Thursday, April 5, 2018

"Seattle considers raising rates for Uber and Lyft rides to boost driver compensation"

Well this doesn't fit Uber's business plan at all.
But if it comes to pass, Seattle is probably the place for raising rates.

First off and most importantly, with the giant engine of Amazon funneling money from around the world into the city, there is more room for elasticity in both wages and costs.
The boom is huge. Using construction as proxy you get stories such as Construction Dive's February 1 piece:

Seattle crane count falls, still leads nation
Dive Brief:
  • Seattle has more construction cranes than any other city in the U.S., reported The Seattle Times. But the number dropped to 45, the lowest figure since July 2015 — a 22% decrease from six months ago. Toronto was the North American crane standout with 88.
  • The latest Rider Levett Bucknall (RLB) Crane Index report, according to the newspaper, found that Seattle was the only major U.S. city to lose cranes among the metros it tracks, which could signal the cooling of the city's years-long building boom. However, RLB noted in its report that Seattle's construction market was still "healthy," particularly in the South Lake Union area, which is home to many tech companies including Amazon.
  • A third of Seattle's cranes, according to Curbed Seattle, are serving mixed-use projects, which are popular because of the higher allowable floor-area ratio, followed by residential and education-related construction projects....MORE
Got that? A city of 700k is number one in the U.S. And it's held that position for 2 1/2 years!
And it is a factor overlooked or ignored in almost every economic analyses of Seattle policy decisions.

Secondly, the city council looks very favorably on the plight of the Uber driver.*
Here's the headline story from GeekWire, April 2:
Uber and Lyft rides could become more expensive in Seattle. The city is considering setting a minimum fare per ride and other regulations in an effort to ensure drivers are compensated fairly.
The Seattle City Council is expected to introduce a resolution this week to start the process toward enacting new regulations that could change how on-demand transportation companies operate in the region. The city will explore a minimum base fare of $2.40 per ride for Uber and Lyft and a minimum compensation for all independent contractors, which includes drivers for transportation networks.
Both companies already have base fares of $1.35 in Seattle.

Uber is responding to the resolution with a show of force. The company launched a petition against the proposed changes and emailed it to Seattle-area Uber riders Monday. The petition exceeded its goal of 5,000 signatures within a few hours. Uber says that the City Council intends to go beyond the minimum fare outlined in the resolution by increasing the per-mile rate, based on early discussions.
“Nearly doubling the per-mile rideshare rate in Seattle will significantly increase costs for riders,” said Alejandro Chouza, Uber general manager for the Pacific Northwest, in a statement. “Research and our experience shows this will mean fewer trips and therefore less work for drivers. Regulating fares could also eliminate the financial incentive to share rides and potentially put more drunk drivers on the road.”

Teamsters Local 117, the labor group that represents taxi and truck drivers, as well as other workers, helped the city craft the resolution. The group also worked with the City Council to create Seattle’s landmark law that allows Uber and Lyft drivers to unionize. That law passed in 2015 but has not gone into effect because it is stalled by lawsuits....MUCH MORE
*Some of our previous posts:
March 2017 
Uber Gears Up to Block Bid to Form a Union in Seattle
This always seemed like a bigger story than most of the media was treating it as. Now that seems to have changed....
Dec. 2015
"Seattle is first city in nation to give Uber, other contract drivers ability to unionize"

Dec. 2014
"What Uber Hath Wrought: The Coming Digital Labor Movement": 

Then there's July 2016's
Dear Teamsters: It Looks Like Uber Was Trying To Dig Up Dirt On The Seattle Local

Here's how the Teamsters reacted to stress in 1934; the management guy heading for terra firma  died almost instantly of a crushed occipital lobe:

And many more. Use the 'search blog' box if interested.