Seattle Gig Workers’ Minimum Wage Rose to $26 per Hour. It May Be Backfiring
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Seattle's recently enacted "PayUp" legislation paved the way for a $26 per hour minimum wage for area gig workers. But consumers are rejecting the additional fees companies are charging to offset increased labor costs.
SEATTLE — The Emerald City’s gig economy is undergoing a significant transformation following the enactment of a new minimum wage law — the “PayUp” policy package — aimed at ensuring fair compensation for app-based workers.
The legislation, which went into effect on January 13, 2024, mandates minimum payment based on the time worked and miles traveled, introducing a per-minute rate of $0.44, a per-mile rate of $0.74, or a minimum per-offer rate of $5.
Sixty minutes on the job now earns $26.40 per hour plus mileage for Seattle-based DoorDash drivers, according to a company statement.
Unintended consequences
While designed to support gig workers with fair wages and transparency in job offers, the law’s implementation has triggered unintended consequences, stirring a debate on its impact on gig workers and the long-term feasibility of gig economy jobs.
The introduction of additional fees by delivery platforms like DoorDash and Uber Eats — frequently reaching $5 or more per order — has led to customer pushback, with some users opting to delete their apps.
This backlash has resulted in a noticeable decline in orders for gig workers, contradicting the law’s intent to bolster their earnings.
Drivers have voiced concerns over the diminishing opportunities for work and the actual impact on their income. Gary Lardizabal, a seasoned delivery driver, expressed his frustration, noting, “Sundays before the ordinance… You know, we’d be thinking breakfast. Today, I didn’t even touch it. They’re not going to order. It is definitely backfiring.”
In response to these challenges, some gig workers are innovating to maintain their livelihoods. Tony Illes, for example, has started “Tony Delivers,” his own delivery service, offering a flat $5 delivery fee as an alternative to the high charges imposed by established platforms.
“I saw an opportunity to provide a more affordable option for customers,” Illes said, highlighting the entrepreneurial spirit among gig workers adapting to the new landscape.
Related: DoorDash Driver Review 2024: How It Works, Tips & Is It Worth It?
The rest of the country watches
These developments underscore the complex dynamics at play in the gig economy’s adjustment to regulatory changes. While the law aims to protect workers, its initial impact raises questions about the balance between fair compensation and maintaining a vibrant, demand-driven market for gig services.
As Seattle navigates these challenges, the experiences of gig workers and the responses from delivery platforms will likely inform future efforts to regulate the gig economy both locally and beyond.
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