Seattle just joined New York City as one of the few locations in the country to pass minimum wage legislation for ride-share drivers, the city’s latest attempt to regulate the gig economy. Under the “Fair Share” program pushed by Mayor Jenny Durkan and unanimously approved by the City Council on November 25, a new tax of 51 cents per ride will be levied to fund affordable housing programs and other civic projects, as well as help pay for the $16 per hour minimum wage and various other workplace protections. The plan will only impact those ride-share drivers working for companies that handle 1 million rides per quarter in Seattle (which as of now would only impact Uber and Lyft drivers).
We’ve been expecting this since August, when the New York City Council passed a proposal establishing that ride-sharing driver should earn a minimum rate of pay, the first such minimum wage in the nation. Today, the other shoe dropped and the minimum wage was set.
We’ve been asking for increased regulation of the gig economy, and we got it – just not the kind of regulation businesses were hoping for. While gig businesses are craving a modern regulatory approach to misclassification issues, the New York City Council yesterday instead issued a series of new laws that could serve to cool off the growth that we’ve been seeing for the past few years. Among the new laws, ride-sharing drivers will soon be entitled to what appears to be the nation’s first minimum payment wage rates, and the number of licenses for permissible ride-sharing drivers will be artificially capped for the first time.