SEATTLE — Doordash customers in Seattle will soon pay even higher fees to use the service in the city as the company cites a loss in revenue due to the minimum pay ordinance.
Come August 1, get ready to fork out even more for your next DoorDash delivery order.
The food delivery giant announced new fees Tuesday, adding $1.99 to certain orders in order to offset losses in the wake of Seattle’s “Pay Up” legislation.
The ordinance was enacted by the Seattle City Council in January and required companies to pay gig workers at least $26.40 per hour, well above the current $19.97 minimum wage.
In response, gig-based companies, like DoorDash, Uber Eats, and GrubHub implemented a new $5 fee for those using their services within Seattle city limits.
While some gig workers say positive benefits from the legislation, many businesses reported higher costs and fewer orders, pushing the city council to make changes.
Seattle City Council drafted an amendment that would bring workers down to the city’s minimum wage, a move that was met with resistance by many delivery drivers.
The amendment is now at an impasse, and DoorDash has decided to take action to recoup lost wages it says came about as a direct result of the legislation.
In a statement to KIRO 7, a DoorDash spokesperson said:
Due to Seattle’s broken delivery pay law, DoorDash continues to lose money in the market despite instituting a regulatory response fee. Despite this, we have held off on further increasing fees for the last six months while the Council debated a compromise bill to reduce costs of facilitating delivery and still guarantee workers earn at least minimum wage plus additional pay for expenses. Unfortunately, certain members of the Council have let us know that they are unwilling to compromise, and have rejected legislation that would have drastically reduced costs, eliminated the $4.99 regulatory response fee, and helped increase earnings for Dashers and local businesses. This inaction has left us no choice but to implement additional small fees on certain orders in the Seattle market to to remain operationally sustainable in Seattle. It is our sincere hope that as local Dashers, businesses and consumers continue to struggle under this ill-conceived law, these councilmembers will reconsider their commitment to total inaction.
Beginning August 1, 2024 users will see an additional $1.99 fee on certain long-distance orders.
DoorDash did not specify how that would be determined, only saying, “The increase reflects that such orders require more effort to complete. This fee also will help to offset the costs of some of the most expensive deliveries under the minimum pay ordinance.”
A $1.99 minimum service fee will also be added to all orders for DashPass subscribers.
Hannah Sabio-Howell, the communications director with Working Washington & Fair Work Center, a low wage worker advocacy group, told KIRO 7 she believes the fees boil down to one thing.
“DoorDash is extorting Seattle,” Sabio-Howell said. “It has never once shown its numbers to explain why fees to cover operational costs are necessary.”
At the same time, a wave of lobbying continues to be seen from both sides.
Sabio-Howell pointing to DoorDash spending more than a hundred thousand dollars per month on advertising campaigns – mostly targeted at the city council and against the wage law.
“(DoorDash) undermines its own credibility when it tries to say things like, this new $2 fee, that previous $5 fee are necessary for operational costs,” said Sabio-Howell. “I think it’s more than obvious that these corporations can pay their workers a living wage, and it’s a political choice not to.”
KIRO 7 reached out to the Seattle City Council for comment. A spokesperson responded saying, “At this time the councilmembers are passing on interview requests because they have no substantive updates to share… Procedurally the legislation is in a holding pattern.”
The new DoorDash fees take effect Aug. 1.
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