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Uber Raises Prices in Response to New Seattle Law

Published on Dec 31, 2020 at 7:54 am in News.

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In response to Seattle’s new minimum wage law for rideshare drivers, Uber plans to charge customers 25 percent more on each trip beginning January 1. By April 1, passengers could see fares increase by as much as 50 percent compared to today’s prices, as the compensation for drivers fully phases in. At this time, Lyft has not announced an immediate price increase, but they could do so in the future.

The new wage requirements were unanimously approved by the Seattle City Council in the fall. The goal is to keep compensation for Uber and Lyft drivers on par with workers in the city who will earn at least the $16.69 minimum wage.

As Uber and Lyft have grown, Seattle has sought to level their impact on traffic and improve conditions for drivers—many of whom do not speak English fluently and come from communities of color. The COVID-19 pandemic has also had an impact on the rideshare sector, with drivers being more exposed to the virus and having to deal with a fragile state unemployment system while facing a drop in earnings without the basic worker protections that employees have.

According to Will Pittz, a spokesperson for Teamster 117, the new minimum wage for rideshare drivers is a step in the right direction: “For drivers who have seen nothing by pay cuts as the cost of living in Seattle has gone up over the years, [the legislation is] a big victory and a big step in the right direction. This is important for drivers who are trying to put food on the table and pay rent.”

Under the new rules, it’s estimated that drivers will earn a gross hourly pay of about $30.30 per hour, before expenses. The legislation will set new per-mile and per-minute rates for drivers while they are transporting passengers. Those rates are meant to be high enough to compensation for job-related expenses, time spent waiting for rides, and time driving to pick up passengers.

A spokesperson from Mayor Jenny Durkan’s office said the mayor believes Seattle “must set a fair wage floor standard to create a living wage and add critical benefits and basic worker protections for Uber and Lyft drivers, many of whom have seen their livelihoods decimated by the CVODi-19 pandemic and resulting economic downturn.”

For more information on the latest rideshare industry news, click here to visit the Rideshare Law Group blog.