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In what many consider to be a predictable outcome, the minimum wage law that the Seattle City Council passed September 2020 has forced Uber and Lyft to raise prices on riders. Initial estimates indicate Uber would raise prices as much as 25% and could end up raising prices as much as 50%.
Now the City Council is attempting to increase minimum wage for other gig workers that work for companies like Doordash and Uber Eats. A similar increase in customer prices is likely to ensue to cover the additional cost. Less orders will be fulfilled, and gig workers will have less work.
Uber, Lyft and the other transportation networks (TNC’s) in the gig worker economy are successful because they provide a market driven, convenient, needed service at low cost.
The city’s involvement is an overreach, as gig worker service costs and wages should be market driven.
The advent of ride-sharing services such as Uber and Lyft have provided millions of Americans with more cost-effective transportation that, unlike the vast majority of services offered by most public transit agencies, are not bound by fixed routes or timetables. This gives the consumer more flexibility to acquire a personalized service that fits his or her unique needs.
Services like Doordash and Uber Eats have been invaluable during the pandemic to provide cost effective food delivery and much needed income for workers unable to work full time due to government mandated lockdowns.
The increase in minimum wage will translate directly to increased costs for services.
With Seattle’s proposed new increase to the minimum wage, the only winners are bureaucrats and politicians – not Uber, Lyft, Doordash or Uber Eats and certainly not their employees or the riders that use their service.
