May 1, 2024 - News

Seattle considers flipping delivery driver law

Illustration of a paper lunch bag with a post it note on the side showing a sad face.

Illustration: Aïda Amer/Axios

The Seattle City Council is considering overhauling its newly adopted PayUp wage standard that boosts driver pay and mileage reimbursements from app delivery companies.

Why it matters: The law, which went into effect in January, was intended to ensure that delivery apps like DoorDash, Uber Eats and Instacart pay their workers at least minimum wage.

  • But a $5 fee tacked onto orders increased customer costs and decreased business for some restaurants and delivery drivers, per Eater Seattle.

Driving the news: In introducing a reconsideration bill last week, Council President Sara Nelson said the result of rushing such worker protections was the "implementation of a flawed law."

  • "The question is: What are we going to do about it?" she said.

How it works: The proposed changes would cut hourly and per-mile rates, change how pay is calculated, and roll back regulatory requirements, per The Seattle Times, with the goal of getting companies to cut recently added fees.

  • App-based delivery drivers are classified as independent contractors, so they aren't covered by minimum wage laws or certain other worker protections.

Friction Point: Labor advocate Hannah Sabio-Howell of Working Washington and Fair Work Center told Axios the proposed changes are a response to pressure on the city by delivery apps such as DoorDash, Grubhub, Uber Eats and Instacart.

  • City of Seattle records show that in March alone, DoorDash spent more than $130,000 on lobbying efforts to repeal the PayUp ordinance, per a KING 5 investigation.
  • If the app-based companies want to repeal the minimum wage, they need to first release the internal data that justifies their fee increases, which they have refused to do, said Councilmember Tammy Morales in a statement.

What they're saying: "We should not repeal labor protections every time billion-dollar corporations hike fees on customers without justifying those fee increases," Morales said. "That would allow corporations to extort our political process."

The other side: A spokesperson for DoorDash, which reported revenue of $2.3 billion in its most recent quarter, said in an email to KNKX Public Radio that Seattle's new pay standards for workers are excessive and that the company introduced fees to offset labor costs.

  • Spokespeople for both Instacart and Uber Eats also told KNKX the new pay standards were unbalanced.

What's next: The proposed bill will next be discussed on May 16.

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