares by 10%. Uber sued Manhattan Supreme Court Friday. The suit also claimed that this would "irreparably harm Uber's reputation."
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The new rule will be effective from Dec. 19, raising driver pay by 7.42% per hour and 23.93% per mile, respectively. A sample trip of 30 mins and 7.5 mi requires a minimum payment amount of $27.15, according to the TLC.
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It is unclear what the exact cost of ride-sharing customers will be as each company will decide how high to raise fares.
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Uber claims the Uber price increase is "arbitrary, capricious", and will "harm riders, drivers, and ride-share industry in general" because rider prices rise, which means that rider costs and driver wages will fall.
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If drivers' earnings fall, it will undermine the purpose of the rule, the suit claims.
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Uber claims that the TLC "suddenly” changed how it calculates inflation driver pay. Uber claimed that the TLC picked a month or a small subset of months, and then switched to a volatile inflation indicator.
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The suit states this is a "disturbing departure" from past practice or any rational approach.
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The suit claims that "Fundamental economic principles reject" the Commission's approach and that it was chosen to produce a predetermined outcome.
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