Mayor unveils proposal to triple Uber, Lyft per-ride tax and to require wages/benefits for their drivers

“Cities are becoming the safety net for America.”

That was part of the reason Mayor Jenny Durkan cited for a sweeping new proposal to change compensation for Uber and Lyft drivers and raise per-ride taxes.

Durkan and Deputy Mayor Shefali Ranganathan discussed it with reporters in a briefing at midday today, embargoed until tonight, to be further discussed at an event tomorrow. We were among the roomful of journalists invited to City Hall for today’s briefing, told in advance only that it would be about a proposal involving “a new proposal for workers, housing, and transit,” so we went downtown to find out more.

One big component: The city currently taxes the companies 24 cents a ride. That would be tripled to 75 cents, with the revenues mostly going to three things:

-Cover the $56 million funding gap for the Center City Connector streetcar (which District 1 Councilmember Lisa Herbold refers to as the “shopping shuttle”)

-Raise $52 million to help build 500 units of affordable-to-workers (defined as people making $15-$25/hour) housing “near transit” (within a 10-minute walk of what the city defines as “frequent”) in the next five years

-Raise $17 million to open and run a “resolution center” for Uber/Lyft drivers, who the city says are often “deactivated” without explanation

The mayor also contended it’s fair to get more out of ride-share companies because they’re using the city’s public right-of-way and curbspace to run their businesses.

It should be noted, while Uber and Lyft are the only ride-share companies affected by the proposal, others could be affected too if they crossed the baseline of one million rides per quarter that start and/or end in Seattle.

Might the increased tax be passed on to ride-share users? Maybe, allowed the mayor, but in other places (such as New York) where costs went up, ridership didn’t go down, she said.

What will be the minimum wage for drivers, who are currently treated as independent contractors? A study, to launch shortly, will sort that out, in time to launch it in July 2020. Currently, Ranganathan said, drivers’ pay averages out to less than $11/hour, while the city’s current minimum wage is $16/hour. Drivers are only compensated for the time passengers are in their vehicles, but studies show, she said, that they spend more than a third of each hour waiting for their next assignment. The mayor declared, “No business should benefit by not treating its workers fairly.”

This will all be part of the mayor’s budget proposal, which goes public in its entirety next Monday. That means it’ll have to go through council hearings and votes before becoming official. First public hearing on the budget is set for 5:30 pm October 3 at City Hall.

–Tracy Record, WSB editor

49 Replies to "Mayor unveils proposal to triple Uber, Lyft per-ride tax and to require wages/benefits for their drivers"

  • Swede. September 18, 2019 (11:07 pm)

    Those coats will likeliest come out of the driver’s pay, because Űber and Lyft ain’t cutting their profits to ‘help’ a specific city. Especially since that tax are aimed at building competition to their businesses. And how will taxing people and businesses more help with making cities ‘America’s safetynet’ less so? Are they hoping to tax them so high they leave town for the countryside? Or just another city? Because the latter sure would help Seattle right! 

    • john September 19, 2019 (11:38 am)

      Hey SWEDE,Both  Űber and Lyft ain’t cutting their profits because they have no profits to cut.  They have never been profitable.  They are each reporting quarterly losses of a billion dollars.Sometimes simple assumptions are exactly that.

      • Swede. September 19, 2019 (3:20 pm)

        Well John off course they aren’t making a dime. I mean Kalanick is only worth a bit over 5 billion personally, from running a company that looses money right! Yes, he will keep taking a profit no matter if you think elsewise. 

        • Ice September 19, 2019 (10:39 pm)

          Swede, you really should spent some time researching Uber and Lyft’s finances as well as how venture capital works. Kalanick is rich because of venture capital, not because their company is actually profitable. They may be profitable soon, but I personally don’t think they’ll be truly profitable until they have automated cars. We’ll see though. The headline is all you needs to read from this article.

        • Rick September 20, 2019 (2:00 am)

          So you feel part of someone else’s assets should be yours. Pretty typical Seattle thinking.

  • Crash September 18, 2019 (11:46 pm)

    It is still amazing to me that Seattle and many other major cities welcomed these “rideshare” companies and pushed most regular taxi companies out of business. Rideshare is a scam on the worker and has always been. Now these same cities are starting to realize that maybe the decades of regulation put in to protect riders and drivers of taxis was worth something, and are now trying to replicate those same regulations. time to regulate the unregulated taxis!

