Seattle mulls first-of-its-kind minimum wage for app-based delivery drivers

A first-of-its-kind proposal nearly a year in the making would look to increase compensation for app-based delivery drivers in Seattle, with councilmembers discussing its latest iteration on Tuesday.

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The proposed legislation — known formally as “Pay Up” — would build on a bill passed by the council in 2020, which established a $16.39 an hour minimum wage for rideshare drivers, paying out $0.56 per minute and $1.33 per mile driven while transporting passengers. In practice, this new bill would set a $17.27 an hour minimum wage for app-based delivery and service drivers for companies like Instacart, Uber Eats, Rover, and more, while helping cover baseline expenses.

According to a recent study done in San Francisco, it’s estimated that app-based delivery drivers make as little as $6 an hour, without accounting for expenses that are largely paid out of pocket. Other cities have passed legislation similar to what Seattle approved for rideshare drivers in 2020, but according to Seattle council staff, no such protections have been afforded to delivery drivers in any other city.

“This would be the widest breadth of app-based workers covered by local legislation,” council staff analyst Karina Bull said during a Tuesday committee meeting.

The hope from councilmembers who have been refining the draft legislation since early 2021 is to “make sure that this emergent field of work isn’t treated differently than traditionally waged work,” Councilmember Andrew Lewis described.

That was a sentiment echoed by delivery drivers in public comment as well.

“I joined the Pay Up campaign because I see the lack of respect from gig economy apps for the independent contractors who bear all the expense for doing business,” said Handy worker Terri.

“In the 30 years I’ve worked in the service industry, I’ve never struggled this much as a worker as I do on DoorDash,” said DoorDash driver Michael.

Others within the council’s more moderate bloc expressed hesitation regarding the lack of precedent, as well as the potential downstream effect it will likely have in the form of increased costs for consumers. As Councilmember Sara Nelson pointed out, that’s also what happened following the passage of its rideshare driver minimum wage ordinance.

“These platforms have shifted from a convenience to a necessity,” she noted. “We know that (rideshare minimum wage) increased the cost of a ride by 50%, which has made rideshare too expensive for some riders that rely on it — drivers now make upwards of 160% of Seattle minimum wage and they’ve seen a decline in demand for rides.”

As Bull pointed out, that expectation of increased consumer costs is built into the legislation, in hopes of encouraging more well-paid full-time work.

“Built into our legislation is the expectation that companies might take measures to reduce work opportunities for workers so that there are fewer workers available for work, promoting more full-time work,” she described. “What you’re describing happening with (rideshares) was expected.”

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“The same sorts of arguments are in place for the minimum wage as well,” Bull added. “Certainly Seattle has been doing well since the minimum wage went into place.”

Despite a lack of existing precedent to cite, Lewis further detailed how the temporary caps on fees imposed on restaurants by delivery apps — as well as grocery store worker hazard pay — could provide some helpful data to draw from as well.

“We can look to to see how that has affected the market,” he posited. “Between those two points, I think that this is a good part of our process to check in on what that effect and impact has been. I don’t believe that any of those platforms have left our market or considerably altered the way that they operate in response to either of those interventions.”

“What you did with capping the delivery fee really did help those restaurants,” Nelson agreed. “And at the same time, I have no idea how that impacted the workers. It’s really quite complicated and hard to weigh the impacts across the board.”

Moving forward, Lewis says the plan is to continue meeting with stakeholders to “refine the legislation and craft a policy that works for businesses, including the restaurants providing the substance of the deliveries, and also provide workers with the protections and benefits that similarly situated workers who do non-gig work enjoy.”

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