Ride hailing apps like Uber and Lyft have become really famous among the riders as they find it really convenient to travel to places. However, lately, the users are finding it a little expensive. Uber and Lyft are charging their customers more nowadays. But do you know why? Let’s find out here.

The Uber and Lyft prices went up after the minimum wages decree for drivers by New York City. The ride hailing companies have been rattled by this minimum wage law established for drivers. The law is first of its kind.

Trip prices were increased by Uber since Friday. No specific details were given about the hike in prices. According to the minimum wage law, the drivers who take customers out of the New York City as to be placed more by the company. The customers will have to pay more in the form of surcharge when they travel out of town.

Uber and Lyft Ride Prices Too High? Here's Why
The customers will have to pay more in the form of surcharge when they travel out of town. Credits: Ride Share Apps

After the minimum wage law, the drivers will get wages around $17.22 – $27.86 per hour before expenses. The Taxi and Limousine Commission explained the rationale behind the law. The drivers had to pay payroll taxes, but they did not get paid time off.

There will be changes in the bonus offers given to the drivers as well. Some of the offers will be abolished and after May, only drivers with higher customer rating of at least 4.85 will get the opportunity to provide the premium Uber Black service.

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Hike in prices may push the customers to find alternative ways of travelling. The passengers will also have to pay a congestion charge.

Wage hike challenged by Lyft

Lyft is against this new law and has sued the New York TLC over the changes brought in law. As per their contentions, the new law would adversely affect the small players and it must not be forced on every rider.

YouTube video

Judge Andrea Masley gave the directions to the companies for depositing the additional pay for the drivers in an escrow account till the time a final order is passed regarding the matter.

Source: IBT, Uber Forum