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Seattle Passes Minimal Pay Fee for Uber and Lyft Drivers

The Seattle Metropolis Council authorized a minimal pay customary for Uber and Lyft drivers on Tuesday, turning into the second metropolis within the nation to take action.

Beneath the regulation, efficient in January, ride-hailing corporations should pay a sum roughly equal, after bills, to the town’s $16 minimal hourly wage for companies with greater than 500 staff.

“The pandemic has uncovered the fault strains in our techniques of employee protections, leaving many frontline employees like gig employees with out a security web,” Mayor Jenny Durkan stated in an announcement.

Seattle’s regulation, handed in a 9-to-Zero vote, is a part of a wave of makes an attempt by cities and states to manage gig-economy transportation providers. It’s modeled on a measure that New York Metropolis handed in 2018. Final yr, California authorized laws successfully requiring Uber and Lyft to classify drivers as staff quite than unbiased contractors, which might guarantee them of protections like a minimal wage, time beyond regulation pay, employees’ compensation and unemployment insurance coverage. The businesses are backing an initiative on the November poll that will exempt their drivers from the California regulation.

Uber and Lyft have acquired extra favorable therapy from federal regulators. Final week, the Labor Division proposed a rule that will most likely classify their drivers as contractors, although it might not override state legal guidelines like California’s.

As in New York, the Seattle regulation will create a system for minimal compensation for every journey — a mix of per-minute and per-mile charges which are “scaled up” by what is called the utilization price, or the fraction of every hour throughout which drivers have a passenger of their automotive. The concept is decrease utilization price ought to correspond to a better per-minute and per-mile price, to compensate drivers for being much less busy.

The system is meant to provide hourly pay of slightly below $30 earlier than bills and to encourage the businesses to maintain their drivers busier quite than flood the market with automobiles to cut back passengers’ waits.

A Lyft spokesman, CJ Macklin, stated, “The town’s plan is deeply flawed and can truly destroy jobs for 1000’s of individuals — as many as four,000 drivers on Lyft alone — and drive ride-share corporations out of Seattle.”

Uber declined to remark, however stated in a latest letter to the Seattle Metropolis Council that New York’s coverage had resulted in fewer rides and better costs for passengers, and that it had led the corporate to limit the variety of drivers on the platform directly.

Michael Reich, a labor economist on the College of California, Berkeley, who was an architect of the New York measure and suggested Seattle on its new regulation, stated that common driver pay had elevated in New York and that total income had risen sufficient to offset the drop in demand due to increased fares.

The expansion in rides slowed after the coverage went into impact, Mr. Reich stated, however added that this was largely for causes unrelated to the coverage.

Past the pay customary, the Seattle measure stipulates that the businesses should hand over all tricks to drivers, that the guidelines can’t depend towards the minimal and that the businesses should present protecting tools like masks to drivers or reimburse them for these prices.

A broader program proposed by Ms. Durkan, Fare Share, was authorized final fall. The agenda included a tax on Uber and Lyft of 51 cents a journey, a part of which has helped fund a streetcar venture downtown and supply help for drivers, together with assist with appeals if they’re faraway from both platform.

The Fare Share measure required the town to set a minimal pay customary for ride-hailing drivers, however mandated a examine to find out the quantity.

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