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Food delivery apps are fighting Seattle's new minimum wage law. City Council is listening

Three food delivery app icons on a phone screen, the center one that is in focus is DoorDash.
Parker Miles Blohm
/
KNKX
After Seattle's new app-based delivery driver minimum wage took effect, companies like Instacart, DoorDash and Uber Eats have raised customer fees – anywhere from $5 to $25.

At about 5 p.m. on a weekday, just as a lot of people are getting out of work, I climb into the car of 49-year-old Carmen Figueroa. She rents the car from a friend for $100 dollars a week.

Figueroa logs into the DoorDash app and shows me a map where parts are highlighted in red. The darker the red, the more orders there are.

“This is the hot zone map,” Figueroa told me. “Chances are we'll have a better chance of getting an order if you're in a hotzone.”

Figueroa started doing gig work about seven years ago, since it allows her to take time off when pain in her back flares up.

“I have Ankylosing spondylitis,” Figueroa said. “And I don’t think I said that right.”

We drive around one of the company's hotzones — Seattle’s Green Lake neighborhood – to see if any pings for deliveries come through the DoorDash app. But Figueroa hasn’t been having much luck lately.

“So I was on for about four-and-a-half hours, and I had four deliveries,” she said about one day this past January. For that almost five hours of work, Figueroa made about $60.

The dramatic drop in orders is likely tied to Seattle’s new app-based delivery driver minimum wage law this year that mandates workers make the equivalent of $19.97 an hour. In response, companies like Instacart, DoorDash and Uber Eats have raised customer fees – anywhere from $5 to $25 per order.

“They want this to fail; they are doing everything that they can to make it fail,” she said. “They are hurting their customers; they're hurting the restaurants; they're hurting the drivers to make it fail. So they cannot be regulated.”

DoorDash declined to be interviewed, but in an email, a spokesperson for the company called the new pay standards for workers excessive and said they introduced fees to offset labor costs. DoorDash reported revenue of $2.3 billion in its most recent quarter. Spokespeople for both Instacart and Uber Eats also said the new pay standards were unbalanced.

At a recent city council meeting, a number of restaurant owners testified against the new minimum wage law, including Peter Pak, who runs a Korean restaurant.

“I do understand the intent of the new ordinance and respect the minimum wage but just want to express our negative impact that it's had on our business. Our orders have been down about 40-50%,” Pak said.

Some drivers have also spoken out against the legislation, though many continue to support it.

This week, Seattle City Council members unveiled proposed changes to the law. They say they aren’t able to tell private companies what they can charge for service fees – so instead, they’re proposing that companies compensate drivers less for their time and mileage. Seattle, however, has capped how much app companies can charge restaurants.

Under the current law, drivers are paid $5 per order, or 44 cents per minute, plus 74 cents per mile. The city council members are now considering paying drivers 33 cents per minute and 35 cents a mile.

Under the proposed changes, workers would not get paid for the time they’re logged onto the apps, but only for the time spent picking up and delivering orders.

“My interest is in making sure – that is to come to an agreement that makes those fees go away so that the cost of deliveries is lower so that it drives demand up,” Sara Nelson, president of the Seattle City Council, said at a recent city council meeting.

Worker advocates point out there’s no guarantee the app companies will drop the higher customer fees even if these amendments are adopted. In California, for example, higher fees remained even after the state passed a law denying app based drivers a right to a minimum wage.

When asked whether it intends to drop the higher customer fees introduced in Seattle, a DoorDash spokesperson would only say they plan to explore all options to increase affordability for consumers. Representatives for Instacart and Uber Eats also would not confirm that they would eliminate the higher fees.

Carmen Figueroa started doing gig work about seven years ago. Despite a dramatic drop in DoorDash orders, she believes any amendments to the law now will only make things worse.
Lilly Ana Fowler
/
KNKX
Carmen Figueroa started doing gig work about seven years ago. Despite a dramatic drop in DoorDash orders, she believes any amendments to the law now will only make things worse.

Veena Dubal, a professor of law at the University of California, Irvine, said any city or state government that has tried to regulate these gig companies, has faced similar resistance.

“They've made this threat everywhere,” Dubal said. “That if you, you know, make us treat these workers, like employees with minimum wages, then we're going to pass all of those expenses on to the consumers.”

Last month, DoorDash alone spent $130,000 dollars on lobbying advocating for the law to be repealed.

Gig workers all over the country are struggling to get basic labor protections and a repeal in Seattle could make that fight harder, Dubal said.

She added that ultimately taxpayers and governments are forced to foot the bill for workers' medical expenses, unemployment insurance and other benefits because gig companies are required to do so little for them.

Under the proposed changes to the minimum wage law, gig companies could also penalize workers for declining certain jobs, or not being available certain hours.

After an hour and a half of driving for DoorDash, Figueroa and I still don’t have an order. So we start parking by different restaurants.

“When I'm looking for an order like this, trying to chase one, I just kind of, like, meander around here hoping to just be the nearest, closest, highest-rated driver. Whenever the order floats through the air, hopefully it'll crash into me,” she said.

We park by a boba tea shop and a 7-11. Not one order. Lately, Figueroa has been delivering packages for Amazon Flex because she’s able to make more money doing that, even though the same minimum wage law applies.

Figueroa believes any amendments to the law now will only make things worse.

“It will have a ripple effect; it'll have a domino effect, I believe worldwide, and gig companies are gonna know that they cannot be regulated,” she said.

The Seattle City Council is expected to vote on whether to change the app-based delivery worker minimum wage law in the coming weeks.

Updated: April 26, 2024 at 9:30 AM PDT
Updated with information on caps on restaurant fees and the legislation's national implications.
Lilly Ana Fowler is a former KNKX reporter who covered social justice issues investigating inequality with an emphasis on labor and immigration.