Seattle's new minimum payment law for app-based workers is causing issues. It aimed to increase earnings for delivery drivers from apps like DoorDash and Instacart. However, it's leading to higher costs for consumers.
The law, effective last month, sets a minimum pay rate for drivers. Companies now pay drivers $26 or more per hour, above Seattle's $19.97 minimum wage. This increase is passed on to consumers, affecting order volume.
Gary Lardizabal, a delivery driver since 2016, has seen a significant drop in business. With fewer orders, income for drivers and revenue for restaurants are declining. Lardizabal notes a drastic decrease in orders at local restaurants, impacting his earnings.
Tammie Hetrick from the Washington Food Industry Association reports a 10% drop in delivery orders. This affects independent groceries, struggling with low profit margins and increased costs.
Delivery apps had warned the Seattle City Council about the ordinance's negative impacts. Uber and DoorDash report a decline in demand and increased wait times for work. They hope the new council will reconsider the law.
Instacart also criticizes the law for raising costs and reducing orders. The company urges the council to revise the ordinance.
Seattle's labor standards department believes it's too early to judge the law's effects. They plan to monitor its impact without requiring price increases.
Lardizabal urges the council to repeal the law, citing severe consequences for drivers and the local economy. The situation highlights the challenge of balancing fair wages with maintaining affordable services.
