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Mayor’s ‘Fare Share’ plan would add minimum wage for drivers and 51 cent fee to every Uber and Lyft ride in Seattle to pay for streetcar, housing, and industry regulation

(Image: CHS)

Seattle is preparing to target one of the most lucrative — and easily the most traffic-bloating — corners of the city’s “app” economy to raise more money for public transit, affordable housing, and, yes, further regulating and monitoring the industry.

Mayor Jenny Durkan has rolled out a 2020 “Fare Start” budget proposal calling for new legislation that would add 51 cents to the cost of every Uber and Lyft ride in the city and set new minimum wage requirements for the industry’s freelance drivers.

“Economic models really vary from app to app,” Mayor Durkan said Wednesday in a media briefing outlining the new proposal and explaining why the “transportation network company” industry tax and regulation ended up in Seattle’s fast lane.

An existing 24 cent fee currently funds wheelchair accessible taxis and “regulation of the industry.” Funds from the additional 51 cents per ride charge would generate $52 million for housing near transit, $56 million to fund the Center City Connector streetcar, and $17.75 million to create an independent Driver Resolution Center for Uber and Lyft drivers, the mayor’s office says. After 2025, new revenue will fund transit, bicycle, pedestrian, and safety projects, the mayor’s office said.

The 75 cents per ride fee would bring in $24 million starting in 2021 and grow to about $27 million by 2025, if the mayor’s office’s projections hold true and demand for the ride services doesn’t dip significantly.

The fee would only be charged on rides from the city’s largest providers. A threshold of 1 million rides per quarter means smaller providers won’t be subject to the added tax.

“As Seattle continues to grow, we need policies that support more transportation and housing options, and strong worker protections to make Seattle a place where everyone can thrive,” Alex Hudson, executive director of the Transportation Choices Coalition said in a statement. “By investing in streetcar, bus, light rail, biking, and walking improvements in Seattle, we can give everyone more choices to get where they need to go, spending less time in traffic and more time with loved ones.”

In addition to adding the 51 cent fee, the mayor is also proposing the city “mandate that Uber and Lyft drivers be paid a minimum wage in addition to compensation for benefits and expenses,” and create a new Driver Resolution Center “to provide Uber and Lyft drivers representation services and an impartial process for settling unwarranted deactivation by the companies.”

The center would be a first of its kind in the nation and operated by an independent provider that is likely experienced in “grievance resolution,” Shefali Ranganathan, Durkan’s deputy mayor said Wednesday.

Saying her proposal was really about “fairness” to the industry’s drivers, Durkan pointed out the “significant impact” on city and transit infrastructure the services wreak.

Last year, Uber and Lyft accounted for 24 million rides in Seattle, half of which either started or ended downtown, her office says. “We know that Uber and Lyft contribute to congestion downtown, and slow down buses and clog streets and curbs,” a presentation on the mayor’s  proposal reads. “A recent UW analysis found vehicles picking-up/dropping-off passengers constitute on average between 29% to 39% of total traffic volume in South Lake Union during peak hours.”

An independent study released last year fingered ride share companies like Lyft and Uber for actually increasing traffic in densely populated cities like Los Angeles, San Francisco, and Seattle.

With ride sharing a critical component of the rapidly growing Seattle area’s transportation infrastructure, City Hall has been doing what it can to shape the industry’s labor practices as it has opened its streets to the services. In 2015, the council voted to give drivers collective bargaining rights, a move that immediately ended up in the courts. Last year, the City Council passed a resolution calling for study of a “minimum rate” for TNCs.

Though reports suggest that many drivers in the industry are unable to make a living through driving alone, in recent years, professional drivers have been the top-ranked new business created in District 3 neighborhoods including Capitol Hill and the Central District.

Research from MIT showed many drivers if not the majority face an uphill climb earning an adequate living driving for the largest services. A driver’s median profit was $3.37 an hour after expenses, MIT’s Center for Energy and Environmental Policy Research said.

The nation’s largest cities have also targeted the industry. In New York, reports show demand has dropped as fares have risen following the city’s passage of minimum wage rules for drivers. And in San Francisco, voters will decide whether to implement a proposed new tax on the services.

The mayor’s proposals will be part of her 2020 budget proposal that will then be shaped by the Seattle City Council. In a statement on the plan, current council president Bruce Harrell who decided not to run for reelection and is serving his final weeks at City Hall said he has no interest in “stymieing the industry.”

“All TNC drivers should be receiving fair compensation for their work,” Harrell said. “Council 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”

Durkan, Wednesday, said she also had concerns of “unintended consequences for the industry’s drivers. “They like having these jobs,” she said. “They just want to be paid fairly.”

