In 2022, Seattle’s Metropolis Council handed an ordinance mandating a minimal earnings ground for app-based meals supply drivers within the metropolis. The regulation lastly went into impact in January 2024, however to this point the primary outcome has been prospects deleting their supply apps en masse, meals orders plummeting, and driver pay cratering.
The ordinance, a part of a legislative package deal known as “PayUp,” was handed underneath the banner of defending gig employees. By setting a compensation ground for app-based supply drivers based mostly on miles pushed and period of time labored, the ordinance operates as a (supremely sophisticated) minimal wage.
The wage ground relies on labyrinthine calculations: the “engaged minutes” for drivers are multiplied by a “minimal wage equal price,” which is then multiplied once more by an “related price issue” after which multiplied but once more by an “related time issue.” Subsequent, this sum is added to the full of “engaged miles” of drivers, multiplied by the “commonplace mileage price” after which multiplied as soon as extra by the “related mileage issue.” (For those who’re misplaced, don’t be concerned—the textual content of the ordinance itself actually does the mathematics for you).
Heralded as a “first-of-its-kind” legislative breakthrough when it handed, the primary two months of the ordinance’s operation have offered a grim real-world Economics 101 lesson. First, the supply firms have been pressured so as to add a $5 charge onto supply orders within the metropolis to cowl the sudden labor price enhance. On cue, information tales began popping up of $26 coffees, $32 sandwiches, and $35 Wingstop orders by which taxes and the brand new charge comprised almost 30 % of the full.
Native information station King 5 reported that Seattle residents began deleting their supply apps from their telephones in response to the spiking exorbitant supply costs. Uber Eats skilled a 30-percent decline so as quantity within the metropolis, whereas DoorDash reported 30,000 fewer orders inside simply the primary two weeks of the ordinance taking impact.
In flip, this lower in demand immediately impacted the pocketbooks of the supply drivers themselves. A driver who made $931 in every week this time final 12 months noticed his earnings drop by half to $464.81 in a comparative week this 12 months. One other reported persistently making $20 an hour previous to the ordinance, solely to see his earnings likewise fall by greater than half since its enactment.
In different phrases, whereas the ordinance theoretically raises driver earnings to over $26 per hour—a quantity that sarcastically far exceeds Seattle’s $19.97 commonplace minimal wage—drivers are barely logging any hours because of the drastic lower in demand for meals supply. As one Seattle driver summarized: “It was useless. Demand was useless.” A second driver put it extra bluntly: “I’ve obtained nothin’. I am not gonna sit right here for hours for one frickin’ order.”
Along with drivers, those that have been hardest hit embrace native mother and pop eating places which have seen supply orders dry up, and even the town’s aged and disabled inhabitants who usually rely upon inexpensive supply choices for meals. One may think that progressive politicians can be fast to repeal a regulation that hurts employees, noncorporate native companies, and the aged and disabled all on the similar time, however Seattle’s authorities officers are busy both doubling down or dissembling.
A spokesman for the mayor famous that “ought to the information present there have been unintended impacts for employees and small companies, we’re all the time open to creating enhancements”—a criterion which has clearly been met already—however nonetheless clarified that the mayor nonetheless “stands strongly in assist” of the minimal wage ordinance.
In the meantime, the president of the Metropolis Council claims she is “very anxious” in regards to the ordinance’s impacts to this point—and even argues that “it is not the position of policymakers to manage the revenue margins of firms”—earlier than occurring to say “I am not going to redo the entire laws.”
The close to future seems to be even grimmer for Seattle supply prospects and drivers. After passing the PayUp package deal, the Metropolis Council then determined that implementing the minimal earnings portion of the ordinance would require 5 new full-time authorities staff within the metropolis’s Workplace of Labor Requirements (increasing to 9 staff by 2027) and $1.2 million per 12 months (escalating to $1.56 million yearly by 2027). To fund these extra prices—in addition to different elements of the PayUp package deal—the Council voted this previous November to tack on a 10-cent per-delivery charge, which can take impact in 2025 and is projected to generate $2.1 million in annual income for the town coffers.
Whereas the will to guard supply drivers could also be based mostly on good intentions, the options pushed by progressive politicians too usually damage greater than assist. If coverage makers actually wish to assist app-based gig employees, they need to as a substitute enact guidelines defending unbiased contracting standing whereas additionally experimenting with transportable profit fashions that truly might assist these employees.
However given the recalcitrance of metropolis officers, Seattle residents doubtless must resign themselves to extra $26 coffees for the foreseeable future.