LA City Council Proposes $30/Hr. Minimum For Uber And Lyft Drivers

Rideshare drivers show up at Los Angeles City Hall on Tuesday, Oct. 15, 2019 to call for a higher minimum pay. (David Wagner/KPCC/LAist)

The city of Los Angeles would require Uber and Lyft to pay their drivers at least $30 an hour under a proposal taken up by the City Council on Tuesday.

Not all of that would go into the drivers' pockets. Under the proposal, drivers would earn $15 in minimum hourly pay, plus another $15 to cover expenses such as gas, car insurance and maintenance.

More than 100 drivers packed council chambers to support the proposal, which is in the initial stages of discussion.

Drivers said pay cuts from rideshare companies have left them struggling to afford L.A. rents on top of rising gas prices and necessary vehicle repairs.

The motion put forward by Council President Herb Wesson and three other council members calls for "basic protections and a living wage."

It goes on to say rideshare platforms "may be creating safer mobility options for residents, but their business model is subverting city policies put in place to protect the most vulnerable members of our community and weakening our social safety net."

According to a study from the Economic Policy Institute last year, drivers take home an average of $9.21 an hour after expenses.

"These companies are able to do basically whatever it is they want," said James Hicks, a rideshare driver who has been organizing for the past year with the gig workers group Rideshare Drivers United. "They can make us accept fees of 60 cents per mile, and if we don't accept that ultimatum, then we're basically fired from the platform. There's no regulation, and that needs to change."

Before council members vote on a final ordinance, they're requesting an independent study of average wages and expenses for drivers in the city.

RIDESHARE COMPANIES RESIST NEW CALIFORNIA LAW

An Uber spokesperson said the company is concerned that the commissioned study would be "based on potentially false assumptions that will fundamentally bias its conclusions, and ultimately will lead to higher costs for riders and fewer rides for drivers."

A spokesperson for Lyft said the company supports a guaranteed wage floor for drivers. But she said, "We believe a statewide approach is most appropriate."

The city's proposal comes on the heels of a statewide bill recently signed by Gov. Gavin Newsom, which requires rideshare companies to reclassify drivers as employees rather than independent contractors.

That bill, AB5, aims to guarantee drivers and other gig workers protections such as the state's minimum wage — which will rise to $15 an hour by 2022 for large companies — plus reimbursement for employee expenses.

Lyft and Uber have pledged $60 million toward a ballot initiative aimed at defeating AB5. And Uber's chief legal officer has said the company does not plan to reclassify its workers, even after the new state law kicks in at the start of 2020.

Council members say given that uncertainty, the city needs to establish its own policy.

"The city isn't taking any chances when it comes to protecting our rideshare drivers," said Michael Tonetti, spokesman for City Council President Wesson.

Los Angeles isn't the first city to consider $30/hr. minimum pay for rideshare drivers. The nearby city of El Monte began moving in that direction earlier this year, though it hasn't yet taken a final vote on the proposal.

As in El Monte, half of the city's proposed $30/hr. pay would, in theory, go toward covering the out-of-pocket cost of driving. But many drivers may not actually be spending that much for every hour they're on the road.

Harry Campbell, founder of the blog The Rideshare Guy, has estimated hourly expenses to be in the $3 to $5 range.

"Of course, it all depends on the vehicle you're driving," Campbell said. "I think it would be fair for rideshare drivers to get minimum wage plus expenses, but my hope is that the city does some further analysis to really figure out what it costs to be a driver."

$30 AN HOUR — BUT FOR WHOM?

It's unclear who would be covered by the new minimum pay rules, if enacted.

The city estimates there are 250,000 rideshare drivers in Los Angeles, completing close to 9 million trips each year. But staffers could not yet say whether the $30 hourly minimum would apply to any driver completing trips within city limits, or only to those who live in the city.

Driver and organizer James Hicks lives outside the city's borders. But he said drivers need to fight for a living wage wherever they can. He said he's not too worried that higher pay would lead to lower demand from riders.

"It's a convenience. And people are willing to pay for convenience," Hicks said. "I think that people will continue to use the platform, even if it gets a little more expensive."