{"id":208045,"date":"2024-02-25T12:26:44","date_gmt":"2024-02-25T12:26:44","guid":{"rendered":"https:\/\/michigandigitalnews.com\/index.php\/2024\/02\/25\/seattle-delivery-app-minimum-wage-how-bad-is-it-for-drivers\/"},"modified":"2025-06-25T17:21:36","modified_gmt":"2025-06-25T17:21:36","slug":"seattle-delivery-app-minimum-wage-how-bad-is-it-for-drivers","status":"publish","type":"post","link":"https:\/\/michigandigitalnews.com\/index.php\/2024\/02\/25\/seattle-delivery-app-minimum-wage-how-bad-is-it-for-drivers\/","title":{"rendered":"Seattle delivery app minimum wage: How bad is it for drivers?"},"content":{"rendered":"

[ad_1]
\n<\/p>\n

Tony Illes was riding high for four years as a full-time delivery driver for several apps\u2014by his count, he made 10,000 deliveries, a good living in the gig economy. Just weeks ago, it all came to a screeching halt when he suddenly found himself waiting six hours for a single UberEats delivery request.\u00a0<\/p>\n

\n

\u201cDemand was dead,\u201d the 30-year-old Illes told Fortune<\/em>.\u00a0<\/p>\n

Shortly afterward, he launched Tony Delivers<\/a>, a service where Illes brings hungry Seattleites in his Beacon Hill neighborhood food deliveries on his e-bike or e-scooter. Every order in a 1.5- mile diameter costs $5, no matter what customers order.<\/p>\n

\u201cI feel more capable than just sitting around waiting for some app to deliver you the goods\u2026.I can go get it myself,\u201d he said.<\/p>\n

Now Illes\u2019 full-time job, Tony Delivers added some consistency to his volatile gig work. He did not share sales figures with Fortune<\/em>, but he said the business is successful and getting \u201cbetter every single day.\u201d Why did this long-time gig worker have to go into business for himself, though?<\/p>\n

City Hall plays a part in this story\u2014and a minimum wage ordinance that was designed to help gig workers.<\/p>\n

The long waits between orders only began after Jan. 13, 2024 when Seattle enacted an ordinance that boosted the minimum wage for delivery-app drivers. While the ordinance was meant to protect gig workers who rely on the income they earn from making deliveries plus tips, app-based companies didn\u2019t just absorb those costs. Instead, they rolled them into the fees customers pay for service, and if you talk to them and drivers like Illes, there was a catastrophic drop-off in business.\u00a0<\/p>\n

Steven Marchese, director of the Seattle Office of Labor Standards, said the law was \u201can important step forward<\/a>,\u201d but delivery app executives felt differently. To offset increased operating costs in the city, delivery apps including UberEats and DoorDash<\/a> implemented additional fees to cover deliveries and platform costs. As a result, DoorDash calculated, fewer customers<\/a> used the delivery apps, leaving drivers waiting around.\u00a0<\/p>\n

\u201cPeople are upset, they\u2019re hurt; their wallets are hurting, Illes said. \u201cThey\u2019re having to make much different consumer decisions.\u201d<\/p>\n

Driving away demand<\/strong><\/h2>\n

At 30, Illes is in the same position as a growing number<\/a> of Gen Zers and millennials who have turned to gig work to make a living. Bank of America<\/a> found that as of August 2023, 4.3% of millennials earned income from gig work, double the percentage of six years ago. Overall, the Seattle minimum wage ordinance estimated that the city is home to about 40,000<\/a> app-based workers.<\/p>\n

Classified for tax purposes as 1099 workers, app-based delivery drivers are not guaranteed the same protections<\/a> as full-time, W2 employees, such as health insurance or minimum wage<\/a>. These differences have prompted workers to organize. Gig workers\u2019 efforts recently culminated in a Valentine\u2019s Day strike<\/a> across the U.S., UK, and Canada, with thousands of Uber, Lyft<\/a>, and DoorDash drivers refusing to take orders on one of the busiest delivery days of the year.<\/p>\n

Marchese said these actions have encouraged the city to do right by their workers. It\u2019s why Seattle, among other cities such as New York<\/a> and Minneapolis<\/a>, have pushed to pass ordinances that protect these workers and set minimum wages. But app-delivery companies have countered that laws claiming to protect workers are actually leaving the drivers vulnerable.<\/p>\n

The fallout was swift and brutal. After the ordinance was enacted last month, DoorDash implemented a $4.99 regulatory fee<\/a>, and UberEats similarly introduced a $5 local operating fee<\/a>. Instacart<\/a> set its default tip option to $0<\/a>.<\/p>\n

In the two weeks following the law\u2019s implementation, Seattle businesses missed out on $1 million in revenue, according to a Tuesday DoorDash blog post<\/a>, which also claimed that there were 30,000 fewer delivery requests on the DoorDash Marketplace. Drivers waited three times longer on average to receive order requests on the app. Uber told Fortune<\/em> that its drivers are waiting up to 30% longer, and Instacart reported similar issues.<\/p>\n

Some restaurants are backing app companies\u2019 claims. Local Indian spot Spica Waala saw a 30% year-over-year decline in app orders, which make up 30% of the restaurant\u2019s business, co-owner Uttam Mukherjee told GeekWire<\/a>.<\/p>\n

\u201cI\u2019m frustrated with the fact that we now have to bear the brunt of all of this,\u201d he said. Seattle\u2019s experience may be infuriating to drivers and restaurant owners, but it\u2019s fascinating to economists, who have debated the pros and cons of a higher minimum wage for years.<\/p>\n

\"\"