Seattle becomes 2nd U.S. city to guarantee Lyft and Uber drivers a minimum wage

Seattle becomes 2nd U.S. city to guarantee Lyft and Uber drivers a minimum wage

Seattle joined NYC as the second city in the Unites States to guarantee Lyft and Uber drivers a minimum wage.

The Seattle City Council unanimously passed a city ordinance Tuesday to pay drivers on ride-hailing platforms such as Lyft and Uber a minimum hourly wage of $16.39 after expenses. ($28.19 is the upfront rate.) In 2018, New York City became the first U.S. city to guarantee ride-hail drivers a minimum wage, which is $17.22 after expenses.

The Seattle minimum wage is supposed to fairly compensate drivers for both time and miles spent working, even if there isn't always a passenger in the car. It also accounts for breaks, refueling time, time cleaning between rides, and other work stoppages that currently go unpaid.

It also lines up with Seattle's minimum wage requirements for employers with more than 500 employees. Lyft and Uber consider drivers independent contractors, not employees — an idea the companies are vehemently defending in California with Prop. 22.

The new pay rate for Seattle drivers will go into effect at the start of 2021.

Lyft claimed the plan is "deeply flawed and will actually destroy jobs for thousands of people." Lyft driver Beverly Waters said the legislation "will force rideshare companies to impose and manage who is on the road in order to pay for all time a driver is simply logged on to the app."

Meanwhile, labor groups representing drivers praised Seattle for giving gig workers a guaranteed wage.

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In a letter sent to the city council in September, Uber claimed that in "New York City, the same policy that is before you has led to fewer work opportunities for drivers and higher prices for riders."

But back in 2018, many driver groups in NYC celebrated the living wage.

Uber claimed in its letter that the additional tracking needed to ensure drivers make the minimum wage will create privacy concerns. Of course, Uber had its own privacy failures over the years.

Back in August, a Cornell University study found Seattle ride-hail drivers earn more than $23 per hour after expenses. But the study was criticized for not accounting for driver wait time between fares. Under those assumptions the hourly rate dropped to $17.40.

The city's own research this year from James Parrott and Michael Reich (who both shaped the NYC plan) found that drivers only made $9.73 an hour after $11.80 per hour of expenses.

The researchers from the New School and UC Berkeley found 84 percent of drivers earned below Seattle's minimum wage.