    • AMD September 19, 2019 (6:19 am)

      Amen!  I never understood how these companies got away with running unregulated taxi services simply by calling them “ride shares” instead of “taxis”.  What a joke.  

      • Sna September 19, 2019 (10:54 am)

        Probably because taxis were so incredibly horrible.  They were ok if picking up from a hotel or airport, but perhaps you’ve forgotten the experience of calling one to pick you up at your home.  Surly attitude and a taxi might show up 45 mins later.  Or not.  Just had to deal with it.

    • nick September 19, 2019 (8:59 pm)

      clearly you never rode in a taxi they are terrible and can’t tell you how many times the regulated taxis tried to rip me off or run game. This tax is dumb and the city has no right to require benefits of two companies. I hope they leave so we can return to garbage taxi service and transit that is only barely reliable during commuter hours. Then you can get what you want. The city and county also limited taxis to inflate the licensing costs as well so yea lets step backwards.  

      • Ice September 19, 2019 (10:58 pm)

        You know they also limited taxis because taxis created as disproportionate amount of traffic too, just as Uber and Lyft do. Here is some of Uber’s own data showing just that.

        Nobody thinks that we need to get rid of ride-sharing, but having no limit to the amount of possible Uber/Lyft cars creates traffic and other problems. I don’t think a limit would be going backwards at all.

  • chemist September 18, 2019 (11:50 pm)

    Considering that Uber + Lyft’s recently released study (Fehr and Peers – Vehicle Miles Traveled Memo) indicated they’re only carrying passengers for 30% of the miles the rideshare is travelling in the Seattle region, we should raise the tax even higher on fuel-burning TNC vehicles to help address climate change.

  • Mike September 19, 2019 (5:59 am)

    I’m really confused.  From the Uber and Lyft drivers I’ve had, none complained about the pay.  Why is that you ask, well, there’s a few reasons.  Many used it as a part time gig to add a little side money to their bank accounts for retirement.  There’s the ones driving nicer German luxury cars that used it to pay for the car itself.  There’s the taxi drivers that quit driving Yellow Cab to be more independent on scheduling.  There’s the college kids that do it as a side gig for money.  None, not one, ever said as a full-time job.  I know this because I literally asked each one what got them into driving Uber/Lyft and why they drive.  By taxing it more, the cost will go up, which then is forcing the drivers and passengers to take the hit.  Another money grab by our ‘leaders’.

    • CMT September 19, 2019 (12:09 pm)

      Agree 1000%

    • nick September 19, 2019 (9:02 pm)

      because the more you work the more you make and you set your own hours. The city really helping hard working people here to give it away to bureaucracy and the homeless. Head tax 2.0

  • Chris September 19, 2019 (6:32 am)

    There are two things that confuse me about how these funds will be used. I don’t understand why there is a 56 million-dollar funding gap for a street car that seems to be seldom-used. Lisa is right, it’s used to shuttle employees from South Lake Union software complexes to Westlake Center. And it doesn’t seem to be used very much. I don’t know anyone who has actually taking a ride on it.The other issue is a resolution center for Uber and Lyft drivers. I’m confused why the city would open a publicly-funded resolution center for a private business and their employees? Are they going to do the same thing for Amazon? And Boeing? It is up to Uber and Lyft as the employer – to provide such a center.

    • KT September 19, 2019 (10:22 am)

      “I’m confused why the city would open a publicly-funded resolution center for a private business and their employees? Are they going to do the same thing for Amazon? And Boeing?”  Exactly.  The city is becoming overbearing in their telling businesses how to run.  Expend your efforts on real problems like combating  social disorder and crime downtown before downtown is abandoned by your tax paying residents.    

    • M September 19, 2019 (11:38 am)

      As a local Uber partner, let me just say that Uber is NOT my employer.  As for 16$/hr??Last Friday I was online for 3.2 hours and made $175.  Take 30% off the top, that comes out to $122.50 for my 3.2 hours of work.  Obviously that doesn’t happen everyday, but if you are driving in Seattle and making 11$/hr, you are simply doing it all wrong. 

