SEATTLE – Starting New Year’s Day, if you take an Uber ride in Seattle, you will have to shell out 25% more.
The rideshare company is increasing its prices — because of a new minimum wage law in the Emerald City.
Alex Nachman typically drives 4 to 5 hours a day for Uber. He’s one of 33,000 licensed rideshare drivers in King County.
Friday, Jan. 1, a new law takes effect in the City of Seattle raising the minimum wage up to $16.69 an hour for big companies like Uber.
“We are really happy to see that,” said Ahmed Mahamud, an Uber driver from Federal Way.
He’s driving 10 to 12 hours a day to support his 9 kids
“Most of the time, Uber used to get more from customers, and they’d pay us less money,” said Mahamud. “If we come to the minimum wage, we are all happy.”
In response to the higher minimum wage law, Uber increased fares 25% in the City of Seattle. And by April, rates may be as much as 50% more.
“For the average rider, that means your $4 to $5 ride within the Downtown area or Downtown to South Lake Union, is now going to be $7, $8, $9,” said Michael Wolfe, Executive Director of Drive Forward Seattle, an advocacy group for drivers.
Harry Hartfield, an Uber spokesman shared this response:
“We know any price increase is frustrating for customers, and we will continue to look for new ways to reduce prices while complying with the city council’s laws.”
“Having a minimum wage standard is important,” said Nachman.
Nachman and Drive Forward Seattle support a minimum wage standard. But, they say increasing rates for riders is not the way to go.
“When April 1 rolls around, you’re likely going to see a ride to the airport cost $70 when it used to be about $40,” said Wolfe. “So that’s a dramatic increase. What it also means–this now becomes a service for the wealthy of Seattle.”
Wolfe and others say the price increases are dramatic and will lead to a drop in demand for Uber rides.
“With fewer rides, even with a higher pay rates, you are not going to necessarily make any more money once you look at bottom line,” said Wolfe.
“People will ride less. I think this is not a good time for rate increases due the pandemic due to people having less money and being more concerned with their finances,” said Nachman.
No word yet if Lyft will follow in the footsteps of Uber.
For now, Uber Eats is not impacted by this new rate hike.