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35 thoughts on “Mayor’s ‘Fare Share’ plan would add minimum wage for drivers and 51 cent fee to every Uber and Lyft ride in Seattle to pay for streetcar, housing, and industry regulation

  1. Thanks for the reporting CHS

    Happy to see the city exploring new funding streams, but it looks like the biggest piece of proposed tax revenue will go to fund the Streetcar, which seems unwise.

    Seattleites knew the South Lake Union car was a silly idea and we really knew the Capitol Hill car was goofy and now we’re supposed to support the City Center car because it will connect the two. It’s an amenity for tourists and downtown real estate that will be vestigial after the subway line goes in. Make downtown pay for it- not Uber/Lyft riders.

      • I think the second “ST3” tunnel is projected for 2035, so that’s forever away. But the City Center car is projected for 2025. In the meantime we already have a subway that runs the same route (Westlake to Pioneer Square and the Stadium)!

        What’s your argument for the City Center car? Is there a big group of commuters that will be served by it? Why not just take the bus from Capitol Hill to Downtown?

  2. Tax, tax and more tax. Until Seattle revolts this won’t stop. Uber is already pretty expensive. The streetcar is a wasteful vanity project and doing this to Uber and Lyft is reprehensible.

    The city is incapable of solving problems without imposing new taxes or restrictions.

    Very disappointing.

    • Don’t forget that EVERY tax levy on the ballots get approved. Almost always. So some of that blame goes to Seattle voters. In fact, most of it.

      • Yeah, unless the fees hit *them*. Support for fees is mostly theoretical as long as someone ELSE is paying for them. Witness the pushback on fees for Lyft and Uber. Why should private transport that mostly more-affluent people use escape fees, when public transport that benefits everyone is available? Maybe back off on the fees during hours when public transport ISN’T running.

      • Yeah, unless the fees hit *them*.

        Seattle voters have been voting in all kinds of fees and taxes for decades…wouldn’t you think we would have notices the fees “hitting us” by now? Either we know what we’re doing or are idiots, which is not likely, considering we are one of the most educated cities in the country.

        Funny too that the most educated cities in the country are the same ones that tend to vote in taxes and fees to make their cities better.

        Remember when people, including certain individuals on this blog, were guaranteeing that Seattle voters would quickly overturn the $15/hr minimum wages when their Big Mac prices went up?

        Your opinion of Seattleites is very interesting.

    • Just implement income tax and be done with levies. Oh wait, we can’t because Olympia.

      Seattle voters will keep approving levies to pay for services and improvements they consider necessary.

      What do you find disappointing in that?

      • Why not? It’s a mode of transportation anyone can use if they want to go from one place to another. Unless your definition of transit is fixed route streetcars that are slower than walking and require hundreds of millions of dollars in taxpayer subsidies.

        Uber and Lyft work and are popular. So yeah, let’s tax the crap out them to pay for the city’s failed pet projects.

  3. All of you assuming that nobody rides the streetcar or that it is unpopular don’t know what you are talking about. I use it daily to go to work and there are always lots of people on it.

  4. So, let me get this straight: Rather than taxing the people it will benefit the most (land owners) they are going to tax the people that are the most convenient.

    Got it!

    • Whaaa… how do ‘landowners’ benefit from having Ubers and Lyfts? Is it somehow super convenient to have awful drivers who usually have no clue where they are going, just stop wherever they please (like in the middle of a freaking arterial or ‘waiting’, blocking up an intersection with their flashers on) jamming up the roads… Do us all a favor try actually walking somewhere….. or maybe try out the streetcar. It’s actually a really convenient way to get down to the ID.

      • They benefit from having a working streetcar (and public transportations) system. It raises property values, so landowner profits go up when that property is sold.

        Ergo, if it’s a benefit for landowners, they they are the people who should be taxed.


      • Think yourself chum – we homeowners already pay into the kitty to the tune of many hundreds of your Uber rides for no other reason than that we live here. You are getting a ton of benefit out of this neighborhood when you come up here to go to our restaurants and other venues. You shouldn’t expect to just get all that for free – especially when you are clogging up our streets with extra traffic by riding an Uber rather than taking public transit. You bring in congestion, pollution, make our streets less safe. You *should* pay a premium for the privilege. You don’t like it – walk, grab a bus, take the trolley. It’s healthier for all of us and you’ll be supporting an institution you use.

      • @CD Neighbor
        If you want less congestion, pollution and safer streets; are you in favor of protected bike lanes, banning street parking and building more transit?

      • I’d be fine with removing street parking from all arterials. I’d also have no problems limiting street parking permitting by issuing them per property and no more than a property has room for – you have space for one vehicle, you get one permit and so on. I have no problems with building more transit. I’m thrilled to see the progress Sound Transit is making. Personally, I rarely drive in the city – I have to be picking up something that absolutely cannot be transported any other way – and it’s got to be huge. I don’t use a car for piddling things like groceries, 40lb bags of kitty litter or compost and mulch from the garden center. I certainly don’t Uber… I bike commute to work, I walk around the city and occasionally use public transit when time is such that walking won’t work.
        Protected bike lanes are horrible and city engineers should be banned from even mentioning them, much less building them – I say this as an experienced cyclist. They are dangerous and implemented in the *worst possible ways* in this city – please stop advocating for them…. just stop they are awful.

