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Seattle City Council recently enacted minimum payment ordinance For app-based workers, such as those who handle deliveries through apps like DoorDash, Uber Eats, and Instacart, it’s hurting the workers they’re supposed to help.
In 2022, seattle city council It enacted a first-of-its-kind ordinance aimed at ensuring app-based delivery drivers receive minimum wage plus tips and expense compensation. The law went into effect last month and effectively requires companies to pay a minimum of $0.44 per minute and $0.74 per mile, or a minimum of $5 per offer, whichever is greater. .
In fact, this has forced companies like DoorDash and Instacart to pay independent delivery drivers upwards of $26 an hour to comply with regulations and cover costs. That amount far exceeds Seattle’s regular minimum wage of $19.97 an hour, forcing these companies to pass some of that cost on to the customers who order them.
Gary Lardizabal, a Seattle resident who has been delivering for Uber since 2016, told FOX Business that his delivery business has seen a dramatic jump in the first week of the law’s implementation as consumers balk at large orders. He said he was depressed.
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The Seattle City Council enacted new minimum payment laws for app-based “gig workers” last month, and delivery drivers and app companies are reporting a drop in orders. (Photo by George Rose/Getty Images/Getty Images)
“My experience in downtown Seattle was Rapid growth on Amazon “Orders to drivers and couriers are down, and restaurant business is definitely down,” Lardizabal said in an interview.
“Everywhere you look, you see fewer bags on delivery trays and racks. Chipotle used to have bags on top of bags, but that’s gone,” Radibazar said. Told. He said one restaurant received an average of 170 orders a day through gig companies before the ordinance took effect, but as of 6 p.m. last Thursday, it had only received 16 orders that day.
He said Seattle’s high cost of living and high gas pricesthe reduced income from infrequent deliveries may not be enough to survive on its own and some drivers and couriers may be forced to exit the business altogether.
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Uber Eats said it has seen a steady decline in delivery demand since the ordinance went into effect. (Photo credit: Jonathan Raa/NurPhoto via Getty Images / Getty Images)
Tammy Hetrick, president and CEO of the Washington Food Industry Association, told FOX Business: grocery store We have also noticed a decline in delivery orders, many of which are placed by older residents and working families.
“We have stores reporting about a 10% drop in deliveries,” Hetrick said. “What we’re struggling with is, you know, our profit margins are 1 to 2 percent and the cost of the product is going up a lot just to get it to the stores. , we’re trying to take on that challenge and then reap the benefits by delivering those products to people and families who need them. ”
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DoorDash began paying Seattle Dashers $26.40 an hour to cover costs associated with the new ordinance. (Andrew Haller/Bloomberg via Getty Images/Getty Images)
The delivery app for gig workers said it alerted the Seattle City Council, which has had nearly all members replaced since the ordinance was first enacted, about the issue. impact of law He pointed to the economic impact on delivery drivers, consumers, restaurants and grocery stores.
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| Uber | Uber Technologies Co., Ltd. | 77.22 | +8.23 | +11.93% |
| dash | Door Dash Co., Ltd. | 118.41 | +2.02 | +1.74% |
| cart | Maple Bear Co., Ltd. | 24.99 | -2.86 | -10.27% |
Uber said in a statement to FOX Business: “Although the new law has only been in effect for four weeks, customer demand has steadily declined, resulting in couriers working less than before the law. Wait times are now 30% longer on average.” has come into force. ”
DoorDash told FOX Business: “Under this new law, Dashers delivering in Seattle will now earn at least $26.40 per hour, not including tips, with additional pay based on the distance they drive while delivering. “This is far more than the minimum wage in Seattle.” “We warned the previous City Council that it would likely be necessary to introduce new fees to offset some of the costs of this unprecedented policy. Our hope is that the newly elected The City Council has a seat at the table for more effective solutions.” For Seattle dashers, sellers, and consumers. ”
“We warned the previous City Council that this new law would have unintended consequences for the city. Seattle shoppers“Now that the law is in place, costs for our customers have increased and we are seeing fewer lots available to shoppers on average,” Instacart told FOX Business. We continue to strive to provide the best experience for our customers and shoppers in Seattle, but the new City Council will take the voices of shoppers, customers, and retailers seriously and make common sense changes to this law. I hope so. ”
Instacart said it expects the new Seattle City Council to consider changes to its minimum pay ordinance for app workers. (David Bonaldo/SOPA Images/LightRocket via Getty Images/Getty Images)
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The Seattle City Council did not respond to requests for comment.
Seattle Public Relations Officer labor standards The department told KIRO 7 it is “too early to assess” the ordinance’s impact. The law has been in effect for less than a month, but “the city will continue to monitor these and other metrics. The law does not require businesses to raise prices for customers. No,” he added.
“I mean, I don’t know how much more data they need. Maybe they need to see us homeless on the streets,” Lardizabal said of the council’s reluctance to repeal the law. “Maybe. This is not a living wage.” “It hurts us, it hurts consumers. It’s going to cause restaurants to close. Please back off.”
