Seattle's PayUp law faces challenges impacting gig workers' earnings

Seattle's PayUp law faces challenges impacting gig workers' earnings

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Nidhin George Senior Vice President, Product | Grubhub

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Seattle's PayUp ordinance, enacted at the beginning of 2024, aimed to provide gig workers with a minimum wage of $26.40 per hour before tips, significantly higher than the city's minimum wage of $19.97. However, by 2025, the law has led to several unforeseen issues affecting drivers, restaurants, and customers.

Grubhub data indicates that driver earnings have been negatively impacted, wait times have increased, and both restaurants and customers face challenges. The delivery ecosystem in Seattle is experiencing a decline in orders, resulting in fewer earning opportunities for drivers.

Small independent restaurants are particularly affected as they grapple with rising costs and decreasing demand. Customers are also encountering longer wait times and higher delivery costs, making services less convenient.

Drivers find themselves waiting longer between deliveries due to fewer orders and an unregulated number of drivers on the road. Grubhub reports that Seattle drivers now wait about 110 minutes longer for their next delivery opportunity—a 578% increase from the previous year—leading to an average earnings decrease of 36% per online hour compared to pre-PayUp implementation.

Tips, a crucial component of driver income, have decreased by over 30% per delivery. This reduction further pressures drivers financially as customers tip less due to increased service costs.

The situation calls for a reassessment of the PayUp law by Seattle's City Council. A balanced solution is needed to ensure fair compensation for drivers while maintaining an efficient system that benefits all parties involved: drivers, restaurants, and customers. Grubhub expresses its commitment to working with policymakers and stakeholders to develop a sustainable approach that supports the delivery ecosystem.

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