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Seattle mayor proposes higher fees for Uber/Lyft rides to raise money for transit, housing

A tax on Uber and Lyft could set Seattle up for a showdown in the days ahead. (Justin Sullivan/Getty Images)

Seattle Mayor Jenny Durkan is preparing to announce a large proposal to mandate a minimum wage for ride-share drivers while also using higher fees per ride to fund transit and housing projects. As part of the “Fair Share” proposal being announced Thursday, the city will immediately launch an independent study to create a model to make sure ride-share drivers receive a minimum wage. Ride-share companies would be required to cover additional costs drivers face, as well as time between accepting a fare and picking up the passenger.

“The city currently has no insight into the wage structure for drivers. Companies have not provided that information to us,” shared Deputy Mayor Shefali Ranganathan. As independent contractors, ride-share drivers incur a host of expenses including taxes, insurance and gas, which can cut into the pay they currently receive.

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“Everyone has stated they believe in the same goal: They want drivers to be paid fairly and to earn at least a minimum wage. The difference is how people calculate that has been greatly varied. This study will put that to rest,” said Durkan.

In addition to the wage mandate, the mayor’s proposal would also increase the per-ride fee for ride-shares to $0.75. That’s an increase of $0.51. The current $0.24 fee funds wheelchair-accessible taxis and regulation of the industry. The increased fee would be applied to any ride that originates or ends within the Seattle city limits.

The money raised would go toward three areas:

  • $56 million to cover the funding gap for the City Center Connector Streetcar project
  • $52 million toward building affordable housing near transit
  • $17.75million for protections for ride-share drivers

Those worker protections include creating an independent Driver Resolution Center. The city will conduct a search for a nonprofit organization to help represent drivers in arbitration of disputes, including when drivers are deactivated.

Despite ongoing negotiations with city leaders, ride-share companies are not yet ready to fully support the proposals in their current form.

Lyft released this statement:

“While Lyft fully supports a minimum earnings guarantee for drivers, the Mayor’s regressive tax proposal for riders will hurt the underserved communities that rely on affordable ride-share most. Fifty-one percent of Seattle Lyft rides start or end in low-income areas, and the Mayor’s regressive tax would increase the fees they already pay by 300 percent, making it the most taxed ride-share city in the country. Drivers will also lose, as their earnings decrease with fewer overall rides. Instead, the Mayor should utilize the surplus the City already has under the current fee structure and combine it with a more equitable and effective approach, comprehensive congestion pricing, in order to fund her larger transportation and affordable housing goals.”

Uber provided its own response:

“The Mayor’s decision to triple Seattle’s tax on ride-sharing will raise prices for riders and decrease trips for drivers. We support the creation of a guaranteed minimum earnings standard for drivers, and have engaged in good faith with the Mayor’s office and labor leaders for several months on this issue in hopes of reaching a compromise. We believe that any ride-share proposals should be developed based on broad input from the entire ride-share driver community in Seattle.”

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Ride-share companies point to a reported decrease in ridership after New York City enacted its $2.75 per-ride fee earlier this year. Lyft is one of two companies currently suing the city over the fee. Drive Seattle Forward, which represents some ride-share drivers, conducted its own analysis, claiming drivers will lose more than $98 million in revenue over the next five years if the fee is enacted.

According to Durkan, the independent study and public outreach are scheduled to be completed by March 2020, providing the information needed to enact the minimum compensation plan and increased fee by July 1.

KIRO 7 will be at Thursday’s announcement and push city leaders for answers about how they plan to address concerns raised by drivers and ride-share companies.

By Nathan Wilson, KIRO 7 TV

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