Seattle is considering a plan to set minimum pay for Uber and Lyft drivers
Along with a potential tax on Uber and Lyft rides, Seattle Mayor Jenny Durkan’s office is considering legislation aimed at bolstering the rights of drivers who use the apps, including possibly setting minimum pay, according to internal city records and letters exchanged between the Mayor’s Office and one of the ride-hailing giants Monday.
Though the proposals have been under discussion for months, the administration is not yet releasing details about the tax or minimum driver pay.
Transportation network companies (TNCs) like Uber and Lyft have faced scrutiny over whether they worsen traffic and how they treat their drivers, who are considered independent contractors and are therefore not covered by the protections afforded to traditional employees.
Previously released records showed Durkan’s office had drafted the tax proposal, framing it as a way to address congestion and raise money for housing and transportation projects. Driver-focused legislation could deal with pay, benefits, ways to appeal sudden deactivations on the app or other issues.
Both companies said Monday they would support setting minimum “earnings” for drivers, but did not discuss specifics about likely sticking points like how much those earnings would be or exactly how they would account for expenses borne by drivers.
Adding new labor regulations for drivers here would follow widely watched legislation passed by California lawmakers that could make it harder for the companies to classify drivers as independent contractors. The Seattle City Council in 2015 voted to give drivers the ability to unionize. That law has been tied up in legal challenges and the City Council later removed pay from the items drivers could negotiate over.
In letters Monday, Lyft warned a new tax on TNC rides “penalizes the very groups you are seeking to help,” while Durkan’s office emphasized Lyft’s business success.
“There’s no doubt that Lyft’s explosive growth has helped enrich many, and has helped create opportunity for many communities throughout our region,” wrote Durkan Chief of Staff Stephanie Formas. “But the fact remains that some drivers are in fact not receiving minimum compensation, especially after expenses, and that this growth has had an impact on Seattle communities.”
Uber and Lyft last year gave 24 million rides in Seattle, half starting or ending downtown, according to the Mayor’s Office.
The city is considering several proposals in addition to the tax, Formas wrote, including “ensuring rideshare drivers providing services in Seattle make minimum wage plus compensation for reasonable expenses incurred that benefit your company,” giving drivers access to benefits and addressing deactivations.
“Cities like Seattle are becoming the new safety net, so we must ensure adequate wages and benefits for all workers,” Formas wrote.
Presentations prepared by city staff show they expected to release the tax and “driver rights” legislation to the public several months ago. An April presentation laid out a timeline that expected “Launch Week!!” in late May and a City Council vote in August. The Seattle Times received the documents in response to a public records request. The city redacted details about the legislation citing an exemption in state law for policies still under consideration.
Councilmember Teresa Mosqueda, who chairs the council’s Housing, Health, Energy & Workers’ Rights Committee, said Friday she did not know details about the proposal coming from Durkan’s office. To pass legislation by the end of the year, the council would need to see a proposal “in the next week or two” and consider it at the same time as the 2020 budget, Mosqueda said.
Any congestion fee adopted for hailed rides should be accompanied by a provision ensuring that ride-hail drivers are “made whole” for money lost to the policy, Mosqueda said. In addition, the city should at the same time seek to provide drivers with benefits and protect their accounts from being arbitrarily shut off by ride-hailing apps, she said.
Formas’s letter came in response to a letter from Lyft Director of Public Policy Prashanthi Rao Raman, which noted “several weeks of dialogue with your office.” Lyft would support a “driver earnings guarantee” that would “ensure all Seattle drivers earn above Seattle’s $16 local minimum wage plus expense reimbursement,” the letter said.
Uber spokesman Nathan Hambley said in a statement the company supports “a guaranteed minimum earnings standard for drivers,” but did not specify a number.
Drive Forward, a driver group founded in part by Uber, told Durkan in its own letter Friday it would support a “minimum hourly guarantee of $27.50/hr.” The group opposes using money from a TNC tax for “any purpose other than to benefit TNC drivers or to administer programs that directly benefit drivers,” specifically citing transit and affordable housing as uses they oppose.
Teamsters Local 117, the union that has attempted to organize app-based drivers, did not respond to requests for comment.
Seattle wouldn’t be the first city to pass a tax on Uber and Lyft rides or attempt to address inconsistent driver pay. New York, Washington, D.C., and other cities have passed similar fees. Seattle already charges fees of 14 cents per trip to cover the cost of TNC licensing and 10 cents per trip to support taxi wheelchair accessibility.