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Minimum pay law for Uber and Lyft drivers proposed in Chicago

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CHICAGO - A Chicago alderman has proposed an ordinance that would establish the minimum pay of ride-share drivers in the city, drawing concern from companies like Uber and Lyft that say such regulations would hit riders’ wallets the hardest.

Ald. Roderick Sawyer, 6th, introduced the measure that would make sweeping changes to the city laws that govern ride-share services — including driver compensation. His proposal was lauded by a gig workers’ group that said it was time their drivers got more protections after weathering two years of the COVID-19 pandemic.

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Chicago Gig Alliance member and Lyft driver Johnnie “JC” Muhammad stands outside his home in Chicago Friday. “We’re not trying to wrest power and control away from ride-share companies,” Muhammad said.

“We’re not trying to wrest power and control away from ride-share companies,” Chicago Gig Alliance member and Lyft driver Johnnie “JC” Muhammad said. “They’re going get their money. The question is whether or not they’re going to share their money. Right now drivers have become dispensable, and that’s part of the problem.”

But the Illinois Coalition for Independent Work, which represents the interests of ride-share companies including Uber and Lyft, argued drivers are current enjoying a boon in income and that Sawyer’s legislation would hurt riders.

“Such a measure in Chicago could make ride-share unaffordable for riders when they can least afford it and as families continue to struggle with historic inflation,” a spokesperson for the coalition said in a statement.

Sawyer did not respond to requests for comment this week.

Under Sawyer’s proposal, a driver would be entitled to a minimum per-minute and per-mile amount, or a minimum trip amount of $5, whichever is greater. The starting minimum per minute would be 30 cents, and the minimum per mile would include a $2 base and a $1.20-per-mile rate. Each year, the per-minute and per-mile rates would be adjusted for inflation.

Drivers would also receive at least 80% of what their rider paid, according to the proposed ordinance. Muhammad, a 55-year-old from Grand Crossing who began driving for ride-shares about five years ago for extra income, said that provision would make the biggest difference for his livelihood.

Jackie Lomax, who originally wanted to help her own daughter achieve her dreams, has been helping girls chart their own courses into science, technology, engineering and math for more than a decade.

“The companies have so much discretion, and they control so much about how the industry is run that it’s disruptive to some of the ride-share workers’ income,” Muhammad said. “This will go a long way to stabilizing the industry.”

Other parts of Sawyer’s legislation would prohibit ride-share companies from increasing regular fare rates more than once a month — though they can still apply surge pricing when warranted. Companies cannot take tips or cancellation fees from the driver, either.

Lastly, the proposed ordinance requires a process for investigating drivers who face discipline including suspension for customer complaints.

The Illinois Coalition for Independent Work cited a new Seattle law requiring a minimum wage for ride-share drivers in its criticism of Sawyer’s legislation. According to The Seattle Times, Uber had responded by announcing it would raise prices in that city by about 25% starting in 2021, when the law went into effect.

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