  • Listen to what’s said... September 19, 2019 (8:00 am)

    This is political gamesmanship of the best kind. They have to pay for the streetcar fiasco, so they’ll get their money from regular people who use rideshare services. Nothing in there about environmental concerns, a red herring about “affordable housing” again, and something that the city has nothing to do with on how these companies transact business with their contractors. She goes after the companies claiming they are using our curb space and right of way but then points out that in other cities where these taxes were levied, ridership didn’t decrease. She’s right, ridership won’t decrease over an additional $.50. People use the services. They are working extremely well. People will pay this premium. She’s just using an anti-corporate narrative to get money from regular people and most lap it up like a cat to milk. 

  • Mj September 19, 2019 (9:47 am)

    No.  How does raising taxes on ride share use help the drivers?  It’s simply another money grab by the City.  

  • HTB September 19, 2019 (9:56 am)

    Hate that we are doing this. What is the point of disrupting an industry if you then have to turn around and play by that industry’s rule

  • Mark Schletty September 19, 2019 (11:38 am)

    If I had Herbold’s job, I would do everything I could to kill the streetcar. Not just because it’s a stupid unneeded waste of money. But more importantly to West Seattle residents, when everything is done with the new transportation routes, 1st Ave. will be one of the main ways to get to our bridge. The streetcar will make it almost unusable, both during construction and after installment. As the 1st District representative, Herbold should go totally nuclear option to protect our residents.

    • Rick September 19, 2019 (6:39 pm)

      If you had Herbold’s job, you might actually do the job.

  • HS September 19, 2019 (11:38 am)

    From a riders perspective, I’m a bit unsure of how this will play out. After the lost legal ruling (potential employee status) rates on both Uber & Lyft almost doubled. Every driver I spoke with said that their reimbursement percentage was unchanged. However, I may just need to get a car again. My commute (just 1 day of my life for this example) is 10 miles one-way. For that trip, a shared ride share is commonly $28 or it’s a two hour bus ride (including wait at bus transfer). It’d be great if the tax varied by distance.

  • Jort September 19, 2019 (11:47 am)

    Merits of the streetcar aside, I’m not sure how Lisa Herbold’s thinks her pejorative “shopping shuttle” moniker is effective? Is it a waste of taxpayer funds when public transportation is used by people who are shopping?  Who cares if people use it to go shopping? Why does this hurt Lisa Herbold’s anti-transit feelings so much? There are plenty of things to criticize about the streetcar project. A potential intended use of that streetcar is a really bizarre thing upon which to fixate your hurt feelings. It’s like calling the Link Light Rail an “Airport Shuttle.”  I mean, yeah, so what and who cares? 

    • chemist September 19, 2019 (1:18 pm)

      Effectiveness is really subjective.  Some people think labels (see: Durkan Delay and Durkan Speedway) are effective strategies.  Even the rebranding of 1st ave extension, Missing Middle, Center City Connector, C3 seems like it’s designed to leave negative press behind.  What I want to know is how much of the projected ridership is expected to come from those already on bus routes (that might be cut back/discontinued) vs actually new-to-transit riders.

  • Graciano September 19, 2019 (11:54 am)

    M, I have a question…Does your insurance company charge more for using your car as a ride share?

    • M September 19, 2019 (6:53 pm)

      Mine went up slighty, maybe an extra 15$/month for the rideshare protection.  

  • Scubafrog September 19, 2019 (11:54 am)

    Another 1-term mayor.  Totally inadequate with her approach to “policing” (and wanted to hire back cops who’ve been convicted of brutal assaults).  Now she wants more taxes.  She’s in charge of a city that has a 0% corporate tax rate, and she’s going after The People for more taxes.  Totally tone-deaf.  Go after Amazon, durk.  Go after Selig.  Go after any number of billion-dollar corporations that aren’t paying taxes (some have negative tax rates).  But stop coming to us, and bleeding us dry.  Your days as Obama’s show pony for WA State are long gone.  Resign, give someone with real governing experience a try.  You’re PATHETIC, durkan.  The homeless rate’s creeping up, daily — any plans for that?  No?  Didn’t think so.

    • neighbor September 19, 2019 (3:08 pm)

      Seattle has a business tax that’s based on gross revenue, and those taxes make up a significant chunk of the city’s budget.

