SEATTLE — Customers who use apps including Uber Eats, Doordash, Instacart in the Emerald City will have to pay more beginning Saturday due to a new Seattle law that’s aimed to help app-based workers.
Seattle City Council passed the App-Based Worker Minimum Payment Ordinance, SMC 8.37, on May 31, 2022.
The law goes into effect Saturday, January 13, 2024, according to the City’s website.
According to the website, the ordinance applies to certain app-based workers (sometimes referred to as gig workers) and provides several rights and protections for covered workers, including the following:
· Minimum Payment: Right to minimum pay based on the time worked and miles travelled for each offer.
· Transparency: Right to upfront disclosures of offer-information and right to receipt and payment records.
· Flexibility: Right to access the network platform without limitations (except for health and safety limitations), right to not be penalized for limiting availability or refusing offers, and the right to cancel an offer with cause.
Network companies must pay the greater of:
· Minimum per-minute amount of $.044 and minimum per-mile amount of $.74 or
· Minimum per-offer amount of $5
The legislation was sponsored by Lisa Herbold (District 1 – West Seattle/South Park) and Andrew Lewis (District 7 – Pioneer Square to Magnolia), however, both are no longer on the City Council.
KIRO 7 News reached out to companies that would be affected, including Uber Eats, Doordash, Instacart, Grubhub, etc.
A spokesperson for each company shared a statement with us:
“Uber supports and advocates for thoughtful earnings standards across the country that help all sides of the marketplace. Unfortunately, this one more than doubles the fees consumers will have to pay which means fewer orders for businesses, and less opportunities for delivery workers.” The spokesperson added, “Uber is supportive of paying couriers the minimum wage plus expenses and has demonstrated its commitment to working with stakeholders to reach that goal, however this earnings standard will do more harm than good. This policy will undoubtedly make services more costly for eaters, and our modeling is clear that this will result in a loss of hundreds of thousands of orders for small businesses and will price out Seattleites from access to this service. That means a loss of thousands of job opportunities for delivery workers.”
A spokesperson added that customers will see a new $5 local operating fee in addition to an increased service fee.
“There are consequences to bad policy. The previous City Council left a legacy of higher costs and fees for all Seattleites. As a direct result of the costly and unnecessary rules they imposed, we’ll be introducing a new regulatory response fee on all orders within the city of Seattle. Unfortunately, we expect this will lead to lost revenue for local businesses and fewer earning opportunities for the very workers the regulations are supposed to help. We urge the incoming City Council to reconsider these harmful rules, which are only making the cost-of-living crisis even worse.”
“Due to new regulations imposed by the Seattle City Council, we’re making several changes to how Instacart operates in Seattle. Some of these changes include reduced service options and pricing increases for customers, as well as pay changes for shoppers. As always, we will work to deliver the best customer and shopper experience despite the limitations put in place by the City Council, and we may need to make additional changes in response to these new set of laws.”
“We’re taking appropriate steps to comply with the new legislation in Seattle while maintaining a sustainable business given the added costs to now operate in the market.”
“Grubhub is making adjustments to ensure our most dedicated delivery partners are available for more delivery opportunities, give more insight into earnings, and ensure they have information about accessibility and oversize items. Grubhub is proactively communicating to Seattle delivery and merchant partners regarding these changes to our platform.”
SMALL RESTAURANT OWNER:
KIRO 7 News spoke with Alexandra Serpanos, the owner of Nikos Gyros in Seattle who partners with app-based companies, including Uber Eats.
“I’m trying to keep this restaurant alive and afloat,” she said. “The margins are so slim. It’s so hard for small businesses and you see small restaurants closing.”
Serpanos said she had partnered with app-based companies, such as Uber Eats around 2021 to expand her customer base to combat the challenges she had faced – inflation, supply chain issues, staffing shortages, etc.
However, when the new law goes into effect, she said her restaurant will take a hit.
“We’re going to be impacted. The customers are going to be impacted.” She added, “I was hoping for that to grow and if people can’t afford it, that’s obviously going to impact my sales.”
“I can’t keep raising prices. There’s only so much people are willing to pay for a gyro or a salad,” she shared.
Serpanos encouraged people to support small local businesses as she and other small business owners navigate this new law.
“It pains me to see so many mom-and-pop shops open for decades and have to close and this is just going to be one more item on that list that’s going to lead to more businesses dissolving.” She added, “Continue to support your local businesses. And if you can’t do it through a delivery service, come in and pick it up yourself.”
KIRO 7 News also spoke with customers to understand how the new law will impact their decisions going forward.
Tybald Jourdan said he does not often order food delivery; however, the new law does not entice him to order on the apps.
“That’s crazy though,” he said. “Since I moved to Seattle it’s $10 extra to $15, plus the money you pay for your food, from what I saw, so with what they’re adding now, yea no thank you.”
Rik Schutte, who often orders food delivery said, “I’m glad to hear there is a focus on the drivers.”
“I’m less likely than to order out. I’m already a little bit weary of ordering out through Uber Eats or Grubhub or what have you because the fees are already pretty high up there. Some places it’s nearly double the cost of what that meal would have been,” Schutte added. “I probably will just try to come in and pick it up myself. So, I don’t know if that really helps the drivers at the end of the day if they’re losing that sale entirely.”
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