By Aaron Allen, The Seattle Medium
In an effort to adhere to minimum wage hikes in Seattle, DoorDash has implemented new policies that could not only impact “Dashers”, independent delivery or gig workers who work for DoorDash, but it could also impact consumers and the merchants as well.
In September, the Washington State Department of Labor and Industries announced that minimum wage rates in the state will rise from $15.74 to $16.28 an hour. That’s a 3.4% increase year to year. In Seattle, the minimum wage recently increased to $19.97 per hour.
In addition, 0n January 13, 2024, the City of Seattle implemented major changes to the way delivery platforms such as DoorDash will operate in the city due to the wage increase, and provides for additional minimum wage hikes to keep up with inflation.
According to DoorDash, the company has for many years provided their workers with a living wage. However, in response to the new legislation, DoorDash has increased wages for Dashers to $26.40, which the company claims may impact the bottom line for many of their partners.
“Throughout this process, we warned the City that while well-intentioned, these extreme policy changes would have adverse effects on all members of our community–Dashers, merchants, and consumers,” said DoorDash in a statement.
The Seattle Medium recently sat down with Anna Powell, DoorDash’s Manager of Government Relations in Seattle, to talk about the new legislation, its impact, and how DoorDash is adapting to the policy changes.
According to Powell, Dashers who deliver in Seattle will now earn at least $26.40 per hour, before tips, plus mileage for time on delivery – far exceeding Seattle minimum wage. This rate excludes tips and is just a minimum, so Dashers will still have the opportunity to earn more than the minimum. Dasher earnings will be reviewed following the completion of each accepted offer to ensure that the Dasher’s pay meets the earnings minimum, and any Dashers who earn below the required minimum will receive a pay adjustment.
Introducing a new regulatory response fee
In the coming days, consumers located in Seattle or ordering from a Seattle merchant will see new fees at checkout to help cover the costs of these new regulations. In order to better balance the impact of these new costs and provide the best experience for consumers, the company says that it is also reducing the suggested tip amounts on each order. However, the company notes that 100% of a consumer’s tip goes to the Dasher.
“In response to the requirements to increase the earning standard for the ordinance that went into effect on January 13, DoorDash has implemented several adjustments,” says Powell. “For example, a $4.99 fee on all deliveries that are in the city of Seattle. This was necessary to help make up the increased cost of doing business in Seattle.”
Implementing changes to platform access that may result in fewer work opportunities for Dashers
Per the new regulations, all Dashers beginning work in Seattle can DashNow at any time. As a result, more Dashers may be available for offers at the same time and each Dasher’s wait for an offer will likely be longer than in other jurisdictions. This means Dashers will likely receive fewer offers while dashing in Seattle.
In addition, in a statement, Door Dash says that due to the new regulations, “Top Dasher status will no longer benefit Dasher offers or earnings potential in Seattle. We understand that this is a valued program for many Dashers, and it will still be available outside of Seattle. Additionally, we will be terminating our Priority Access program for Seattle Dashers, which gives Dashers who have high ratings priority on higher-paying offers.”
“While this policy (by the City of Seattle) was well intentioned unfortunately it will have an adverse effect on the very people they’re trying to help, like DoorDash drivers in the city,” says Powell. “Just like anything when the costs go up the demand often goes down.”
Due to the changes outlined above, DoorDash says that merchants may experience significant declines in order volume as well as negative impacts to service. Some merchants will now also be required to provide additional information about items for delivery – and to reduce confusion and added costs for merchants and consumers – DoorDash will also limit the ability of consumers to place orders with Seattle merchants while outside the city.
“For food delivery in the city of Seattle and adding a fee we are expecting to see order volume go down,” says Powell. “That means fewer orders for Dashers to deliver, and it will also affect restaurants in that they may experience fewer orders coming through. It will also have an impact on the consumer because they are paying that extra fee. This major policy shift is unprecedented. We will continue working to chart the best path forward for the communities we serve by testing and reviewing any changes we make.”
“Our hope is that moving forward, the City of Seattle and policymakers throughout the country will work with us to provide a better experience for Dashers, consumers, and merchants that will help empower local economies in the communities we serve,” concluded Powell.