  • shawn September 19, 2019 (12:56 pm)

    Yeh, bringing up Herbold in a transportation context is… not helpful.  Obviously the streetcar is a stupid boondoggle, but we don’t need Herbold to tell us that; she doesn’t seem to value public transit in any form.And $0.75 is sad; it really should be closer to $2.00, considering the scale of problems we have; housing, transportation & traffic, access to fiber, mental health, etc. etc.Is this the best way to raise money?  Probably not.  But Washington State really really likes to micromanage how municipalities raise tax money, so we are stuck with the limited tools we have until something in that space changes…

  • TM7302 September 19, 2019 (1:09 pm)

    Absolutely another money grab by this incompetent (thank you Seattle voters) mayor and council.  Just a money transfer from workers, employers and consumers to fund another unnecessary city operated function.  If Uber and Lyft are horrible employers,  unprofitable and with unhappy/underpaid employees, then it is time for these companies to fail based on market economics.   Just another thought, how would this situation play out if these rideshare companies were under the same regulations as the taxi companies?

  • Joe Z September 19, 2019 (1:50 pm)

    Would really like to see major restrictions on ride-hailing in the downtown core. An outright ban in rush hour would help ease congestion downtown. Taxing is ok but it is not ok to divert the revenue away from transportation. 

  • Jim P. September 19, 2019 (2:14 pm)

    “Raise $17 million to open and run a “resolution center” for Uber/Lyft
    drivers, who the city says are often “deactivated” without explanation”Say what?  When did this sort of thing become a city’s responsibility? You could give 10,000 “deactivated” drivers $1700 each at this price tag.  What “resolution:” is planned?Does any other form of employee get this?  What happened to unemployment insurance?  Easier to change that law and require coverage of contract help if it comes to that.”The mayor also contended it’s fair to get more out of ride-share
    companies because they’re using the city’s public right-of-way and
    curbspace to run their businesses.”  “HI Mr. Turnip, how’s that old blood supply doing? We think you owe us a lot more.”Do they hit up UPS, Dominos etc for similar things?  “Equal justice under law” comes to mind if they do not.So, she is saying they do not pay for their license plates, registration, gas taxes and the myriad other ways someone with a car is already taxed?I seem to recall tons of property tax enhancements levied on home and building owners whenever streets and sidewalks get improved.  Pretty hefty taxes downtown in fact and you can still lose an axle now and then on some of the more “fun” roads.

  • anonyme September 19, 2019 (2:26 pm)

    Why does no one ever talk about the environmental impact of thousands of extra cars on our streets due to Uber, Lyft, and Amazon? 

    • Jort September 19, 2019 (4:40 pm)

      I do! But yeah, cars are the single greatest source of carbon emissions in Seattle and their share is steadily growing.  Trust me, the people of Seattle have made it clear that they’d rather watch the planet burn to a crisp before they cede even one single solitary inch to a pathetic bike lane.

      • Mike September 19, 2019 (10:07 pm)

        Jort, cars are not.  One, one single cargo ship coming to port in Seattle puts out more carbon emissions than every single car in Seattle combined.  Yay for science!

        • Jort September 20, 2019 (12:35 pm)

          Oh hey Mike. Sorry, you’re wrong. If you’d like more information about this, feel free to view the data here:           Just to clarify the data for you, commercial marine traffic is accounted for in the data, and it represents 1.3 percent of Seattle’s carbon emissions (compared to private automobiles 27.7 percent). In case you think cargo vessels are being excluded, note this specific language: “Marine transportation includes pleasure craft, Washington State Ferries, cruise ships, cargo vessels, and other commercial boat traffic, such as tug boats. Look, I’m not trying to be mean, but your assertion is factually, wildly wrong and I think it’s important for people to understand the real and direct impact their driving has on killing our planet. YAY FOR SCIENCE.

          • WSB September 20, 2019 (12:59 pm)

            Thanks, I was trying to sleuth this but had trouble finding direct comparisons from a nonpartisan source.

          • Mike September 20, 2019 (7:28 pm)

            “Emissions that occur near shore (maneuvering) and while docked (hoteling)”You need to read the whole thing (I did), Jort.  If we only want to count this way, then cars only need to be counted when parking and idling in the driveway.Don’t be fooled.

