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Judge rules Lyft must follow New York rules for driver minimum wage

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Ride-hailing company Lyft must abide by a new rule in New York guaranteeing the equivalent of a minimum wage to drivers, a judge ruled Wednesday.

[NEW YORK] Ride-hailing company Lyft must abide by a new rule in New York guaranteeing the equivalent of a minimum wage to drivers, a judge ruled Wednesday.

The company, which made its Nasdaq debut in March, has been fighting since January to block a city regulation starting in February requiring ride-sharing drivers to make at least US$17.22 per hour - a first in the United States.

Lyft insists that paying such a salary - which is based on a formula using a so-called utilization rate, meant to prevent drivers from spending too much time sitting in empty cars - would give its competitor Uber an unfair advantage, because they might be able to pay drivers less based on a higher utilisation rate.

But New York Judge Andrea Masley dismissed the concerns, arguing that the city's regulator, the Taxi and Limousine Commission (TLC), had already revised its calculation method based on Lyft's concerns and promised to review its effects "no less than annually."

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New York Mayor Bill de Blasio heralded the decision in a statement.

"This is a victory for the hardworking drivers of New York City, who have been taken advantage of by these companies for far too long."

And the head of an organisation representing independent drivers said Judge Masley's ruling was clear.

"By upholding this law, the courts today ensured that the more than 70,000 drivers and their families who have been struggling to get by on less than minimum wage for years will finally have the certainty of a decent wage," said Jim Conigliaro, founder of the Independent Drivers Guild.

Democratic bastion New York City, the world's biggest market for ride-hailing mobile platforms, in 2018 set a minimum wage for such drivers over the objections of companies like Uber, Lyft and Juno.

An hourly minimum wage of US$17.22 should guarantee drivers the equivalent of the state of New York's US$15 minimum wage after costs.

It could translate into an annual average earnings increase of US$9,600 per driver, according to estimates.

The decision sent Lyft shares downward Wednesday, as the company ended the session down 1.76 per cent to US$58.75.

AFP