Seattle 1st In Nation to Require Minimum Wage for App Delivery Drivers
Seattle has become the first city in the U.S. to mandate a minimum wage for what are considered app-based delivery drivers.
The new program guarantees the city minimum wage of $17.27
After numerous meetings, including Seattle City Council, a public hearing, and other sessions, the Council this week unanimously passed what's called PayUp. The program guarantees drivers who deliver for such businesses as DoorDash, UberEats, and others will receive at least the city minimum wage of $17.27 per hour.
That rate must be guaranteed on the bottom line, after all other costs, payments, etc.
According to a report from MyNorthwest.com, a recent study claimed 92 percent of these app-based delivery drivers made less than other minimum wage workers in Seattle.
However, companies estimate costs will jump
According to MyNorthwest.com, these companies say delivery costs could rise as much as $5 per order once the new policy goes into effect 18 months from now.
DoorDash officials say with this new pay structure, Seattle-area businesses could lose as much as $74 million in sales annually, and workers could lose as much as $32 million in total earnings due to the expected drop in orders, because of anticipated cost hikes to consumers.
This has been done in Seattle before
About 2 years ago, the City enacted a similar policy for Uber and Lyft drivers, Uber said there was nearly a 50% jump in rider costs in 2021 after this policy went into effect.
Similar economic ripples have been felt when the minimum wage was raised significantly. While initially it resulted in more money for some low-income workers that was offset by job reductions due to employer costs. The CBO (Congressional Budget Office) estimated a few years ago widespread minimum wage increases could cost as many as 1.4 million jobs nationally.
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