Seattle council pushes toward rollback of delivery driver minimum wage

SEATTLE – The Seattle City Council could begin discussing a partial rollback of the city’s minimum wage for app-based delivery drivers as early as Monday, just two months after the new law took effect, with the goal of passing the amended law this spring.

The whiplash reversal comes as both drivers and businesses complained about the added cost of delivery, largely in the form of service charges added by the companies in the wake of the new law.

It also reflects the council’s pivot away from envelope-pushing labor laws, championed by their predecessors but now viewed doubtfully by the supermajority new council.

Backers of the wage law acknowledge the challenges facing drivers since it took effect, but lay the blame at the companies’ feet, accusing them of using the minimum pay standard as a Trojan horse to increase service fees.

While some council members have raised the idea of striking down the law entirely, the more likely scenario is a reduction in what the companies are required to pay drivers. Representatives from the companies, such as DoorDash and Instacart, have spent the past week negotiating a proposal with Council President Sara Nelson and Drive Forward, a driver advocacy group with ties to the app companies that’s been skeptical of city efforts to regulate gig work.

The exact scope of the changes will become clearer in the coming weeks. Early drafts of Drive Forward’s proposal show a roughly 11% reduction in the minimum hourly wage for drivers and a 40% reduction in per-mile reimbursement.

The proposal does not include any requirement the companies scale back their service charges.

“What we’re proposing is a reduction in both the rate of pay in engaged time and the mileage rate to much more defensible and realistic numbers,” said Michael Wolfe, executive director of Drive Forward.

The most significant structural change would be moving away from setting minimums for every trip and toward weekly minimums, meaning the companies would top up driver pay at the end of the week if it was less than minimum wage. If drivers earned more, they would keep that pay. This change, said Wolfe, puts more pricing power in the hands of companies.

Wolfe said the companies’ proposal looks similar, but with some outstanding disagreement over several subjects important to drivers, including how and when they can be deactivated from the platform for canceling trips.

A spokesperson for DoorDash said the company’s preference remains a full repeal, but acknowledged that was unlikely and said the company is still engaged in negotiations with the council. Without promising a full rollback of the service charges put into place after the law took effect, the spokesperson said the company would adjust in kind with whatever rates come out of a new law.

“Our message to the Council is the same as the message we’re overwhelmingly hearing from Dashers, businesses and consumers in Seattle – it’s time to fix this broken law,” the spokesperson said.

In a statement, a spokesperson for Instacart said: “While we continue to work to deliver the best customer and shopper experience in Seattle, we hope that the new City Council takes seriously the voices of shoppers, customers, and retailers and makes commonsense changes to this law.”

Nelson declined to comment.

The minimum wage was passed in 2022. It set a floor for drivers who work for delivery companies like DoorDash, Instacart, UberEats, Grubhub and Amazon Flex, which rely on independent contractors not subject to the city’s nearly $20 hourly minimum wage. It requires the companies to pay at least 44 cents per minute, plus 74 cents per mile during orders, or a minimum of $5 per order – intended to at least match and possibly exceed the city’s minimum wage.

The state and city previously regulated minimum wage for transportation services, like Uber and Lyft. The effort to extend those rights to delivery drivers came later.

The law took effect in early January and backlash has been swift. The companies quickly levied the additional service charge and restaurants have complained of decreased orders, particularly small ones.

Drivers have also been frustrated. A recent survey of more than 500 drivers conducted by Drive Forward in recent days found a significant increase in those who report waiting more than 30 minutes between orders. More than 70% said they were receiving “significantly fewer” orders and more than half said tips have decreased.

For their part, the companies have said the added service charges are necessary counterbalances to the increased costs, though they have declined to release internal data.

Backers of the legislation have acknowledged driver frustration, but argue the fault lies with companies for levying the service charge.

“Am I able to recognize the backlash around it? Of course,” Michelle Balzer, an Instacart shopper, told the council last month. “However, any and all backlash around it has been the result of the companies, their resistance to paying more adequately, being accountable and being more honest. It saddens and frustrates me that the customer is the ultimate sufferer.”

Hannah Sabio-Howell, communications director for Working Washington, a labor-backed advocacy organization that pushed for the law’s initial passage, said the current pay standard was written to account for external costs like vehicle wear and tear. Turning back the law so quickly would be a mistake, she said.

“The law is not the problem. The problem is that the app corporations have free reign to jack up fees,” she said.

In addition to trimming hourly earnings, Drive Forward’s proposed law would repeal the $5 per trip minimum. It would also give companies more flexibility to restrict driver access to the platform during periods of low demand.

Though Wolfe of Drive Forward believes the current law oversteps, he does not favor a full repeal of the minimum wage. His group is also at odds with the companies over how and when a driver would be deactivated. The companies, he said, want the right to deactivate a driver if they cancel more than 5% of their last 100 trips. Wolfe wants that window expanded over a larger period so a driver isn’t punished for one bad week.

The goal, he said, is for Drive Forward and the companies to present one proposal to the council.