(Reuters) – The Seattle City Council passed a minimum pay standard for drivers for companies like Uber Technologies Inc <UBER.N> and Lyft Inc <LYFT.O> on Tuesday.
Under the ordinance, effective January, the drivers will now earn at least $16.39 per hour – the minimum wage in Seattle for companies with more than 500 employees.
Seattle’s law, modeled after a similar regulation in New York City, aims to reduce the amount of time drivers spend “cruising” without a passenger by paying drivers more during those times.
City officials argue this should prevent Uber and Lyft from oversaturating the market at drivers’ expense, but the companies say it would effectively force them to block some drivers access to the app. Both Uber and Lyft have locked out drivers in response to the NYC law.
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