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Mayor Durkan Ignores Drive Forward, Pushes Failed NYC Earnings Standard

Driver's at Seattle City Hall
Drivers at Seattle City Hall (photo: DF) 
 

After nearly a dozen meetings with Drive Forward staff and members, Seattle Mayor Jenny Durkan and her staff have ignored concerns on her Fare Share Plan for a rideshare earnings standard.  Drive Forward has been calling for a rideshare earnings floor no driver can fall below. However, Durkan didn’t listen and, on August 13, announced a rideshare earnings standard that is the same as the failed approach used in New York City. 

Her plan proposes a system based on a report by economists James A Parrott and Michael Reich commissioned by Durkan’s office through a legally questionable, Seattle tax-payer funded, single-source, no-bid contract.  This report’s recommendations are virtual carbon copies of those made in the 2018 report Parrott and Reich produced for New York City.   However, the failure of the recommendations of the 2018 report was not addressed or even discussed in the 2020 Seattle study. 

Since NYC adopted the Parrott and Reich recommendations last year, over 10,000 drivers have permanently lost access to the platforms, drivers are working longer and making less money, and drivers who do not meet certain high trip volume standards have restricted access to the apps.  Two key “features” of the Parrott and Reich/NYC standard are setting a per trip formula and including a driver utilization rate in that formula.  These two parts of the standard are impossible for the companies to comply with unless they restrict the supply of drivers in a way that more closely matches rider demand. 

As a direct result of a utilization rate in the minimum earnings per trip calculation, Uber and Lyft implemented a series of controls in NYC to limit driver access to their platforms.  These controls included advanced scheduling of driver time on the app, restricting low-volume drivers’ app and scheduling access, and automatically signing-out drivers when they entered a time or area of low demand.  These restrictions which the companies imposed as a result of the NYC regulations took away the very thing that attracts people to this type of gig-economy work, the freedom, flexibility, and independence to work on your own terms.

Uber NYC Access Denied/photo from therideshareguy.com
Uber NYC Access Denied
(photo: rideshareguy.com) 

 

This system was so unpopular that NYC drivers took to the streets and shut down the Brooklyn Bridge in protest. Even the NYC Taxi and Limousine Commission, which regulates rideshare and the earnings standard, has quietly suspended the utilization rate measurements, because it was harmful to the very drivers it was supposed to help.  Yet Mayor Durkan is apparently moving full steam toward implementing the same Parrot and Reich/NYC system - a per trip calculation including a utilization rate measurement - that has caused so many problems for drivers in New York.  

If the Parrott and Reich/NYC system were to work anywhere New York would be its best chance. Their system heavily favors full-time high-volume drivers, those who drive 600+ trips per month. As a result of the significant investment of $5000-$6000 per year to get an NYC For-Hire-Vehicle license, a vast majority of drivers are full-time.  Whereas, 71% of Seattle drivers work less than 20 hours/week, and the regulatory cost to be a rideshare driver runs around $200 per year, a very low barrier.   Under this NYC style system, biased toward full-time high-volume drivers, it is Seattle’s part-time drivers that will disproportionately lose access to the platforms and their source of income.  In such an expensive city, it is incredulous that Mayor Durkan would even consider a system that would cost people their jobs.

Mayor Durkan should listen to the drivers' voices that are calling for a minimum earning standard, as one is needed, but instead look to be innovative and create a new system that sets an earnings floor that no driver can fall below.   Drive Forward has proposed a minimum earnings floor based on Seattle’s highest-in-the-country minimum wage. It adds a reasonable amount for unreimbursed expenses, and accounts for currently uncompensated driver wait time.  This standard is equivalent to $27.50/hour on-trip driver earnings, excluding tips.  The standard would be applied on a weekly average basis, if a driver falls below the average at the end of a week, the companies have to “bump-up” their earnings to meet the standard at the company's expense.  If a driver is above the standard for the week, nothing happens, the driver keeps what they earned.  

This system would negate the need for driver access controls by the companies as it does not require the companies to prioritize utilization at the expense of driver flexibility and access.  At the same time, it will help those drivers who most need it by ensuring no driver earns below minimum wage. Mayor Durkan should listen to drivers and implement an innovative solution to driver earnings not a failed one.

 

We believe in driver independence

At Drive Forward we believe independent drivers are critical to the success of rideshare and app-based delivery services.  Our goal is to support independent driver’s businesses through education and advocacy. By educating and empowering our members we give all drivers a voice to help shape their communities and keep Washington in motion. We’re a strong community that supports each other’s success and we demand a say in our future.
 
Here’s why we want to stay in control of our own businesses:

  • We want to stay in control of our businesses
  • We want the freedom to choose which platforms to partner with
  • We demand the flexibility to drive when and where we want
  • We control our earning power and the ability to meet our individual goals
  • We use innovative technology to connect riders with safe, dependable transportation and delivery services

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