Following similar moves in New York City and California to ensure fair compensation for Uber and Lyft drivers, Seattle Mayor Jenny Durkan has released her Fare Share Plan, which proposes to secure a minimum wage and benefits for independent contractors, and would add a new per-ride fee to complete the Center City Streetcar line, create more affordable housing and provide worker protections for drivers.

The mayor said long-term jobs are being lost to the gig economy, and because Uber and Lyft drivers are independent contractors, those companies do not have to provide the $16 minimum wage as required of large employers in Seattle.

“Cities are becoming the safety net for America,” Durkan said during a Sept. 18 press briefing, “and in this changing economy workers who do not get adequate protections are going to be leaving the city for greater supports.”

The City of Seattle points to a 2018 report by the Economic Policy Institute that found an Uber driver averages $10.87 per hour after deducting company fees, vehicle expenses and Social Security and Medicare taxes.

“Based on that study, drivers are not making anywhere near minimum wage,” said Deputy Mayor Shefali Ranganathan, who led the bulk of the presentation on Sept. 18.

Uber and Lyft drivers are only compensated when they are transporting passengers, and not when they’re on the mobile apps, driving to pick up a fare or waiting for a ride request, Ranganathan said. These companies also do not cover vehicle maintenance, repairs, insurance, depreciation and fuel costs. She said drivers in Seattle spend 40 percent of their work time logged into an app and waiting for a trip request.

“As we know, these cars tend to be driven more, and so expenses associated with purely maintenance, repair, gas and depreciation tend to be higher,” she said.

The Fare Share Plan would require Uber and Lyft to provide minimum wage to drivers and cover expenses incurred for their benefit effective July 1, 2020. It also would add a 51-cent fee per ride on top of a 24-cent fee that is used to fund the purchase of wheelchair-accessible taxis and regulate the industry, which would take effect at the same time as the wage and benefits requirement.

New York City collects $2.75 cents per ride, and the new per-ride tax the mayor proposes, combined with the current 24-cent charge, would put the total per-ride tax in Seattle at 75 cents.

A portion of the revenue from the new per-ride fee would be used to create and operate a nonprofit Driver Resolution Center for supporting Uber and Lyft drivers, particularly when their account is deactivated for what they believe is an unfair reason. Ranganathan said wages and deactivations were the two primary issues drivers brought up during previous mayoral roundtables. The city will seek a contractor to operate the Driver Resolution Center, and disputes would be handled by a neutral arbitrator. The city estimates the new per-ride fee would generate $17.75 million over the first five years for worker protections.

Another $56 million in revenue is expected to be generated by 2025 to fill a funding gap for the Center City Connector streetcar line that will connect the South Lake Union and First Hill lines through tracks running through Pioneer Square, Belltown and Westlake. Streetcar ridership was up 18 percent in 2018, and 31 percent just for the First Hill line. The Seattle City Council recently approved a $9 million loan for SDOT to do more design to bring the cost down. Durkan paused the project last year to conduct an assessment, which found the Center City Connector will cost significantly more than had been previously estimated. It had been $177 million before the pause, and is now closer to $286 million. SDOT recently cancelled a $52 million contract for new streetcars, which were deemed too large for the tracks.

Uber and Lyft provided more than 24 million rides in Seattle last year, and half either started or ended downtown, contributing to the congestion problem. The city cites a University of Washington analysis that found vehicles picking up or dropping off passengers make up 29-39 percent of total traffic volume in South Lake Union. It’s unclear how many people using ride-hailing services could switch to the streetcar once the Center City Connector project is finished.

“The streetcar will stand on its own merit,” Durkan said, “regardless if people gravitate.”

Data from the City Budget Office and SDOT show a 75 percent increase in rides from 2016 to 2018, and 2019 rides are on track to reach 28,000, which is double the number in 2016.

Revenue collected beyond 2025 would be used to fund transit, bicycle, pedestrian and transportation safety projects. SDOT director Sam Zimbabwe said curb-space management is needed, and the mayor added that designated pick-up and drop-off locations are a focus for the city.

The new per-ride fee is also projected to generate $52 million for the city to invest in affordable housing near transit-oriented development. The housing would be prioritized for individuals and families making $15-$25 per hour.

Durkan said the City of Seattle can’t classify Uber and Lyft drivers as employees; that has to be done at the state level. While the Legislature could address the topic next session, she said, the city is going to take action to get drivers a fair wage now. The proposal would only apply to ride-hailing companies logging one million rides per quarter, which means only Uber and Lyft will be affected at this time.

“No business should benefit from not treating their workers fairly,” Durkan said.

The Fare Share Plan will be transmitted next week as part of the mayor’s budget for consideration by the city council, at which point Ranganathan said work would begin to conduct an independent study to determine fair wages. A report would be completed by March.

New York City has already implemented its own minimum wage for drivers, and also capped the number of ride-hailing vehicles allowed on city streets and set limits on how long drivers can cruise Manhattan without a fare. The city conducted its own study prior to implementing the minimum wage requirement, which will help the City of Seattle when it starts its own study, Durkan said. The mayor said it’s in Uber and Lyft’s own interest that Seattle have the most reliable data to work with.

Durkan said ride-hailing drivers had varied views regarding how to be fairly compensated for their work when it came to trip lengths, duration and congestion. If pay were increased per mile, she said, drivers would still only be compensated for times when a passenger is present.

The mayor confirmed Uber and Lyft were made aware of the Fare Share Plan ahead of the proposal’s public release. Without specifying which, she said one was committed to working with the city while the other responded favorably to ensuring drivers are paid adequately and received benefits.

“They were themselves largely centered around California,” Durkan said.

California lawmakers passed Assembly Bill 5, which Gov. Gavin Nesom signed Wednesday, that requires gig economy companies like Lyft and Uber to treat drivers as employees. The companies, along with DoorDash, have already been planning a legal fight to oppose the legislation.