The Oregon State Legislature is currently considering SB1166, a bill which is purported to establish regulations of rideshare companies which will raise rideshare driver pay and provided needed benefits to drivers such as paid sick leave and protection from unwarranted deactivation from rideshare platforms like Uber and Lyft. Under the scheme SB1166 proposes drivers certainly will gain the benefits of paid sick leave and protections from unwarranted deactivations but will not see any significant raise in earnings.How do we know this? You just need to look to your northern neighbor Washington State, specifically the City of Seattle and King County. The organization I lead, Drive Forward, has been serving Washington rideshare drivers and other gig-workers for a decade now. I myself was a rideshare driver in the Seattle area until the pandemic in 2020. In 2021 the City of Seattle adopted the same scheme being put forth in SB1166, and in 2023 Washington State also adopted it. Resoundingly our members, of which we have over 2,500 across Washington, opposed this scheme because we knew the increases in pay were so dramatic that it would price out most consumers from using rideshare as a reasonably priced alternative to driving or transit. Well, our members now complain of how little their earnings are and how few trips are available. To them, it seems the only thing that has risen is prices to the consumer. However, you shouldn’t take our members word at face value, let’s look at some data.
Fortunately, King County, where Seattle is located, collects data on the number of rideshare trips taken annually and from that we can mathematically prove what our drivers are experiencing. In 2019, the peak of rideshare demand in Seattle and King County, 36.8 million trips were given by rideshare drivers. The approximate pay rates for Seattle/King County drivers in 2019 was $1.08 per mile plus $0.18 per minute. In 2023, the year the new earnings standards law took effect statewide, and the latest year we have data for, only 21.5 million trips were given by rideshare drivers in Seattle and King County a drop of 42%. The mandated pay rate in 2023 was $1.38 per mile and $0.59 per minute, increases of 27.8% and 227.8% respectively. When applied to a sample trip from Downtown Seattle to Seattle-Tacoma International Airport, a journey that midday on a weekday takes about 25 minutes and covers about 14 miles, in 2019 that trip would have cost the consumer about $35 and paid the driver $19.62. In 2023 that same trip would have cost the consumer about $70, a 100% increase, and paid the driver $34.07 a 73% increase.
On the surface this all sounds great, drivers are earning 73% more and demand only dropped 42%. Surely drivers are better off, right?
Well, let’s not forget the effects of inflation on these increased earnings. Adjusted for inflation that trip from downtown to the airport in 2019 earned the equivalent of $23.91 in 2023. Once adjusted for inflation the per trip pay increase on this sample trip is only 42.5%, which still sounds pretty good. Now, let’s find out how this plays out across a larger example than just one trip. In 2019 if a driver were to have completed 100 trips from downtown Seattle to the airport in a given month, they would have earned $2,391.00 in 2023 adjusted dollars. In 2023 because of the 42% drop in demand that same driver could only reasonably expect to have completed 58 such trips in a month, earning only $1,976.06 a decrease in earnings of 17.4%. As you can see the experiences of our members are correct, there are fewer trips and less money overall.
We opposed the type of earning standards scheme in SB1166 when it was proposed in Washington, and we continue to oppose any state from adopting these schemes now. They’ve been crafted by people who do not understand the economics of the industry and have stifled opportunity for everyday people to earn a living in a flexible environment. If the Oregon Legislature really wanted to help rideshare drivers, they would adopt a Paid Sick and Safe Leave plan and make the companies pay into all the state-run social safety net programs like workers compensation and unemployment insurance, but they should go back to the drawing board on setting an earnings standard, to enact a standard that ensures fair pay without severely deteriorating consumer demand.
Michael Wolfe is the Executive Director of Drive Forward Seattle and has worked part-time as a rideshare driver since December 2015. Before taking on his current role, he served on Drive Forward’s Member Advisory Committee and brings over 15 years of experience in Travel and Hospitality Management, along with more than a decade of community organizing and issue advocacy work.