      • Street level protected bike lanes have been shown to be more dangerous than no road treatment at all when placed in the wrong places – ie, all the places where Seattle builds them… on high volume roads with many driveways and intersections and fairly slow traffic. They reduce cyclist visibility at intersections, decrease maneuverability, cause more intersection incursions and are very often confusing and dangerous at the places where cyclists are expected to reintegrate with regular traffic. Don’t even get me started on how insanely stupid the ones that have people ride against traffic are…

        But if you actually have ridden for any period of time you likely already know this and don’t really need a study to tell you what is painfully obvious….. and yes I will choose to ride AS traffic every time over using one of those idiotic lanes…. Which makes me hate them even more, because when they are present, motorists get all miffy if you aren’t using them, even though state law says it’s *my choice* to use or not use a bike lane….

    • One is from my own decades of experience as a road cyclist/commuter/racer and understanding of what is a bad situation to be riding in and I can tell you that the protected lanes I’ve seen or experienced here in Seattle are a real cluster.

      If you don’t want to trust me you can look to more studied methods like this one:

      read it – it’s like Seattle planners looked all the what not to dos and used them as a guide…

      It’s not that bike ways are *always* bad – I wouldn’t want to share the 520 bridge with the cars, but greatly enjoy that I can ride across it, I’m thrilled that Bellevue put in an uphill bike lane on Northup Way – it’s a place that it makes sense (note there no parking next to it), but I have yet to have seen a single protected lane that Seattle has put in that I don’t think is an accident waiting to happen or that I would personally use…. they do egregious thing like the dual way lane on Broadway – or the bus stops in the middle of the lanes on the down hill portions of Dexter and Roosevelt that you simply must expect will have people standing in the middle of the bike lane…. They dump unsuspecting riders into a situation where they are suddenly parallel to trolley tracks (Jackson) or suddenly with little to no warning into a merge with general traffic. They often allow parking on the left hand side of them – which effectively blocks cyclist’s view of moving vehicles and driver’s view of moving cyclists… They don’t ticket people who drive in them or park in them… (Broadway). The are just extremely poorly sited, designed and implemented.

      The most unfortunate thing is that people have been told they are safer and they simply believe it, so they use them and are probably less situationally aware because of that false sense of security…. it surprises me little that one of the current bike accident hotspots is Roosevelt Way between 45th and the U Bridge.

      • 1. Just wondering – did you actually read that study you keep citing? It’s a really bad study that’s funded by the auto insurance industry, and the only data it uses is by speaking with ~600 emergency room patients who were in bike accidents, and then analyzing the cause of their crash.

        Things it’s not doing:
        – looking at crash rates for different kinds of bike lanes as a percentage of overall users
        – discussing how protected bike lanes influence the overall number of users by helping people feel safer

        And the study includes in its limitations: “While a case-crossover design evaluates the relative risks associated with infrastructure at a point in time, it cannot explain if the installation of a protected bike lane made a roadway safer or less safe.”

        2. There’s tons of evidence that bike lanes do improve safety. Lots of evidence from europe, and even in this country, lots of evidence showing that protected lanes result in dramatic ridership improvements and much higher perceptions of cyclist safety.

      • Believe what you like. I know what I know… The great majority of bicycle accidents occur at intersections, either with streets or driveways. Separated bike lanes do nothing to prevent this – *nothing* – in fact they make it more difficult for motorists to see cyclists, more difficult for cyclists to see anything and maneuver, can be confusing for both and increase accidents.

        Separated bikeways are rarely preferable, remember they *only*, possibly, prevent the most rare kind of accident – being hit from behind, bike lanes in general are only wise when climbing hills and on higher speed streets with *no* street parking and a low number of side streets and driveways. On city streets it is far better to use the lane – be visible, show your intentions clearly – be able to make eye contact with drivers – have the space to avoid hazards.

        You are welcome to use Seattle bike lanes. I wish you luck with that and hopefully you won’t be one of the many people who hurt because you have been lulled into thinking you are safe…

  5. the Mayor and Council were brave enough to impose the tax. Now they should be smart enough to spend it and the 1st Avenue right of way and necessary service subsidy on better projects than the CCC Streetcar. Examples include sidewalks on frequent transit arterials that lack them, trolley bus overhead, and earlier implementation of RapidRide lines. better transit circulation could be provided on 1st Avenue with already funded bus routes. that the CCC streetcar is forecast to attract ridership is fine; it should be compared against a network with the funds and right of way spent better.