Seattle’s Gig Workers Slam Corporate Greed as $20 Minimum Wage Backfires

The city is currently grappling with the economic consequences of this decision. Businesses, customers, and gig workers are all affected, with a noticeable impact on the local economy as a whole.

This law was intended to improve the earnings and working conditions of gig workers in Seattle.

According to NPR, delivery gig work has slowed since the start of the year, largely due to companies like Instacart, DoorDash, and Uber Eats raising customer fees by anywhere from $5 to $25 per delivery.

DoorDash highlighted a significant decrease, noting 300,000 fewer orders within a three-month period, a downturn attributed to the new wage regulations impacting consumer pricing.

“There seems to be a universal agreement that these workers deserve better wages than what they were receiving, but it’s difficult to know exactly how much employers can give while also turning a profit.” 

Beene commented to Newsweek, “Under these revisions, drivers would still be paid at a guaranteed hourly rate, although some advocates say when you factor any other expenses these gig workers face, it would ultimately present a negative effect to their overall pay.”

This significant decrease highlights the challenges faced by businesses and gig workers under the new economic conditions.

Lardizabal said that orders have dried up since the ordinance took effect on January 15, calling the minimum wage a “dying wage.” “I can’t pay rent. It’s down 30 to 40 percent. I’m one of the lucky ones. I know people who make $12 in one day,” Lardizabal said.

They argue that the law has not only reduced their orders but also harmed their operational dynamics.

While companies like DoorDash refuse to take a profit cut, workers and restaurants are starting to feel the impact.

This has sparked a broader discussion on how businesses can sustainably manage increased labor costs while remaining competitive.

Peter Pak, a local restaurant owner, said, “I do understand the intent of the new ordinance and do respect the minimum wage but just want to express our negative impact that it’s had on our business. Our orders have been down about 40 percent, 50 percent.”

However, workers seem to be aware that the current backlash against this increase is coming from the companies. “They want this to fail. They are doing everything that they can to make it fail. They’re hurting their customers, they’re hurting the restaurants, they’re hurting the drivers to make it fail so they cannot be regulated,” Lilly Ana Fowler told NPR.

These amendments aim to address the concerns raised by businesses and gig workers alike, seeking a more balanced approach to wage regulations.

This decline affects not only their revenue but also their ability to employ staff and manage operational costs.

These added costs have contributed to a reduction in the number of orders, as customers opt for more economical choices.

“They want us to hurt because they don’t want this law to be propagated in another city or another state, so they’re hitting us hard,” Kimberly Wolf said in response to the added service fees.

The goal is to eliminate the “local fee” that seems to be motivating consumers to step away from deliveries, limiting the gig workers’ main source of income.

The outcome will significantly influence the economic landscape for restaurants, employees, and customers in Seattle.

The current law, unanimously approved by council members two years ago, mandates that companies pay drivers a minimum of 44 cents per minute and 74 cents per mile during deliveries or a minimum of $5 per order.

“The compromise proposal that the City Council is considering is a promising step toward increasing affordability for consumers and restoring millions in lost revenue for merchants and Dashers in Seattle,” a DoorDash spokesperson said in a statement to GeekWire.

“Nelson’s policy was entirely drafted by a group consisting of the big gig companies, lobbyists for the big gig companies, and an organization the gig companies fund,” the website reads.

“Through a rushed, closed-door process that has taken place less than two months after the implementation of the #PayUp gig worker minimum wage law, Council President Nelson has allowed the app corporations to present ‘solutions’ to a problem they created by imposing massive new fees on customers,” the website reads.

The PayUp nonprofit is hoping to enter the decision-making process to help find a middle ground that allows gig workers to make a livable wage without corporations taking away their business.