On January 1, 2023, a new law designed to regulate ride-sharing companies, such as Uber and Lyft, will come into effect in Washington state, making it the first state in the nation to pass a law establishing a minimum payment requirement and sick leave benefits for ride-hailing drivers.
This law sets out a series of rules and regulations that ride-sharing companies must follow to operate within the state. Here’s how it might affect riders and ride-sharing drivers.
The new law requires that drivers be paid at least $1.17 to $1.38 per mile, $0.34 to $0.59 per minute, and $3 to $5 per trip. This is going to be a major increase in the current pay rates. These amounts will be adjusted annually to align with the state’s minimum wage and do not include tips. These rate hikes will increase operating costs for ride-sharing companies, which will in turn increase fare prices.
In addition, ride-hailing companies will be required to provide sick leave hours to their drivers. Sick leave is a benefit that allows employees to take time off work when they are sick or caring for a sick family member. However, in the case of ride-sharing companies, the implementation of sick leave policies has caused controversy. According to earnest.com, the average income of an Uber driver is $364 per month, with over 50% of drivers working less than 15 hours per week. Many ride-hailing drivers see this as a supplemental income rather than their primary job. For them, it’s a way to make quick cash, and they may not necessarily be looking for benefits.
The nature of the relationship between ride-sharing companies and their drivers is often more complex than a traditional employer-employee relationship. Drivers may work for multiple companies and have a high degree of flexibility in when and how they work. Policies like required sick leave coverage are likely to affect their pay and introduce unnecessary bureaucratic burdens.
The new requirements related to driver deactivation will make it more difficult to remove drivers who provide poor service or commit driving violations from the platforms. If drivers who provide poor service are not held accountable, it may lead to a decline in customer satisfaction.
Despite being treated as independent contractors, Washington state’s gig workers are now subject to unnecessary requirements that are not applicable to their status. It is unfair to burden ride-sharing companies with the protections and responsibilities typically afforded to traditional employees when the workers are not actually considered employees. It would be more appropriate to leave these companies to operate as they see fit.