Seattle greenlights minimum wages for app-based delivery drivers
May 31, 2022, 5:50 PM | Updated: Jun 1, 2022, 6:54 am
The first-of-its-kind legislation PayUp will guarantee app-based delivery drivers a minimum wage while protecting employment flexibility.
PayUp now requires companies to pay-per-minute and per-mile rates to delivery drivers on apps like DoorDash, UberEats, and Grubhub. The rates would begin when drivers accept an order to help the drivers — who are contract workers, not employees — earn the city’s $17.27 minimum wage and receive the standard mileage reimbursement set by the Internal Revenue Service.
Seattle considers ‘Pay Up’ policy to increase wages for gig workers
The Seattle City Council unanimously passed PayUp legislation Tuesday. The legislation, sponsored by councilmembers Lisa Herbold and Andrew Lewis, would, among other things, make Seattle the first city in the nation to provide app-based delivery drivers a minimum wage.
“We live in an expensive city; many delivery workers earn below the minimum wage after expenses and tips are accounted for,” said Herbold in a city council meeting. “App-based work is one of the fastest-growing sectors of our economy, with more workers turning to this type of work. The passage of this legislation will help tens of thousands of delivery workers make ends meet while maintaining their flexibility.”
This legislation was created after a year of intensive stakeholder meetings and public hearings. 92% of jobs from app-based companies pay Seattle workers less than the minimum wage, according to a recently published report.
“Large segments of our economy are becoming more and more automated with lower pay and scant benefits,” said Lewis. “As the economy evolves, so too must the approach of local government. This bill is the first step to protect and expand the rights of workers who use these apps.”
The process of this legislation passing required more than a dozen large-format stakeholder meetings, six public meetings in the Seattle City Council’s Public Safety and Human Services Committee, and a public hearing.
Seattle nears passage of nation’s first minimum wage for app-based, delivery gig-workers
Delivery costs could be raised by as much as $5 per order in response to PayUp.
DoorDash estimates Seattle businesses could lose over $74 million collectively a year and DoorDash workers could lose over $32 million in collective earnings due to an expected drop in orders.
PayUp now heads to the desk of Seattle Mayor Bruce Harrell for signature. The minimum wage would not go into effect for another 18 months or so, according to the city.
The city of Seattle did something similar in 2020 when it passed a minimum wage for ride-share drivers, like Lyft and Uber. According to Uber, the cost of rider fares increased nearly 50% following Seattle’s wage law enacted in 2021.