          • Mike September 20, 2019 (7:55 pm)

            In addition to all that, City Light leaks SF6 and attempts to buy an offset of that greenhouse gas. I’m not sure how you buy away permanent damage, but they apparently do., we’re now learning more about how bad SF6 really is, synthetic and its impact lasts for 1,000 years.

    • Chris K September 20, 2019 (4:22 pm)

      Given all of the information about the damaging effects of gasoline-powered cars, it is mind-boggling that anyone in this City would still own one.

  • Drive September 19, 2019 (3:27 pm)

    How many people using ride share could have walked/biked/used transit???  Where are the “too many car’s” people??

    • chemist September 19, 2019 (4:05 pm)

      I imagine some of them are panicking about today’s news of LimePod phasing out over the next few months after bleeding VC funds/Fiat discontinuing some models in North America.

  • Bob Lang September 19, 2019 (8:24 pm)

    Like everything home owners and tax payers will front the bill and get nothing in return.  So sick of Seattle.If they want better pay form a union.  

  • nick September 19, 2019 (9:13 pm)

    This city really hates working class people. I never had one uber or lyft driver complain and some told me they like it because of the freedom of schedule along with quitting other jobs to work full time. This is just head tax 2.0 and will hurt the drivers more than anyone. The arguments the city is making are also a joke and I plan on writing them to show my discontent on this dumb tax. They need to charge impact fees to developers before crap like this too but that industry is liked by the local political machine here. I hope that uber and lyft also sue them too because this seems borderline illegal and stinks of corruption or they just pull out of the city.

  • 1994 September 19, 2019 (10:03 pm)

    All these extra taxes and the ability to move around Seattle just gets worse. There are so many new strangle and bottle neck points on the roads that I wonder how SDOT can claim they are in the traffic moving business and keep a straight face.  Remember this voter approved tax? It may not be moving as many people as was the proponents claimed in order to get your vote. The bus may run more frequently but that does not mean more people are riding it.Voters approved a measure in the November 2014 election that started expanding Metro service in Seattle in 2015. The additional service is paid for with a $60 vehicle license fee and 0.1% increase in the sales tax. The improvements focus on reducing overcrowding, increasing frequency and increasing reliability. VOTE No on this in 2020 when it comes up for renewal.

  • flimflam September 20, 2019 (8:32 am)

    ride shares are terrible – i know some find them very convenient, but more cars on the street are more cars on the street. they are a huge contributor to traffic woes as well as some awful driving.i’m surprised that cities have essentially handed their streets to these companies while taxi companies have had to fight tooth and nail for years.

  • anonyme September 20, 2019 (4:03 pm)

    I agree with the many others who think this is a solution without a problem.  It makes no sense for the city to be stepping in to impose rules on private business, above and beyond existing labor laws.  Why not regulate Nordstrom? Unionize, as another suggested.  This mayor continues to add layer upon layer of tax-guzzling bureaucracy with little to no result, including the latest addition of yet another homeless agency.  The multiple, deceptive levies have been used as a way to raid the general fund.  We need to get Durkan out ASAP.

  • ScubaMoto September 26, 2019 (5:27 pm)

     Our fearless leaders want to blame downtown congestion on Rideshare. That was one of the original stated objectives of the rideshare tax.  To act as a deterrent to use. I guess the logic is, “It worked for Gatorade, so. . .”  Rideshare is 2% of the traffic in downtown Seattle. In 1990 dollars, we spent half a billion tax dollars on the Metro tunnel to get buses off the streets of downtown to make businesses more accessible. What the same fearless leaders don’t tell you is that earlier this year, without asking our permission, they kicked 830 bus routes per day out of the Metro tunnel and onto the streets. Yes, 830 PER DAY!  Why isn’t anyone talking about that? That’s a perfect example of politicians trying to play transportation engineer.  And now they are mystified as to why there is congestion in downtown. Please leave Rideshare alone. It has solved far too many problems. Plenty of passenger routes are not accessible by public transit. In one day, if a Rideshare driver transports 20 people to their destinations using one vehicle, that’s 19 cars not leaving their driveways and individually adding to traffic congestion. This tax is not earmarked for driver benefits and it’s not earmarked for congestion reduction. A tax on Rideshare just adds to the cost of accessing downtown businesses. 

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