This post was updated Oct. 23 at 12:44 p.m.
The Los Angeles City Council may impose a minimum wage as high as $30 per hour for Uber and Lyft drivers.
The council voted unanimously Tuesday to commission an independent study of wages and expenses for drivers of Transportation Network Companies, including ride-hailing companies such as Uber and Lyft.
The vote followed a motion, introduced Oct. 8 by City Council President Herb Wesson Jr., to set a minimum wage of at least $30 for these drivers. Such a policy would follow a similar wage floor of $17.22 per hour after expenses that New York City approved in 2018 and a policy proposed in August in El Monte, California.
The initial motion argued that the city has policy and financial interests in setting a minimum wage because an increasing number of riders are likely to use social services to make ends meet.
“TNCs continue to grow and fundamentally change the mobility industry,” the motion read. “It is our responsibility and duty as the elected leaders of the City of Los Angeles to take action and ensure that TNC drivers receive basic protections and a living wage.”
Paul Koretz, council member for City District 5, which includes Westwood, also signed on to the initial motion, along with council members Nury Martinez and Curren Price Jr.
This council’s action does not commit to a $30 minimum wage, but it does call for a recommendation from the chief legislative analyst for the city on how to set a minimum wage with a goal toward $30 per hour, according to a report by the Economic Development Committee that the council approved.
The $30 minimum wage includes a base $15 per hour wage and an additional $15 per hour to cover driver benefits and operating expenses, such as maintenance and fuel.
The council’s action is also an attempt to leverage and enforce California Assembly Bill 5, which was signed by Gov. Gavin Newsom on Sept. 18. AB 5 redefined independent contractors, potentially reclassifying many workers as employees.
TNC drivers are usually considered independent contractors who are part of the so-called gig economy. Unlike employees, contractors have less worker protections such as a minimum wage, paid sick days and health insurance benefits.
Most ride-hailing drivers in Los Angeles rely on their work for Uber or Lyft as a primary source of income, according to a 2018 UCLA Labor Center study. The study also found that 44% of ride-hailing drivers struggle to pay for their work expenses, including fuel, maintenance and insurance. Additionally, 55% of drivers reported they would prefer having a set hourly wage.
Uber and Lyft said they supported a fair and impartial earning study but expressed concern at the speed at which the motion reached a vote, according to the Los Angeles Times.
While a Lyft spokesperson reportedly told LA Times the company supports a statewide wage floor, an Uber representative reportedly conveyed concern for allegedly biased assumptions about worker earnings that led to this council action.
For now, the chief legislative analyst must work with the city administrative officer to produce an independent study, which should include an analysis of how TNC drivers affect traffic congestion and the city economy.
The chief legislative analyst must then work with the city administrative officer and City Attorney Mike Feuer to review TNC minimum wage policies across the country and provide a recommendation for how to best enact such a policy in Los Angeles.