The US city of Seattle has announced a minimum wage for Uber and Lyft drivers, a move criticised by the ride-hailing companies as potentially destroying thousands of jobs.

The northwestern city is the second in the United States to impose such measures after New York in 2019.

"The pandemic has exposed the fault lines in our systems of worker protections, leaving many front line workers like gig workers without a safety net," Seattle mayor Jenny Durkan said in a statement Tuesday.

The minimum wage "guarantees that drivers will receive fair pay and can provide for themselves and their families," she said.

From January, rideshare drivers in Seattle will need to earn at least $16.39 per hour.

Uber, in a letter to the Seattle city government last month, said that the same policy in New York had "led to fewer work opportunities for drivers and higher prices."

Rideshare rivals Uber and Lyft are angered at a minimum wage for drivers in Seattle
Rideshare rivals Uber and Lyft are angered at a minimum wage for drivers in Seattle AFP / Robyn Beck

"Thousands of New York City drivers lost access to work, after the policy resulted in restrictions in how drivers access our app," the company said, adding that new drivers were now not allowed to enroll in New York.

Prices had risen 30 percent in the first year and the regulations had triggered large street protests, Uber said.

Lyft said in a statement that Seattle's "plan is deeply flawed and will actually destroy jobs for thousands of people -- as many as 4,000 drivers on Lyft alone -- and drive rideshare companies out" of the city.

Uber said it had no current plans to challenge the new law in court.

The two companies are battling a California law requiring "gig workers" to be made employees who are eligible for unemployment, medical and other benefits.

In August, Uber and Lyft backed away from threats to pull out of California after a court granted them a temporary reprieve from having to reclassify drivers.