DoorDash, Uber push back on driver wage laws
DoorDash and Uber are pushing back against measures that require delivery drivers in Seattle to be paid about $26.40 an hour. Seattle and New York City are the first two cities in the U.S. to pass a minimum wage law for food gig delivery workers.
During their quarterly earnings call Wednesday, Uber CEO Dara Khosrowshahi warned that these minimum pay laws “hurt the people that its supposed to protect,” GeekWire reported.
The multi-billion dollar companies have ramped up efforts to alter pay regulations for delivery drivers in Seattle. In March, DoorDash spent $130,000 on lobbying to “repeal the app-based delivery worker minimum pay ordinance,” according to King 5 News in Seattle.
Now, the Seattle City Council is considering changes to the wage standard law that went into effect in January. The law sets a minimum that companies like DoorDash, GrubHub, Instacart and other food delivery apps must pay their drivers.
Food delivery companies are required to pay their drivers at least 44 cents per minute, plus 74 cents per mile during orders, or a minimum of $5 per order.
In response to the minimum wage law, Uber Eats and DoorDash added an extra $5 fee to every order, requiring consumers to shoulder additional costs. Some businesses have already reported sharp declines in delivery orders.
One restaurant owner in Seattle told Eater that a $54 order for pickup at his restaurant costs $85 when ordered through Uber Eats.
In an email sent to KNKX Public Radio, a spokesperson for DoorDash said the city’s new pay standards for delivery drivers were “excessive” and that the company added fees to “offset labor costs,” according to the news outlet.
DoorDash reported a $2.5 billion revenue in their first quarter of the year, and a net loss of $25 million.
According to its quarterly earnings report, Uber’s Delivery operations raked in $3.2 billion for the first quarter of 2024, with adjusted profits of $528 million.
The proposed changes by the Seattle City Council would require apps to pay drivers 33 cents per minute and 35 cents a mile. Workers would only be paid for time spent picking up and delivering orders. Seattle previously passed legislation that caps how much app companies can charge restaurants.
How are businesses and workers reacting to the law?
Spice Waala, a small chain restaurant in Seattle, shared on Instagram that they’ve experienced a 30% decrease in delivery sales. They said the decline is “largely attributed to the $5 surcharge the City of Seattle imposed to help with minimum wage problems for those drivers.”
Some restaurants say they will cover the $5 dollar charge from delivery apps like Uber Eats and DoorDash.
In a City Council meeting on Tuesday, some drivers spoke out against the law, saying their income had declined due to lack of orders. Other drivers showed support for the minimum wage law because they say the extra pay went further to cover expenses.
In a press release from late March, Seattle councilmember Tammy Morales said, “We should not repeal labor protections every time billion-dollar corporations hike fees on customers without justifying those fee increases. That would allow corporations to extort our political process.”