A proposed tax on Uber and Lyft rides in Seattle could help fund affordable housing units and transportation projects in the city, Mayor Jenny Durkan announced this week.
Durkan proposed the 51-cent tax on rideshares, on top of an existing city fee on Uber and Lyft of 24 cents per ride. The proposal would also require Seattle drivers be paid a minimum wage and get compensation for benefits and expenses effective July 2020.
But it is facing pushback from rideshare companies, which say the tax would raise prices for riders and hurt those in under-served communities.
Under the proposal, the city is predicting by the end of 2025, the new revenue will have resulted in $56 million to help fund the Center City Connector streetcar. More than $52 million generated would go toward building more than 500 housing units near transit, meant for people making between $15 and $25 per hour.
Another $17.75 million generated would go toward the creation of an independent Driver Resolution Center, to help provide an independent arbitration and appeals process for drivers. The center would also give education services on driver's rights.
"In this rapidly changing economy, we need to make sure our hard-fought worker protections are available for our Uber and Lyft drivers, who work long hours to help all of us get where we need to go," Durkan said in a statement.
"This proposal is about ensuring Seattle grows into the city we want to be. Being a city of the future isn't just about the incredible gains of the new economy. It's about being a city where all our workers are treated fairly, our communities can afford to live where they work, and everyone, regardless of income or ability level, has access to high-quality transit."
In a statement, an Uber spokesman said the proposal to increase the tax on ridesharing will "raise prices for riders and decrease trips for drivers."
"We support the creation of a guaranteed minimum earnings standard for drivers, and have engaged in good faith with the Mayor's office and labor leaders for several
months on this issue in hopes of reaching a compromise," Uber spokesman Nathan Hambley said.
"We believe that any rideshare proposals should be developed based on broad input from the entire rideshare driver community in Seattle."
Lyft said it supports a minimum earnings guarantee for drivers, but went after the mayor's proposed tax, saying it will "hurt the under-served communities that rely on affordable rideshare most."
"Fifty-one percent of Seattle Lyft rides start or end in low-income areas, and the Mayor's regressive tax would increase the fees they already pay by 300 percent, making it the most taxed rideshare city in the country," Lyft spokeswoman Lauren Alexander said in a statement.
"Drivers will also lose, as their earnings decrease with fewer overall rides. Instead, the Mayor should utilize the surplus the City already has under the current fee structure and combine it with a more equitable and effective approach, comprehensive congestion pricing, in order to fund her larger transportation and affordable housing goals."
The proposal will be discussed next week by City Council as part of the mayor's budget proposal.