Uber and Lyft drivers would be paid for time spent waiting for rides and expenses like wear and tear on their vehicles under a new pay scheme proposed Thursday by Mayor Jenny Durkan.
The proposal is meant to guarantee drivers on ride-hailing apps make Seattle’s $16.39 minimum wage, a complex prospect in an industry where workers are considered independent contractors, rather than employees, and pay can vary widely.
Last year, Durkan and the City Council agreed drivers should make the minimum wage, but specifics were murky. The mayor offered some details Thursday, though she has yet to release the legislation she plans to send to the council.
In one key change, Durkan’s proposal attempts to pay drivers not only for the time they are driving passengers to their destination, but also for the time they spend waiting for rides and driving to pick up passengers. The mayor’s office also wants to cover a broad range of driver expenses, like vehicle maintenance, vehicle and health insurance, cell phone plans and taxes.
“We want to make sure the companies who benefit from those expenses give drivers a return,” Durkan said.
Durkan proposes requiring that Uber and Lyft pay drivers 56 cents per minute and $1.17 per mile, a rate based on a city-commissioned study of the industry, which Uber and Lyft have strongly criticized. Today, rates range from about 18 to 20 cents a minute and about $1.10 to $1.18 a mile, according to the mayor’s office. Lyft also offers a base fare of $1.07 and minimum fare of $2.63, the company said.
Although pay would still be based on the time passengers are in a driver’s vehicle, the higher rates are meant to cover time drivers are awaiting rides, too, Durkan’s office says. The rates would be adjusted each year.
Drivers’ organizations were split on the proposal Thursday, with some saying the plan will ensure fairness for a workforce that is exposed to the public during the pandemic and includes many immigrants and people of color. Others worry new regulations could lead the companies to restrict when drivers work on the app, as has happened under new rules in New York City.
Peter Kuel, president of a drivers group affiliated with the Teamsters Local 117 union, described the companies’ warnings as scare tactics.
“We are the ones driving. We are the ones buying our car. We are the one repairing our car. We are the ones paying our insurance,” Kuel said.
Michael Wolfe, executive director of the driver group Drive Forward, which has received funding from the ride-hailing companies, warned riders could see fare increases or drivers could see the companies clamp down on how much work they can get on the apps.
“Limiting access to a source of income when there’s a recession is really just not good policy,” Wolfe said.
According to the mayor’s office, a trip from Capitol Hill to downtown that would earn a driver about $5 under the current structure would pay about $8 under the new rules. A trip from downtown to the airport would pay about $31, compared to $26. (The sample earnings were calculated based on pre-pandemic traffic.)
Driver Fana Abreha said she and her husband drive for Uber, together working 60 to 80 hours a week. “We don’t have other family time or time to spend with our kids as a family,” Abreha said during a news conference Thursday.
Lyft spokesperson CJ Macklin called Durkan’s plan “unworkable,” saying it could “destroy jobs for thousands of people.” Uber spokesperson Harry Hartfield said Durkan’s proposal “will not help achieve our shared goals in Seattle.”
Durkan’s office argues companies could instead lower the commissions they take from drivers to afford the new rates.
What drivers for apps like Uber and Lyft actually make today is hotly debated.
Ahead of the proposal, the city and the apps released dueling studies about driver pay last month, painting dramatically different pictures.
A city-commissioned study by researchers from the University of California, Berkeley, and The New School used a driver survey and some summary data from the apps to conclude that Seattle drivers make about $21.50 an hour before expenses and $9.73 after. An industry-funded study by a team of Cornell researchers used data from the companies and found the median driver made about $23 an hour after expenses.
The gap boils down to different data and different methods for calculating hours worked and driver expenses. For example, there were major differences in what each side considered reasonable expenses.
As Durkan prepares to send the plan to the council, Uber and Lyft can weigh in on some technical details, but “the pay standard and eligible expenses are not open to negotiation,” said Durkan spokesperson Chelsea Kellogg.
Last year, when Durkan and the council began proposing a new pay structure, they also passed a new fee on Uber and Lyft rides. The fee was set to take effect last month and fund affordable housing, a dispute resolution center for drivers and other projects. But because the coronavirus pandemic has depressed ridership on the apps, neither will end up paying the fee this year.