Durkan proposes tax hike on rideshare, minimum wage for Uber, Lyft drivers

SEATTLE -- Uber and Lyft riders would pay more for their rides in Seattle starting next year, and rideshare drivers would be guaranteed a minimum wage under a new proposal from Mayor Jenny Durkan.

Durkan said her proposal would make Uber and Lyft pay their drivers a guaranteed minimum wage, something both companies have avoided because drivers are independent contractors not subject to city policy.

As a result, the average rideshare driver makes less than $11 an hour, according to information from the Economic Policy Institute provided by Durkan's office.

If approved, Uber and Lyft would have to comply with the city's $16 an hour minimum wage for large companies. The proposal would also force Uber and Lyft to offer paid sick time and unemployment insurance.

Durkan is also proposing a tax hike on each Uber or Lyft ride, charging riders 75 cents per ride instead of the current 24 cents.

The money raised by the new tax would pay for the following, according to Durkan's office:

  • $52 million for affordable housing near transit
  • $56 million to fully fund the Center City Connector streetcar
  • $17.75 million to create a Driver Resolution Center for Uber and Lyft drivers.

"This proposal is about ensuring Seattle grows into the city we want to be," Durkan said. "Being a city of the future isn't just about the incredible gains of the new economy. It's about being a city where all our workers are treated fairly, our communities can afford to live where they work, and everyone, regardless of income or ability level, has access to high-quality transit."

If passed, the changes would take effect July 1, 2020, but if responses from Uber and Lyft are any indication, the new plan won't come to fruition without a fight. Company representatives called the tax proposal regressive and unfair to drivers.

“The Mayor’s decision to triple Seattle’s tax on ridesharing will raise prices for riders and decrease trips for drivers. We support the creation of a guaranteed minimum earnings standard for drivers, and have engaged in good faith with the Mayor’s office and labor leaders for several months on this issue in hopes of reaching a compromise. We believe that any rideshare proposals should be developed based on broad input from the entire rideshare driver community in Seattle," said Nathan Hambley, a regional Uber spokesman.

Here's what Lyft had to say:

“While Lyft fully supports a minimum earnings guarantee for drivers, the Mayor’s regressive tax proposal for riders will hurt the underserved communities that rely on affordable rideshare most. Fifty-one percent of Seattle Lyft rides start or end in low-income areas, and the Mayor’s regressive tax would increase the fees they already pay by 300 percent, making it the most taxed rideshare city in the country. Drivers will also lose, as their earnings decrease with fewer overall rides. Instead, the Mayor should utilize the surplus the City already has under the current fee structure and combine it with a more equitable and effective approach, comprehensive congestion pricing, in order to fund her larger transportation and affordable housing goals.”

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