UPDATED, Nov. 26, 2019: The Seattle City Council unanimously approved Mayor Jenny Durkan’s "Fare Share" plan for ride-hailing drivers on Monday.

The plan mandates a minimum wage for ride-hailing drivers and compensation for benefits and expenses. It also institutes a 51-cent fare increase to pay for housing and transit improvements, as well as a Driver Resolution Center. The mandate is expected to go into effect next summer once a study on an appropriate minimum wage is complete.

In a statement, Durkan said the plan "makes sure our hard-fought worker protections are available for our Uber and Lyft drivers, who work long hours to help all of us get where we need to go."

Dive Brief:

• Seattle Mayor Jenny Durkan proposed on Thursday "Fare Share" legislation, mandating ride-hailing drivers be paid a minimum wage and be compensated for benefits and expenses, starting July 1, 2020. The city would commission a study to determine the level of that wage and any other benefits.
• Durkan also proposed establishing the country's first Driver Resolution Center, which would give Uber and Lyft drivers independent representation in settling unwarranted deactivation that would prevent them from driving for the companies.
• Under the Fare Share plan, fares would be increased 51 cents per ride. This money would allow city officials in five years to invest more than $52 million in housing near transit, $56 million to fully fund streetcar service, and $17.75 million to create the Driver Resolution Center.

Dive Insight:

This is not the first time that a city has looked to more closely regulate the ride-hailing industry to offer additional protections to drivers.

New York City became the first in the nation last year to approve regulations on ride-hailing, including a minimum wage for drivers, a cap on new licenses, and a study on ride-hailing's impact on the city's taxi industry and street congestion. These rules brought howls of opposition from both Uber and Lyft officials, who said that the cap would limit transportation options. 

Chicago has also explored similar regulations in the recent past.

In an email to Smart Cities Dive, Uber regional spokesperson Nathan Hambley said the company wants to "compromise" with Durkan on the proposed regulations, noting the fare increase is unfair. The companies already pay a 24-cent fee per ride to fund wheelchair-accessible taxis and regulation of the industry, and Uber officials said they would prefer that issues around driver earnings, benefits and protections be resolved at the state level.

"The Mayor's decision to triple Seattle's tax on ridesharing will raise prices for riders and decrease trips for drivers," Hambley told Smart Cities Dive. "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 rideshare proposals should be developed based on broad input from the entire rideshare driver community in Seattle."

Lyft officials were also critical of Durkan's proposal. Lyft spokeswoman Lauren Alexander told Smart Cities Dive in an email that the company had agreed to a minimum earnings floor with the city, but Durkan rejected that plan.

“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 rideshare most," Alexander said. "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 rideshare 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."

The Driver Resolution Center is a particularly intriguing proposition and comes on the heels of California passing state-level legislation, primarily aimed at Uber and Lyft, that extended wage and benefit protections to workers in the gig economy.

California Gov. Gavin Newsom said in a statement that in addition to those protections, there must be pathways for more workers to unionize and have a "stronger voice at work." Seattle's proposed independent center could be a way to do that, with city officials saying it will include "culturally responsive outreach and education services on driver rights" as well as an arbitration and appeals process.

The legislation is subject to debate and approval by the Seattle City Council. In a statement accompanying Durkan's announcement, City Council President Bruce Harrell said elected officials "will work closely to examine the Mayor's proposal in a transparent manner and will provide an opportunity for the public to weigh in over the next few months."