Council advances minimum wage ordinance for Uber,Lyft drivers out of committee

This afternoon, the City Council’s Finance and Housing Committee voted out of committee the “Fair Share” ordinance establishing a minimum compensation rate for Uber and Lyft drivers in Seattle.


For reference, here is my article from July where I dove into all the policy issues with the bill — and the ways in which stakeholders skew studies to support their policy objectives.

The bill received some last-minute amendments intended to address lingering criticisms and weaknesses. Among the substantive changes:

  • It increases the “per mile” rate to allow for 30 minutes a day for cleaning (for a full-time driver equivalent), and a ten-minute paid rest break for every four hours of work.
  • It sets a minimum compensation at $5 per trip, including for trips cancelled by the passenger. The original bill required TNCs to pass cancellation fees on to the driver in full; that requirement has been dropped in favor of this minimum compensation. However, it does not apply to trips cancelled by the driver, nor to trips refunded to the passenger because of driver misconduct. There is some concern that this will discourage the TNCs from booking short trips, which might have a disparate impact on individuals with disabilities who rely on Uber and Lyft for basic mobility.
  • It addresses concerns that the controversial “utilization rate” component may not be adjusted for the first three years, in an attempt to avoid creating an incentive for TNCs to limit the number of drivers allowed at any given time. This is a bit complicated: drivers are only paid for “P3” time when they are actually transporting passengers, but the rate of compensation was calculated based upon a “utilization rate” that captures the average amount of time spent in “P1” waiting to be dispatched and in “P2” driving to a pick-up location. If the utilization rate is re-calculated frequently, then it encourages TNCs to reduce P1 and P2 time by limiting the number of drivers — at the expense of part-time drivers. But with the utilization rate a fixed constant for the next three years, it makes no difference how many drivers are on the platform — reducing the number won’t save the companies any money.  The three-year delay before the first adjustment also bridges the economic uncertainty from the COVID-19 recession, and hopefully will provide enough time for the industry to find a “new normal.” The amended bill also specifies that the first assessment period for recalculating the utilization rate must be twelve months long to ensure it accurately captures seasonal variations. This isn’t a perfect solution to the concerns raised about the utilization rate and its effect on part-time drivers, but it’s a short-term bandage that pushes the problem over the horizon.
  • It requires additional transparency for the TNCs. Drivers must be given notice of passenger fares for each trip, as well as weekly notice of total passenger fares for the prior week. Passengers must be told the compensation to the driver, with tips separately itemized.
  • It transfers the responsibility for conducting a study on the impacts of the ordinance from the City Auditor to the Office of Labor Standards, makes the study a request rather than mandatory, and asks for the study to encompass the first two years (and to be delivered by the end of year 3).

The bill passed out of committee unanimously, approved by committee members Mosqueda, Gonzalez, Lewis, Herbold and Strauss.  It will come up for final approval by the full City Council on Tuesday afternoon.


I hope you found this article valuable. If you did, please take a moment to make a contribution to support my ongoing work. Thanks!