After the Seattle City Council imposed minimum wage laws that required delivery apps to pay drivers more, the food delivery business model for hundreds of gig workers in Seattle has all but vanished. The cost of delivery is now so great that people have changed their habits and are no longer ordering over the apps. Instead, they’re ordering food to-go and going to pick it up themselves.
Food delivery grew in popularity across the country during the Covid pandemic policies, which scared many people into not going out to eat, and which made economics of the restaurant and hospitality industries challenging. People started driving for extra dollars, sometimes as their chosen work, and other times to fill in between other jobs or gigs and earn extra money. People could make decent money on the tips alone.
In Seattle, the socialist-run city council put in a minimum wage rule that required the app companies to pay drivers $5 per order, or 44 cents per minute, and an additional 75 cents per mile. It was supposed to ensure that delivery drivers make the same as Seattle’s minimum wage of $19.97 per hour.
Immediately after the “PayUp law” went into effect in January, restaurants reported they had fewer orders. Drivers have quit driving as contract workers for new companies like GrubHub, Uber Eats, and Door Dash because they found they were losing money, with fewer and fewer customers.
In May, the city council was set to reconsider its actions, but as of Sept. 1, has taken no action, and has not scheduled any action in the future.
Seattle and New York City are the first two cities in the country to introduce such a minimum wage for contract drivers
One driver told the Seattle Times that she worked for five and a half hours, hanging around Belltown during what should have been a busy time for orders. Instead, she only was able to deliver two orders during that five and a half hours, for a total of 40 minutes of work. For her day of mostly waiting for orders, she made $23.71.
The owners of Spice Waala in the Capitol Hill neighborhood told a reporter that since the law took effect, delivery orders have declined 40%. It’s made his Indian Street food out of reach for the service. A kati roll used to cost a customer around $10, he said, and now it costs $20. Nobody is ordering them for delivery anymore.