Seattle approves new minimum pay standard for Uber, Lyft drivers

Seattle’s City Council on Tuesday unanimously approved a minimum pay standard for rideshare drivers.

Starting in January, companies like Uber and Lyft will be required to pay drivers an amount roughly equivalent to the city’s $16 minimum wage for large businesses.

“The pandemic has exposed the fault lines in our systems of worker protections, leaving many front line workers like gig workers without a safety net,” Mayor Jenny Durkan (D) said in a statement. “It is more important than ever that we add to the economic resilience of our community of drivers.”

The law sets per minute and per mile rates designed to fairly compensate drivers when they’re less busy. The figures were developed in collaboration with economists James Parrott from The New School and Michael Reich of University of California Berkeley, who conducted an independent analysis of Uber and Lyft rates in Seattle.

Their research, published in July, found that after accounting for expenses, drivers were making just $9.73 an hour. The rates calculated in the study are intended to lead to hourly pay around $28.19 before expenses.

When the law takes effect, Seattle will become the second city to have set a minimum pay for Uber and Lyft drivers. New York City passed a similar law in 2018, which Parrott and Reich were also involved in developing.

Lyft spokesperson CJ Macklin said in a statement to The Hill that the law is “deeply flawed and will actually destroy jobs for thousands of people — as many as 4,000 drivers on Lyft alone — and drive rideshare companies out of Seattle.”

A spokesperson for Uber pointed to a letter sent to Durkan and the City Council earlier this month asserting that New York’s policy has depressed rides while increasing pricing.

The strategy pursued by Seattle and New York City to secure fair pay for rideshare drivers is fairly different from the statewide approach sought by California.

The Golden State’s legislature approved legislation last year effectively requiring gig workers to be classified as employees instead of independent contractors, a reclassification that would guarantee basic labor protections like a minimum wage and the right to organize.

Uber and Lyft have resisted the law, while also pouring tens of millions into a ballot measure that would exempt them from Assembly Bill 5.