Seattle mayor signs minimum wage law for Uber and Lyft drivers in first-ever virtual bill signing

Seattle Mayor Jenny Durkan (top row) signs a bill to enact a new minimum wage standard for Uber and Lyft drivers, with some applauding on the video call. It was the city’s first-ever virtual bill signing conducted over video conferencing. (GeekWire screenshot)

Seattle officially established a minimum wage standard for Uber and Lyft drivers on Thursday as Mayor Jenny Durkan signed the new legislation into law.

The bill, passed unanimously by the City Council last month, is designed to ensure Uber and Lyft drivers earn the city’s $16.39 per hour minimum wage.

The new law requires transportation network companies (TNCs) to pay drivers at least $0.56 per minute when there is a passenger in the vehicle as well as a per-mile rate to cover expenses. The city says that standard will ensure drivers earn at least Seattle’s minimum wage, assuming they spend about 50% of their time waiting for rides or driving to pick up passengers. The minimum compensation standard takes effect on Jan. 1.

Previously: Debate over Uber and Lyft driver pay comes to a head as Seattle prepares to set minimum wage

The legislation is part of Durkan’s “Fare Share” program introduced in September, which increased a tax on each Uber and Lyft ride this past November. It is the latest in a series of city ordinances targeting the gig economy.

Durkan said Thursday that the pandemic has shown a greater need to protect gig workers with fair compensation standards.

“This bill really is the work of hundreds of people throughout our region over a period of years, fighting for fair pay and fair treatment,” Durkan said on a video call.

This was the city’s first time signing a bill virtually, given the ongoing pandemic and social distancing mandates.

The legislation is modeled after a minimum wage standard New York City passed in 2018. Seattle hired two researchers who advised New York City officials on their legislation to recommend a minimum wage standard when crafting its own ordinance. Uber and Lyft backed a separate study by Cornell researchers that produced significantly different findings. The competing studies highlight the complexities of establishing a minimum wage for gig workers.

(Bigstock Photo)

Durkan said the city expects that 84% of drivers will see earnings go up, with an average wage increase of about 30%. She said a majority of drivers come from low-income families and communities of color.

“By requiring Uber and Lyft to pay drivers a fair wage, we will help build economic resilience of many of our immigrant and refugee community members, and will lift up workers who too long have been marginalized,” the mayor said.

Durkan acknowledged that companies such as Uber and Lyft have taken a financial hit due to the pandemic and economic crisis. “Signing this new wage standard isn’t going backwards; it will not make economic recovery harder,” she said. “In fact, it will do just the opposite.”

Uber and Lyft have long opposed Seattle’s legislation. The companies point to New York as a cautionary tale for Seattle. Increased prices and reduced ride activity in New York followed the passage of the legislation. The apps now restrict the number of New York drivers who can work at a time, leading some drivers to sleep in their cars so that they don’t miss a chance to log-on, Vice reported.

Uber previously said that if it raises prices by 30% in Seattle, it could see a decrease in trips of around 20%.

In a letter sent to the council last month, Uber said “the real harm here will not be to Uber … it is the drivers who cannot work and community members unable to complete essential travel that stand to lose because of the ordinance in front of you.”

In a statement issued ahead of the vote last month, Lyft warned the minimum wage will cost jobs in Seattle.

“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,” the company said.

Uber and Lyft are also embroiled in a legal battle in California over a law that seeks to force the companies to classify their drivers as employees.

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