The recent announcement by Shipt to pause its same-day delivery service in Seattle highlights the growing challenges for gig economy platforms to operate in Seattle’s regulatory environment. This decision was the result of a series of city ordinances that will dramatically impact how app-based companies can operate in the city.
In response, Renée Sunde, CEO of WR, expressed disappointment over the need for Shipt’s decision, citing the many difficulties faced by businesses trying to operate in Seattle. Sunde highlighted the challenges in complying with laws like the App-Based Worker Minimum Payment Ordinance, known as ‘PayUp,’ which mandates complex requirements for app-based platforms. The final rules for PayUp, released in late November 2023, gave companies only 45 days to comply, an insufficient time to re-engineer apps, especially during the busy holiday season.
Shipt will continue serving the broader metropolitan area but will not make deliveries to or from Seattle. “We would not be surprised to hear that other app-based platforms make significant changes to their operations in Seattle in the coming weeks,” Sunde acknowledged.
This development in Seattle’s gig economy landscape highlights the tension between regulatory efforts to protect workers and the operational viability of app-based companies. The response from the newly-elected Seattle City Council could determine how gig economy platforms operate in the city.