Seattle looks to change controversial gig worker law

Mar 22, 2024, 3:27 PM

Photo: The DoorDash app is shown on a smartphone on Feb. 27, 2020, in New York....

The DoorDash app is shown on a smartphone on Feb. 27, 2020, in New York. (File photo courtesy of The Associated Press)

(File photo courtesy of The Associated Press)

Less than two months after it took effect, the City of Seattle is looking at changing its controversial gig worker pay law.

Background of the law: Showdown over added delivery app fees hits Seattle streets

Seattle City Council President Sara Nelson confirmed she’s talking with app-based delivery companies and their drivers about modifying the law that boosted driver pay that, she said, had consequences.

“Drivers are not getting paid what they were before, restaurants aren’t getting the orders that they were before, so their revenues are down and customers are finding it too expensive to order,” she said.

That’s because when the law took effect, app-based companies such as Uber Eats and DoorDash added a $5 fee to orders to cover the increased costs.

“This is an example of legislation that is having unintended consequences that are having wide impacts,” Nelson said.

More background: Delivery apps adding a side dish of ‘worry’ for restaurants, customers

Drive Forward director says he predicted consequences

Executive Director of the driver’s advocacy group Drive Forward, Michael Wolfe, said he predicted this would happen.

He said Drive Forward is at the table with Nelson as she looks at changing the law and the group was involved in talks with the council before the current law was passed.

“Most of the drivers were at, maybe slightly above, minimum wage then but there was a good set of drivers, a subset of drivers, that were about 10 to 5% below minimum wage and that’s not right,” Wolfe said. “And that’s why we were supportive of creating a minimum earning standard, then.”

But he said the current law simply went too far, “Creating what is essentially a $26.40 per hour wage and a mileage reimbursement of nearly 80 cents per mile.”

“This is not just about paying the minimum wage, it’s about paying well above that,” the Manager of Government Relations for DoorDash, Anna Powell, told KIRO News Radio last month as she defended the company’s new $5 fee.

Critics claim app-based delivery companies shoulder the blame for the current fallout from the Seattle law, saying they can absorb the cost of higher pay for drivers.

Yahoo Finance reported that DoorDash revenue increased in the fourth quarter of last year by 27% year-over-year, to $2.3 billion.

But Wolfe said it’s naive to think the companies wouldn’t pass the costs along to customers.

“I have yet to see a company that’s going to eat increased costs JUST BECAUSE,” Wolfe said.

More from Heather Bosch: Surging home prices prolong Seattle’s ‘bidding wars’ era

While Powell had said DoorDash was hopeful the council would repeal the law, that does not appear to be on the table.

Future of the current gig worker law

Nelson is reluctant to even use the term “rollback,” insisting the council will only consider “fixing” the current law.

Wolfe said his group is proposing a wage that’s still above Seattle’s standard minimum.

“The per-hour rate is still higher than the $19.97 minimum wage and there’s still a mileage component, here,” he said.

He’s optimistic a city council committee will be briefed on some kind of proposal to fix the law on March 28.

Nelson, who is one of three remaining members of the city council that passed the law unanimously in 2022, wants to proceed carefully.

“We certainly don’t want to end up in the situation that we’re in right now,” she said.

Heather Bosch is an award-winning anchor and reporter on KIRO Newsradio. You can read more of her stories here. Follow Heather on X, formerly known as Twitter, or email her here.

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