DoorDash: Seattle gig worker law costs local businesses $40M

(The Center Square) – DoorDash has released new data estimating that Seattle’s App-Based Worker Minimum Payment Ordinance is causing city businesses to lose out on $40 million on the DoorDash marketplace.

In a six week period after the law took effect earlier this year, city retailers have earned roughly $7 million less than expected on the DoorDash marketplace, according to the data.

The App-Based Worker Minimum Payment Ordinance requires network companies to pay the greater of a minimum per-minute amount of 44 cents and a minimum per-mile amount of 74 cents, or a minimum per-offer amount of $5. The law went into effect on Jan. 13.

In response to the law, companies like Doordash implemented regulatory fees, causing the cost of orders to go up.

App-based delivery drivers in Seattle are continuing to see a drop off in orders due to the increased costs of orders from these services. In February and March of this year, Seattle consumers placed approximately 300,000 fewer orders through DoorDash with projections of a loss of more than 1.7 million orders over the course of the year, according to the company.

UberEats also reported a 30% decrease in order volumes in Seattle since the App-Based Worker Minimum Payment Ordinance went into effect.

“Over time, this stands to have a stunning economic impact on Seattle retailers, their customers and the app-based workers this new law was supposed to help,” Washington Retail Association CEO Renée Sunde said in a statement. “We are encouraging the new city council to take this data to heart as they consider a fix to the ordinance.”

The Center Square previously reported on Seattle City Council President Sara Nelson initiating work to create legislation that would adjust the law from being based on a per-order payment to a pay period.

The proposed changes to the ordinance is expected to be introduced at the Seattle Governance, Accountability and Economic Development Committee meeting on April 25.