An Earnings Standard for New York City’s App-Based Drivers: Economic Analysis and Policy Assessment

James A. Parrott and Michael Reich

Chapter Chapter 14 in The Unexpected Economics of Minimum Wages, 2025, pp 363-449 from Edward Elgar Publishing

Abstract: We provide the first detailed analysis of the app-based transportation industry in a large metropolis. Concerned about reports of low earnings (after costs) among drivers working for the large app-based for-hire vehicle (FHV) companies, the New York City Taxi and Limousine Commission (TLC) wishes to establish a minimum driver pay standard. The policy would set an earnings floor of $17.22, the independent contractor equivalent of a $15 hourly wage, with an allowance for paid time off. We examine the need for and likely effects of the TLC’s proposed policy. Our analysis draws mainly upon administrative data collected from all the companies by the TLC, and we develop a model to simulate the effects of the policy. We find that a majority of the city’s FHV drivers work full-time and that 85 percent make less than the proposed pay standard.

Date: 2025
ISBN: 9781035358878
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