Nelson Continues to Rush Through Gig Worker Sub-Minimum Wage Proposal Despite New Reporting About App Corporations’ Manipulation and the Need for Consumer and Courier Protection
For Immediate Release: April 25, 2024
Contact: Hannah Sabio-Howell | hannah@workingwa.org
Nelson’s proposal to deny gig workers minimum wage, reduce transparency, and eliminate flexibility protections does nothing to address excessive fees or the availability of jobs for bike delivery workers. Despite that, it is being heard without consideration of new information revealing the corporations’ massive profiteering and clear efforts to repeal the law.
Seattle, WA – While DoorDash has spent months churning out its own unverified data about why Seattle’s gig worker minimum wage law is harming workers and small restaurants, it has worked in lockstep with other app corporations like Instacart and UberEats to lobby hard for the law’s repeal and price-gouge the region’s local economy while they’re at it.
A new analysis of the corporations’ massive, self-imposed fees reveals how much of that money has gone straight into the companies’ pockets.
DoorDash’s “cut” of fees, on average, is 48% — almost half of the total fees. In other words, workers’ pay amounts to barely more than half of the fees paid on each order. The rest of the fees are simply retained by DoorDash.
On average, DoorDash charged $21.10 in fees on each order in this sample. With average worker pay of $11.07 per delivery in our sample, DoorDash’s customer and restaurant fees amounted to $10.03 above worker pay.
DoorDash could eliminate the new $5 fee and still maintain a margin over 30%. The average order in our sample included a customer fee of $14.40 on top of food cost and a restaurant fee of $6.70 at minimum. If DoorDash did not charge the new Seattle delivery fee, the average customer fee per order would be $9.40, and total restaurant and customer fees charged on each order would be over $16.11. Based on this analysis, DoorDash could eliminate the $5 Seattle fee and still retain an average 31% of the customer and restaurant fees on each order — after paying at least minimum wage after expenses to the person doing the work.
This analysis comes out just a day after the National Employment Law Project and Powerswitch Action published a jaw-dropping report about the tactics app corporations have rolled out nationwide in cities where gig workers have organized for minimum wage and better workplace standards. The report revealed that corporations like Uber and Lyft systematically use big-dollar lobbying campaigns to flood regional markets with anti-minimum-wage advertising, jack up unreasonably high costs on customers and restaurants, and use their robust lobbying teams to apply constant political pressure to local policymakers.
These eye-opening reports come out at the same time that Council President Sara Nelson is rushing forward with a hearing today on a proposal to revoke Seattle gig workers’ minimum wage rights along with other bare-minimum workplace protections, while doing nothing to control fees. In fact, her proposal does worse than nothing – it eliminates transparent disclosure of fees to customers and eliminates requirements for app corporations to report data to the city on orders, fees, and pay, leaving the public with less information about fees and no assurance that fees will be tamped down.
Her proposal forces an immediate 24% cut in workers’ pay (from 44¢ per minute of delivery time to $19.97 per hour, or about 33¢ cents per minute) – a cut of over $6 per hour – which ultimately sends Seattle’s gig workers back to subminimum wage. It also drops workers’ pay for mileage to an arbitrary 35¢ a mile — dramatically less than the standard IRS mileage rate (currently 67¢) that determines mileage pay for almost every other worker who uses their personal vehicles for work purposes. On top of this, it eliminates disclosure requirements on fees and orders for customers, workers, and the city; eliminates workers’ flexibility protections that keeps the job more sustainable for so many; and eliminates workers’ ability to enforce their rights in court, a labor rights enforcement mechanism that has been proven essential time and again
Not only does her proposal gut every meaningful wage and labor standard for gig workers in the PayUp ordinance, but it does nothing to quell the massive fees corporations can level at consumers, nor does it address the issue of corporations icing out bike couriers.
Gig workers, policy experts, and community supporters are available to discuss the implications of this proposal at or ahead of today’s 2pm committee hearing, starting at 1pm in the lobby of Seattle City Hall. Contact Hannah Sabio-Howell (hannah@workingwa.org) to arrange.