In a move that has raised concerns among app-based workers and consumers, the Seattle City Council’s App-Based Worker Minimum Payment Ordinance took effect on Saturday. The new law requires minimum payments to app-based workers, such as those who drive for services like DoorDash, Instacart, and Uber Eats. It aims to ensure fair compensation for gig workers but has led to unintended consequences.
Under the new ordinance, companies must pay app-based workers the greater of a minimum per-minute amount of $0.44 and a minimum per-mile amount of $0.74, or a minimum per-offer amount of $5. This minimum pay requirement guarantees workers over $26 per hour. Additionally, the law establishes rights for workers, including upfront disclosures of offer information, receipt and payment records, and access to the network platform without limitations except for health and safety.
However, app-based food and grocery delivery services are now facing increased costs due to compliance with the new requirements. As a result, these companies are raising prices and reducing benefits for consumers. Instacart, for example, will guarantee its shoppers the minimum amount under the Seattle law but is ending the availability of heavy pay, peak earning times, and instant cash-out for shoppers in Seattle.
Similarly, Uber has stated that customers will experience higher costs for ordering on the platform due to the new laws. The company predicts a loss of hundreds of thousands of orders for small businesses in the Seattle area, and thousands of Uber and Uber Eats drivers will see diminished work opportunities.
DoorDash has also expressed concerns about the adverse effects of the new policy. The company states that its drivers, known as Dashers, will now earn at least $26.40 per hour before tips, plus mileage for time on delivery. However, changes in availability under the new rules may result in longer wait times or fewer offers for Dashers, as more Dashers may be available at any given time.
The implementation of the Seattle City Council’s minimum pay ordinance has sparked a debate about the balance between fair compensation for gig workers and the potential negative impacts on consumers and businesses. While the intention behind the law is to protect workers, the unintended consequences are causing concern among app-based companies and their customers.
As app-based delivery services adjust to the new regulations, consumers can expect higher costs and potentially reduced availability. The long-term effects of these changes on the gig economy and the overall delivery service industry remain to be seen.
