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DoorDash signals end to $5 fee if Seattle passes minimum wage adjustments

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(The Center Square) – DoorDash is signaling an end to a $4.99 fee if the Seattle City Council passes legislation changing the city’s gig worker minimum wage law.

Since January, Seattle’s “PayUp” ordinance established a gross minimum wage for app-based delivery drives at $26.40 per hour without the inclusion of tips. Companies like DoorDash and Uber Eats retaliated by implementing a $4.99 regulatory response fee that caused online orders to jump in price.

Delivery drivers have told The Center Square that they are seeing a dramatic decrease in orders, causing them to make less than prior to the PayUp law. Restaurants in the city that rely on online orders are also suffering from losses of revenue.

According to new data from DoorDash, estimates show that merchants in Seattle earned $14 million less than they otherwise would have on the DoorDash Marketplace between February and May of 2024, and there were 590,000 fewer orders for drivers to deliver in the same time frame.

The city council is set to vote on Council President Sara Nelson’s Council Bill 120775, which would make minimum wage adjustments, reduce the per-mile rate, and remove the mileage factor from the current minimum wage law, resulting in a minimum payment standard of $19.97 per hour, along with 35 cents per mile for engaged time while driving. Tips would not be included in the minimum payment.

“To be clear, DoorDash is fully supportive of the compromise bill that would guarantee Dasher earnings of at least Seattle’s minimum wage of $19.97 per active hour, and will remove our $4.99 Regulatory Response Fee if this compromise is enacted,” DoorDash Head of Government Relations for the Northwest Anna Powell said in a statement.

Last week, the Seattle City Council chose to prolong a vote on the proposed fix. Powell referred to the PayUp policy as “bad policy” and said it is harming communities in Seattle.

“Despite making this clear to city officials, we have been met with inaction and delays,” said Powell.

Nelson’s proposed legislation is up for a final vote by the Seattle City Council on June 11.