Seattle introduces minimum wages for Uber and Lyft drivers: why it's bad for them

Seattle, Washington, became the second largest city in the country to set the minimum wage standard for Uber and Lyft drivers. Writes about it CNN.

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Seattle City Council voted unanimously to pass new rules aimed at ensuring that Uber and Lyft drivers receive a minimum wage of $ 16,39 an hour.

The new law requires transportation companies to pay drivers at least $ 0,56 per minute when a passenger is in the vehicle, as well as pay per mile to cover costs.

The City says the standard guarantees that drivers will receive at least the minimum wage in Seattle, assuming they spend about 50% of their time waiting for a ride or driving to pick up passengers. The rule takes effect on January 1st.

The law is based on New York's 2018 minimum wage standard, although council chairman Teresa Mosqueda said there was nothing to do with it. Seattle hired two researchers who advised the authorities to make the minimum wage standard similar to New York. Uber and Lyft supported a separate study, the results of which were significantly different. They highlight the difficulty of setting minimum wages for the giants' contractors.

Uber and Lyft have long said New York should serve as a warning to Seattle. Since the passage of the law, New York has experienced a rise in prices and a decline in travel. The app now limits the number of drivers in New York who can work at the same time, which causes some drivers to sleep in their cars to avoid missing out on the opportunity to log in.

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“We're asking the city not to pass this law and to go back to research rather than copying failed systems from other cities,” Michael Wolfe, director of the Uber-backed group Drive Forward, said during public comment before the hearing.

But minimum wage proponents such as Teamsters 117 and its affiliated Drivers Union say it's a necessary protection for drivers.

“We are living our values ​​of empowering every worker in this city to take action,” Mosqueda said.

The minimum wage is part of Seattle Mayor Jenny Durcan's Fare Share program, introduced in September, which increased the tax on each Uber and Lyft ride last November. This is the latest in a series of city decrees aimed at economics.

“Seattle is once again leading the nation in ensuring fair pay for Uber and Lyft drivers,” said Peter Kuehl, an Uber and Lyft driver since 2013 and president of the Teamsters Union. “Historic victories like this should inspire all workers across the country about what can be done by joining together as a union to demand fair treatment.”

In June, the Seattle City Council unanimously approved a law that requires food delivery companies to pay drivers $ 2,50 for delivery above normal rates to offset the costs and risks drivers face during the pandemic. A few months earlier, the US Chamber of Commerce, Uber and the City of Seattle agreed to move away from a lengthy and difficult legal battle over a law allowing drivers to unionize.

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Councilor Lisa Herbold proposed extending the minimum wage to other types of work concerts during Tuesday's hearing.

“We will not allow this to happen to contractors in our city,” she said. “I hope that in the future we can work on similar legislation for other drivers... such as package delivery drivers and food delivery drivers.”

Herbold said the legislation is fixing the artificially low prices at which Uber and Lyft are offering their services.

“Flooding the market with drivers reduces costs for the buyer, but it comes at the expense of the workers,” she said. “This is very similar to other businesses where the costs of providing services are passed on to workers in the form of reduced earnings and lack of benefits.”

In a statement released ahead of the vote, Lyft warned that the minimum wage will cost Seattle jobs.

“The city’s plan is deeply flawed and will effectively destroy jobs for thousands of people—up to 4 drivers for Lyft alone—and drive ride-sharing companies out of Seattle,” the company said.

When asked about the vote, Uber referred to a letter the company sent to the city council earlier this month.

“Uber may have to make changes in Seattle because of this new law, but the real harm here will not be for Uber, but for drivers who will not be able to work,” the company said.

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