Seattle's Minimum Wage Laws Backfired on Uber and Lyft. Now the Union Wants To Limit Drivers.
· Reason
In recent years, progressive locales like Seattle have experimented with minimum wage laws for rideshare and food delivery drivers. These laws have led to surging prices for rides and delivery, reduced demand for trips and orders, and no evidence of higher take-home pay for drivers.
As demand for trips has plummeted in the wake of the wage hikes, more rideshare drivers are finding themselves working longer hours to achieve the same number of rides as before. Instead of fixing the root of the problem, a union representing Seattle rideshare workers has a new solution: Limit the number of people who can work as Uber drivers.
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According to the Drivers Union, which represents Lyft and Uber drivers in Washington State, there is a severe glut of rideshare drivers on the road in the Emerald City. The union bases this on a new report it released (with funding from the state Department of Ecology), which concludes that "a majority of miles driven by Uber drivers are now without a passenger."
The report's topline findings include an increase in "deadheading" and "empty miles" in which rideshare drivers are driving without a passenger on board, as well as an increase in the number of drivers that is purportedly "7 times faster than trip growth." In addition to lower driver pay, the report concludes that "deadhead" miles are also causing more air pollution and congestion in the city.
The union's recommendations are to call for "a pause in onboarding new drivers until a reduction in unnecessary deadheading miles is achieved," as well as suggesting "rules to maintain a balanced market where increases to driver supply don't continue outpacing trip growth."
While the report is dressed up in the language of "deadheading" and climate change, it's little more than a thinly-veiled attempt to do what unions so often do: Limit the labor supply to lock out non-union members. The Drivers Union also conveniently ignores the reason behind the increase in "empty miles," which is the result of Seattle's aggressive pursuit of minimum wage laws for gig work.
In 2020, Seattle became the second city in America to pass a minimum wage law for rideshare drivers. It expanded the law to cover gig-based food delivery platforms like UberEats and DoorDash in 2024. While driver pay was supposed to rise, the primary effect of these laws was a dramatic drop in the number of rideshare and delivery order requests.
After the rideshare minimum wage law, rider fares increased by an average of 40 percent, with some trips climbing by up to 50-60 percent. According to a recent analysis by NetCredit, Seattle is now the most expensive city in America to hail an Uber ride, with a 30-minute ride costing an average of $60. (By way of comparison, Washington, D.C., which lacks a minimum wage law for rideshare drivers, averages just over $33 for a 30-minute trip).
In addition to the minimum wage, the city also levies a 51-cent fee onto every rideshare trip in the city to pay for everything from affordable housing to various transportation projects. Unsurprisingly, as the cost for Ubers went up in the face of these add-on costs, the demand for rides went down.
In fact, Uber itself has sounded the alarm about this reality. In the aftermath of the city's 2024 minimum wage law for gig-based food delivery, the company warned: "Reduced demand creates more of this open time—with fewer trips being requested, drivers must wait longer between trips." In other words, Economics 101 told us all along that surging Uber prices on account of minimum wage mandates would suppress demand and lead to more idle time for drivers.
But instead of fixing the actual root of the problem, unions now want to lock new drivers out of the market entirely. A better bet would be to revisit and repeal Seattle's minimum wage ordinance and return to a freer market.
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