Written by: By Anna Powell, DoorDash Manager, Government Relations – Northwest
On Jan. 13, the City of Seattle implemented an unprecedented new law that made huge changes to the way app-based delivery works by implementing the Minimum Pay Standard for gig workers. The new law requires Dashers to earn at least $26.40 per hour, before tips, plus additional pay for mileage–far exceeding Seattle’s minimum wage of $19.97. In response, DoorDash put in place a regulatory response fee.
Because this is an untested and unprecedented policy, countless community advocates, small business owners, Dashers, and consumers spoke out against this untested policy while it was being considered by the City in 2022.
They warned that it would make delivery prohibitively expensive for thousands of residents. New data DoorDash gathered over a two-week period since the law took effect, confirms that:
- Consumers have placed 30,000 fewer orders on DoorDash Marketplace;
- Dashers are seeing an average waiting time that is three times longer between offers, meaning fewer earning opportunities; and,
- Seattle businesses missed out on more than $1 million in revenue.
The WA Alliance for Innovation and Independent Work issued a press release on February 20, 2024, sharing concerns about the impacts of the Minimum Pay Standard on Seattle businesses.
“This is just devastating for our retailers in Seattle,” said Renée Sunde, president and CEO of the Washington Retail Association. “Small businesses have come to rely on app-based delivery workers to help grow their customer base, especially since the pandemic. This new ordinance feels like a tremendous step backwards for merchants, workers, and customers. We would encourage the new council to examine the impact this law has already had in such a short time, and seriously consider a repeal.” she said. “We need policies that lift up merchants and workers and customers. This is clearly having the opposite effect.”
The bottom line is Seattle’s Minimum Pay Standard regulation has made it harder for app-based delivery drivers to flexibly earn when and where they want, has caused lost revenue for small businesses and is impacting customers.
It remains to be seen what the impact of the Council’s 10-cent per-delivery fee law will be when it takes effect in 2025.
