Seattle becomes second city after NYC to order Uber and Lyft to pay drivers a minimum hourly wage - as ride share firms argue they'll be forced to cut number of their cars on the road
The Seattle City Council has passed a minimum pay standard for drivers working for ride share companies Uber and Lyft.
Under the ordinance, which will come into effect next January, drivers will now earn at least $16.39 per hour - the minimum wage in Seattle for companies with more than 500 employees.
Seattle's law, modeled after a similar regulation in New York City, was proposed by Mayor Jenny Durkan. City officials argue it will stop Uber and Lyft from oversaturating the market.
At present, the companies like to have ample drivers on the road at all times so that users can be picked up quickly when they request a ride.
But city officials are concerned that means drivers are cruising aimlessly for long periods of time without being paid. Given the high cost of living in Seattle, legislators believe many drivers may be struggling to make ends meet.
The Seattle City Council has passed a minimum pay standard of $16.39 for drivers working for ride share companies Uber and Lyft.
Researchers at the University of California, Berkeley and New York's New School analyzed the Seattle ride-hailing market using city data and a driver survey. They found drivers net only about $9.70 an hour, with a third of all drivers working more than 32 hours per week.
But Uber and Lyft say most drivers in Seattle only work part-time. Many have other employment and are simply looking to supplement their income.
They have fiercely opposed the legislation, saying they will ultimately have to block drivers from accessing the app, lowering the number of cars they have out on the road.
Lyft blasted Seattle's decision in in a statement shared with Reuters on Wednesday.
'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 rideshare companies out of Seattle,' a company spokesperson said.
Uber has not yet made comment.
Lyft says it's not feasible to pay the current number of drivers a $16.39 hourly wage. The move will result in some drivers being blocked from the app, so they will make no money at all
In late 2018, New York City become the first city in the US to set minimum pay requirements for rideshare drivers.
The New York City Taxi and Limousine Commission ordered the companies to pay drivers a minimum wage of $17.22 an hour.
Lyft filed a lawsuit against the NYC TLC, saying that the mandate was 'anti-competitive'. A judge threw out the suit.
The minimum wage legislation resulted in the companies blocking some drivers from the app when there were too many other cars on the road.
The Seattle ordinance will come into effect next January