THE LEX COLUMN: New York rules prove too much for Juno
Ride-sharing firm files for bankruptcy on price rises and driver demands
Screeching to a halt on the streets of New York, local ride-sharing company Juno has filed for bankruptcy. The company’s demise bodes ill for start-ups that rely on cheap, gig-economy workers. Juno blames its failure on New York City’s decision to set a $17.22-an-hour minimum wage for drivers. As soon as workers were eligible for a living wage Juno collapsed.
Once the third-biggest ride-sharing company in New York after Uber and Lyft, Juno claims prices rose and rider demand halved as a result of the new law, cutting annualised revenues by a third. Its ride-sharing rivals will be glad to hear that Juno’s problems were not limited to wages. Marketed as a driver-friendly ride-sharing app, Juno was also beset by lawsuits from unhappy drivers.