Showdown over added delivery app fees hits Seattle streets

Feb 23, 2024, 4:00 PM | Updated: 4:06 pm

A theatrical performance at Pike Place Market turned into a dramatic showdown over Seattle’s new minimum wage law for gig workers.

The measure known as the “PayUp” law requires delivery apps to pay drivers a per-mile fee and per-minute fee in order to get them roughly equal to Seattle’s minimum wage, which is now $19.97 per hour. DoorDash estimated it requires the company to pay at least $26.40, before tips, and additional reimbursement for mileage.

Near Pike Place market on Thursday, about a dozen people rallied in support of the law, which impacts an estimated 40,000 gig workers in the Emerald City. Organizers put on a satirical skit accusing companies of underpaying them for years.

More on gig work in Seattle: Paid sick, safe time now permanent for Seattle app-based workers

“These workers want minimum wage and the tips that customers give them? Inconceivable!” one supporter said, imitating a company CEO in a tuxedo, top hat and monocle. “It is my right to steal your tips and to cash in on the big fees that customers will pay!”

But the performance was quickly interrupted as a passerby began shouting at the group. He told the gathered crowd that the law designed to protect workers is actually backfiring.

“Restaurants are going to fail because of this ill-advised ordinance,” Gary Lardizabal, a driver since 2016, said. “The city council was specifically told by the gig companies they were going to raise the rates. We’re fed up having a 30% or 40% pay cut.”

Delivery apps tack on new fees

Companies including Instacart and DoorDash have criticized the law. Instacart recently announced price increases and other changes, including restrictions to delivery areas. DoorDash also said it’s introducing new fees and argues that the new law, “while well-intentioned,” will harm its drivers, customers and merchants.

While the exact amount of the new “operating fee” varies — customers can now expect to pay around $5 extra per order. A DoorDash spokesperson told KIRO Newsradio the new law has cost businesses in Seattle more than $1 million in just two weeks. In a blog post, the company said its drivers are waiting three times longer in between offers due in part to the lower order volume.

“We have to circle around for hours and hours. Drivers are making $50 in one day. People cannot pay the rent,” Lardizabal said. “This is not a living wage. This is a dying wage.”

Rally organizers said the back-and-forth exchange on Thursday highlights the deep divide on the issue within the gig worker community. Kimberly Wolfe, a driver in Seattle since 2013, believes the law is misunderstood and misrepresented.

“If you read the actual law, it’s about ‘engaged time.’ It is not very likely that I’ll be on one particular job for a full hour to get the 26 bucks (an hour),” she said. “But we’re at least wanting the $26 rate when we actually are working. It’s not counting all the times we’re sitting in a parking lot waiting for a job and getting nothing.”

Another supporter, James Thomas, agreed. He said before this, delivery drivers had little protection.

“I own my vehicle. I pay insurance, the gas, the upkeep, the tires. If anything goes wrong with my car — DoorDash, Uber Eats — They don’t care. That’s on me if I can’t afford to fix it.”

Wolfe also argued the companies are choosing to retaliate and pass on extra fees to the customers.

“The gig companies are making plenty of money, they could just simply pay correctly,” she said. “They want us to hurt because they don’t want this law to be propagated in another city or another state. So, they’re hitting us hard.”

Impacts of law still playing out

The legislation — the first of its kind in the U.S. — was passed unanimously by the Seattle City Council in 2022 but only took effect last month. It was sponsored by Lisa Herbold (District 1 – West Seattle/South Park) and Andrew Lewis (District 7 – Pioneer Square to Magnolia) — both of whom are no longer on the council.

DoorDash told KIRO Newsradio it does not anticipate the new fees going away anytime soon. The company said anyone frustrated with the change should contact the Seattle City Council. Mayor Bruce Harrell, who previously hailed the law as providing needed support for gig workers, now said it’s too soon to tell the full impact of the ordinance.

More from Kate Stone: Prosecutors will not charge Seattle officer in death of Jaahnavi Kandula

“Should the data show there have been unintended impacts for workers and small businesses, we are always open to making improvements,” a spokesperson said in the mayor’s office.

Wolfe remains optimistic that things will stabilize.

“Just hold on people. They can’t do this for forever,” Wolfe said. “And really, everybody deserves a basic minimum wage. We just have to hold the line.”

You can read more of Kate Stone’s stories here. Follow Kate on X, formerly known as Twitter, or email her here.

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Showdown over added delivery app fees hits Seattle streets