Even with growing evidence that driving for companies like Uber and Lyft can be a real grind, the greatest bulk of entrepreneurial energy around Capitol Hill and the Central District continues to be professional drivers.
According to tax information from the City of Seattle, the “transit and ground transportation” category was, again, the single largest category of new businesses started in District 3 ZIP codes last year, topping its nearest rival with nearly six times more companies started in the area in 2017.
At least 177 individuals around District 3 created businesses for their rideshare driving over the past year, but in past examination, CHS found the drivers are not a monolithic group. Time commitments and dependence on driving for income varied greatly among the drivers that spoke with CHS.
That fits with recent research from MIT that shows many drivers if not the majority face an uphill climb earning an adequate living driving for the largest services. A driver’s median profit is $3.37 an hour after expenses, MIT’s Center for Energy and Environmental Policy Research said. Other methods of calculation show higher profits are possible.
There is certainly a draw to the business opportunity. 2017’s top slot for drivers is the same ranking CHS found in 2015, the last time we looked at the tax information, when drivers represented 9% of the District 3 companies registered with the city. The category appears to be pulling away from the pack.
Businesses started as part of the “app economy” represent one aspect of the shifting business activity on and around Capitol Hill. From 2008-2010, a business license for independent artists, writers, and performers was the second most commonly opened in District 3. From 2011-2013 artists topped the list as the most common newly licensed profession. The license count then dropped to fourth in 2014 and fell to ninth in 2015. We found two new “musical groups and artist” businesses listed in 2017. Signs of the slowing restaurant economy can also be found in the data as new restaurants slipped from fourth to sixth in the rankings. Meanwhile, growing category “bed and breakfast inns” may be indicative of yet another corner of the “app economy.”
One important caveat across the entire analysis: The tax information corresponds to the address at which the business is registered, not necessarily where the business or offices are located.
Prior to Uber coming to Seattle in 2011, the “All Other Transit and Ground Passenger Transportation” category didn’t exist and didn’t take off until 2014 (the city data does show a bump in “Taxi Service” businesses between 2011-2014, which may account for some of the early app-based drivers).
The rapid rise of the industry put a spotlight on the rights and working conditions of its drivers, particularly those who drive as their primary source of income. The Seattle City Council approved an ordinance in late 2015 to allow rideshare drivers to collectively bargain despite the fact the drivers operate as independent contractors. The ordinance remains tied up in the courts.
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