DoorDash announces it will drop $4.99 regulatory response fee with passage of compromise bill in Seattle

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Tony Xu, CEO of DoorDash | LinkedIn

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DoorDash announced that the Seattle City Council did not vote on the bill aimed at amending the Delivery Pay Ordinance to reduce costs. DoorDash stated it would remove the $4.99 Regulatory Response Fee if the bill is enacted.

On May 31, 2022, the Seattle City Council approved the App-Based Worker Minimum Payment Ordinance, SMC 8.37, which took effect on January 13, 2024. This ordinance introduces significant protections for app-based workers, ensuring they receive a minimum compensation of either $0.44 per minute worked and $0.74 per mile traveled per offer or a minimum of $5 per offer. According to the Ordinance webpage provided by the city of Seattle, it mandates transparency by requiring platforms to disclose offer details upfront and provide workers with access to payment records.

The compromise bill aims to ensure Dashers earn a minimum of $19.97 per active hour, contrasting with the current requirement of $26.40 per active hour plus additional compensation for mileage and tips. According to DoorDash's press release, the higher pay standard has led to increased consumer costs, resulting in reduced orders, fewer earning opportunities for Dashers, and decreased revenue for local businesses. Between February and May 2024, merchants on the DoorDash Marketplace in Seattle saw an estimated $14 million less in earnings, accompanied by a decline of 590,000 delivery orders. As a consequence, Dashers are experiencing longer wait times for delivery offers and lower average hourly earnings by 13%.

Founded in 2013, DoorDash is a tech company linking consumers with local businesses across more than 25 nations globally. According to its Overview webpage provided by DoorDash, it provides solutions to bolster business expansion and customer engagement. Primarily concentrating on local commerce infrastructure, DoorDash supports merchants in adjusting to the convenience-driven market while serving as a source of employment for job seekers and broadening consumers' access to community amenities.

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