WELCOME TO BASIC ECONOMICS 101, A SUBJECT NO LEADER IN SEATTLE EVER PASSED.
The Seattle City Council passed a law requiring minimum compensation for gig workers (Doordash drivers and the like), and now the delivery apps have introduced new fees to cover the cost, which is causing customers not to use the apps, so now the drivers are actually making less money because they have less work.
Who'da thought this bill would hurt the very people it aimed to assist??
Well, let's go back in time and see:
In a response to the council decision, an Uber spokesperson says, ‘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.'
DoorDash said in a statement, ‘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' …
‘It makes no sense for anybody -- for the workers, for the users, and for all of us in Seattle. It makes no sense,' said Marcos Wanless with the Seattle Latino Metropolitan Chamber of Commerce. ‘Are all those people going to still order because it is more expensive? No, they are going to order less.'
Man, I bet Seattle called those people conspiracy theorists at the time. Fitting that they were right.
To clear up any confusion, here's what the new "Pay Up" law, which went into effect on January 13, states:
The ordinance applies to certain app-based workers (sometimes referred to as gig workers) and provides for several rights and protections for covered workers. Key rights include:
Minimum Payment: Right to minimum pay based on the time worked and miles travelled for each offer …
Minimum compensation: Network companies must pay the greater of
Minimum per-minute amount of $0.44 and minimum per-mile amount of $0.74
OR
Minimum per-offer amount of $5
And like the spokespersons above predicted, the delivery companies are now adding fees to each order to make up for the cost this new law brings (usually around $5, but do the math and that could easily make its way to $20-$30).
Just one example:
‘I've used them for years. I love Instacart ... I order the things that are too heavy for me to carry: cans, foods, flour, milk, heavy things,' said Melson.
She recently added $170.76 worth of one month's groceries to her cart. But to her surprise, on top of all the other taxes and fees, a $22.96 fee, entitled Regulatory Response Fee, was tacked on …
Meanwhile, apps like Instacart are indicating to their customers that they have no choice but to do this, calling the fee ‘a result of the significant increase in operating costs under this regulation.'
It's not just the customers who are dissatisfied; drivers, too, are seeing an impact on work. Think about it: The lady above just paid an extra $23 for groceries. She might not delete the app since she needs it to survive, but imagine all the people who will delete theirs.
That lack of business is already rearing its head in Seattle.
What used to be considered ‘hotspots' for workers on those apps, feel a little colder since Jan. 13, according to several drivers we heard from. That includes Gary Lardizabal, a longtime, app-based, food delivery driver in Seattle.
‘Sundays before the ordinance,' Lardizabal. ‘You know, we'd be thinking breakfast. Today, I didn't even touch it. They're not going to order. It is definitely backfiring.'
Since the ordinance went into effect last month, Mia Shagen said her delivery opportunities have been slashed.
‘I've got nothin,' Shagen said. ‘I'm not gonna sit here for hours for one frickin' order.'
Even on typically busy delivery days, groups of drivers can be seen waiting around together in groups in high-density restaurant areas.
‘Instead of it stopping at 2:30 or 3:00, it's stopping at like one o'clock, sometimes even a little bit before,' Shagen said. ‘So literally at like one o'clock, suddenly, there are no orders anymore.'
So the law tried to increase these workers' wages by giving them more money per minute worked and miles traveled, but what it actually did was take away their work, thereby decreasing their pay.
Typical government regulation at work right there.
The Nanny State can only do one thing, and that's make things worse.
Great job, Seattle!
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