Uber will charge customers about 25% more for each trip starting Jan. 1 as Seattle’s new minimum wage law for drivers exposed to hail goes into effect.
By April 1, tariffs could rise 50% from today’s prices as driver compensation comes in in full, said Harry Hartfield, a spokesman for Uber.
The new wage requirements, unanimously passed by the Seattle City Council this fall, are designed to keep compensation for Uber and Lyft drivers at the level of other workers in the city who will earn at least the minimum wage of $ 16.69 from next year .
Lyft hasn’t announced an immediate price hike, but it may do so in the future, said CJ Macklin, a company spokesman.
As hail-fighting firms like Uber and Lyft have grown in recent years, Seattle has sought to improve its traffic impact and improve conditions for drivers, many of whom are from color communities and not fluent in English.
And as the coronavirus pandemic continued to rage, drivers who are more exposed to the virus have been trapped between non-cooperative businesses, a fragile state unemployment system and language barriers while facing meager earnings during the pandemic with no basic worker protection.
Tech companies classify drivers as independent contractors rather than employees – a distinction that has exacerbated some of these problems.
“For drivers who have seen nothing but wage cuts as the cost of living in Seattle has increased over the years,” the legislation is “a big win and a big step in the right direction,” said Will Pittz, a spokesman for Teamsters 117 who supported the legislation. “This is important for drivers trying to put food on the table and pay rent.”
Even before the pandemic, some drivers said they didn’t earn a living wage when they factor in costs like gasoline, vehicle maintenance, and cell phone service plans for an app-based job. Competing studies with different methods have shown very different average earnings.
Ahmed Mahamud, 46, a Federal Way Uber driver, said he was looking forward to the wage increases as he and his wife, who works part-time, are responsible for nine children.
“I think this will help my family live,” said Mahamud.
Commissioned researchers from the New School and the University of California, Berkeley, in a city study, found that drivers are making about $ 9.73 an hour based on effort.
However, Uber points to a study by Cornell University’s Industry Labor Relations School that found the median driver made about $ 23 an hour based on effort. This study uses a different definition of working time and assumes, among other things, different assumptions about driver costs.
Uber blamed the city council for its decision to raise prices, saying there are “advanced ways to provide income protection for drivers” without harming those in Seattle who depend on hail shipping.
“We know that any price increase is frustrating for customers, and we continue to look for new ways to bring prices down while complying with city council laws,” said Hartfield.
While travel was more restricted during the coronavirus pandemic, drivers are likely to notice a difference.
For example, a ride from the University of Washington Husky Stadium to SeaTac International Airport, which now costs an average of $ 40.95, will rise to $ 51.99 with no additional fees. The average fare from Rainier Beach to Downtown is between $ 26 and $ 33.
A spokeswoman for Mayor Jenny Durkan, who proposed the wage increase, defended the new benefits for drivers, many of whom are immigrants, refugees and blacks.
As Uber decides to raise its prices, the Mayor believes Seattle “needs to set a fair minimum wage standard to create a living wage and to create critical benefits and basic worker protection for Uber and Lyft drivers, one of whom.” many have decimated their livelihoods by the COVID-19 pandemic and resulting economic downturn, ”Kelsey Nyland said.
Under the new rules, drivers will receive a gross hourly wage of approximately USD 30.30 per hour before costs. The legislation provides for new mileage and minute rates for drivers who carry passengers. These should be high enough to offset work-related costs, the waiting time for journeys and the travel time for collecting passengers.
For short trips and cancellations, drivers must pay a minimum of USD 5.
Companies must also tip all drivers and either provide or reimburse them with an “appropriate amount” of personal protective equipment and disinfectants.
Uber’s price hike will also account for the city-mandated paid sick time for gig workers, Hartfield said.
Seattle city council voted this summer to require companies like Uber and Lyft, as well as delivery services like DoorDash and Postmates, to offer paid sick leave until the city’s declared coronavirus emergency ends.
Seattle workers are entitled to five sick days of employment and one sick day for every 30 working days thereafter. The amount that each employee receives on a paid day of sickness depends on the average daily income of the driver in his best-paid month since October 2019.
Uber also raised concerns about the move, saying at the time that the emergency measures would “single out a sector with no meaningful contribution from the public or affected groups”.
Rachel Lauter, executive director of Working Washington, an employment agency organization, said it made no sense for Uber to alienate customers by raising prices “despite the need to raise wages for workers.”
“Increasing wages for gig workers is very popular and urgently needed – especially in times of economic change and extreme income inequality,” she said.