Seattle passes minimum pay law for Uber, Lyft drivers

SEATTLE, Washington -- Seattle is raising the minimum pay for Uber and Lyft drivers in an attempt to lessen the number of cars in the city.

The city council approved a new law Tuesday that would make ride-share companies such as Uber and Lyft pay their drivers the $16 minimum hourly wage.

The measure uses a formula for drivers' compensation so they will be paid fairly when they're less busy.

RELATED: Uber likely to shut down temporarily in CA over driver ruling, CEO says

Uber CEO Dara Khosrowshahi says the San Francisco-based company will likely shut down service temporarily in California if it's forced to classify its drivers as full-time employees.

Under the new law, drivers will get an hourly pay of $30 before expenses.

The pay increase is supposed to incentivize Uber and Lyft to keep their drivers busy with passengers instead of flooding the city with more cars.

The law is modeled after a similar one in New York, which was the first city to pass such a measure.

In a recent letter, Uber said New York's policy resulted in fewer rides and higher prices for passengers.

Lyft called Seattle's plan flawed and said it would destroy jobs.