Uber trips will jump 24 percent in cost starting in the new year in Seattle, with the rideshare company raising prices to accommodate a new law requiring drivers be paid the city’s minimum wage, GeekWire reported.
In September, the Seattle City Council unanimously voted to adopt new rules which force Uber and Lyft to let their drivers earn the city’s $16.69 minimum wage in 2021.
That means the rideshare companies will have to pay their drivers at least $0.56 per minute when they’re driving, along with a per-mile rate to cover expenses, GeekWire writes.
According to the City of Seattle, that standard will help make sure drivers make at least the city’s minimum wage, so long as they spend at least half their time waiting for rides or ferrying passengers.
Uber spokesperson Harry Hatfield said the company knows “that any price increase is frustrating for customers, and we continue to look for new ways to reduce prices while complying with the City Council’s laws,” according to the report.
“There were progressive ways to create earnings protections for drivers without harming Seattlites that rely on ridesharing, and we are disappointed that the City Council was not more open-minded in their deliberations,” Hatfield said.
Rachel Lauter, executive director of Working Washington, said the fare increase could “alienate thousands of customers in a key market in a fit of spite over having to raise pay for workers,” GeekWire wrote.
Uber was hit by the COVID-19 pandemic and lost around 80 percent of its ride volume as people sheltered at home early in the year. Along with insurance, card processing fees, customer service, an in-person driver center and maintenance for vehicles, Uber needed to hike its prices, according to the news outlet.
While Lyft hasn’t announced a fare hike, the company said it might do so in the future if needed.
Uber, Lyft and other companies have faced pressure to negotiate with unions and labor groups to help reclassify gig workers there as full employees.
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NEW PYMNTS DATA: THE DECEMBER 2020 SUBSCRIPTION BUNDLING REPORT
About: The PYMNTS Subscription Bundling Report, surveyed a census-balanced panel of 2,962 U.S. consumers to gauge how their attitudes toward bundled subscription services have changed during the pandemic, especially those offered by companies in the streaming sector. The report also examines how the knowledge that a COVID-19 vaccine will soon be available throughout the U.S. could affect their perceptions.
