Seattle law will force Uber and Lyft to pay drivers a minimum hourly wage

Starting January, ride-hailing companies must pay drivers at least $16 per hour.

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Seattle’s city council has unanimously approved a minimum wage for Uber and Lyft drivers, joining New York as the second major US city to do so (via the New York Times). The law will require ride-hailing companies to pay drivers at least $0.56 per minute when there’s a passenger in the vehicle, on top of per-mile rates. That will assure drivers earn the city’s $16.39 minimum wage, assuming they spend half their time waiting for or driving to rides.

The new law is designed to protect the pay of drivers hurt by the COVID-19 lockdowns. “The pandemic has exposed the fault lines in our systems of worker protections, leaving many frontline workers like gig workers without a safety net,” said Mayor Jenny Durkan in a statement.

Seattle based its pay standard on a similar law passed in New York in 2018. California has taken measures further, requiring Uber and Lyft to classify drivers as employees, ensuring they’ll get benefits and make a living wage. All the measures are aimed at companies that have created armies of contract workers without the rights of regular employees.

Ride-sharing firms have vigorously opposed such laws, claiming they put drivers out of work and increase rates for customers. “The city’s plan is deeply flawed and will actually destroy jobs for thousands of people — as many as 4,000 drivers on Lyft alone — and drive ride-share companies out of Seattle,” a Lyft spokesperson told the NYT.

On top of the increased rates, the Seattle law requires Uber and Lyft to hand all tips over to drivers and to not count tips toward the minimum wage. They must also reimburse drivers for the costs of masks and other protective equipment.

The city may extend the minimum wage rules to other gig workers, as well. “I hope in the future we can work on similar legislation for other drivers … such as delivery drivers of packages as well as delivery drivers of meals and food,” said council member Lisa Herbold.