In 2018, New York introduced a new law that made companies such as Lyft and Uber pay at least minimum wages to their drivers. Fast forward to 2020 in Seattle, and it’s déjà vu for Uber and Lyft. Now, the Seattle City Council has introduced a similar law.
Starting on January 1, 2021, Uber, Lyft, and other transportation companies will need to comply with the new law. They will have to pay their drivers at least $16.39 per hour. That comes down to a minimum of $1.33 per mile driven or 0.56 cents per minute.
Furthermore, the new bill states transport companies must send all tips to the drivers and that tips can’t be part of the formula that determines the minimum wage. The transport companies also need to reimburse drivers for masks and other protective equipment used during the coronavirus pandemic.
In light of the new law, both Uber and Lyft didn’t spare any words to express their disappointment, claiming that this will have a very negative effect on the drivers, their rates will skyrocket, and so on.
To back their law, the city of Seattle even commissioned two renowned economists to determine the average earnings of Uber and Lyft drivers. At the same time, both Uber and Lyft commissioned studies conducted by Cornell researchers.
Lisa Herbold, a council member in Seattle, revealed that the city plans to extend the minimum wage requirement to other gig workers. She pointed to drivers of meals and drivers of packages that also might get covered by a similar law.
Herbold also stated that the legislation corrects the unfair low prices driven by companies such as Lyft and Uber. According to Herbold, transportation companies managed to drive down transportation rates by flooding the market with drivers.