Shagen says she’s never made so little delivering for DoorDash. Take Wednesday, Aug. 14: Shagen worked five and a half hours, hanging around Belltown during the busiest time of day. She delivered two orders; over 40 minutes of “active time,” she made $23.71.
Why are Seattleites using food delivery apps less these days? Check the receipts.
Some consumers say the fees have caused them to ditch the apps altogether, or at least to order less frequently. It’s not just consumers feeling pinched. More than a dozen Seattle delivery drivers and restaurant owners told The Seattle Times that the fees have yielded a decrease in demand that has hurt their livelihoods. Some have shuttered businesses, while others have left the industry — and Seattle — altogether.
The debate over fees and wages has been contentious, boiling over inside City Council chambers and around the internet. There’s no unanimous solution or culprit. But all parties can agree: Food delivery in Seattle has lost any remaining sheen of affordable convenience — and it’s impacting everybody’s bottom line.
Anxiety rises with fees
The PayUp ordinance — which requires the delivery companies to pay their drivers at least 44 cents per minute, plus 74 cents per mile during orders, or a minimum of $5 per order — went into effect in January.
Days later, Uber Eats and DoorDash added a $4.99 fee to all orders. Other services like Instacart followed suit. Labeled a “Regulatory Response Fee,” the companies argue the charge is necessary to remain profitable. More than half a year later, the fees remain — and Seattle orders are down by as much as 50%, according to DoorDash and local restaurant owners.
Though all parties agree there’s an issue, there’s no prevailing solution. And tensions seem to be reaching a boiling point.
Seattle City Council didn’t vote on a hotly contested amendment that would’ve lowered the pay standard before heading to a recess in August. It’s unclear whether the council will vote on any amendments or new pay laws, despite council president Sara Nelson repeatedly calling its passage “urgent.”
Meanwhile, food delivery companies are pressuring lawmakers to act. DoorDash, which estimated a dip of 590,000 Seattle orders on its app between February and May (the most recent data available), began issuing an additional $1.99 regulatory response fee on certain long-distance orders on Aug. 1.
Shagen, who lives frugally and spends her free time writing books, plans on moving out of Seattle if order volume doesn’t increase within a month.
Delivery couriers like Shagen say the discrepancy between active time — time spent responding to an order — and the time spent waiting on food is the root of the problem. The PayUp legislation only requires delivery drivers be paid for time actively completing an order, whereas similar ordinances in New York and California require workers be paid for time spent waiting for orders.
As orders slowed in response to fees, Shagen and other couriers have seen their active time plummet, even when working the same number of hours. So has pay.
And the drop in deliveries came with a secondary effect, said bike courier Gary Lardizabal. Tips have also plummeted. Lardizabal says he’s never declined a DoorDash or Uber Eats order, fielding more than 11,000 transactions. He made about $1,600 delivering for DoorDash in May, down from around $5,000 in January. In response, he got part-time jobs at Marination and Whole Foods.
Heather Nielson, a bike racer who grew to love the freedom that delivery offered after working for years as an office manager, recently returned to a job at a commercial real estate company. She says that many delivery workers, especially bike couriers who rely on volume to make up for the fact their vehicles travel shorter distances, have left the industry. Still, she understands why higher prices have led to the decrease in orders.
“Customers are suffering, too,” Nielson said. “Everybody is suffering.” (...)
Delivery-industry-sponsored nonprofit Drive Forward, which represents gig workers, leads a contingent intent on making change. In a July survey completed by more than 800 Seattle-area delivery workers, those drivers reported earning about $16.30 per hour — less than minimum wage, and less than the average hourly wage reported by workers in a 2021 survey. Drive Forward executive director Michael Wolfe criticized the PayUp law as a “one size fits all” policy. “It really is the law of unintended consequences,” he said.
Pro-labor groups disagree, arguing that the law is working as intended, and that cuts to the current wage would have negative impacts on couriers. Hannah Sabio-Howell, communications director at statewide labor group Working Washington, said the problem can be traced back to the delivery companies.
“It’s very convenient for the corporations to claim that these fees are somehow necessary, without ever having to answer for why,” said Sabio-Howell, adding that money spent on lobbying, as well as recently announced earnings reports, demonstrate that the companies are financially stable and able to afford higher wages.
DoorDash reported 645 million total orders in the second quarter of 2024, up 19% year over year, while revenue, at $2.6 billion, was up 23%. Though Uber does not report earnings by sector of its business, the company reported a similar increase of revenue in this year’s second fiscal quarter (gross bookings were up 19% year over year, with revenue up 16%).
Low order volume has meant local restaurants have suffered, too.
Karan Singh, owner of Mirch Masala and Pizza Twist on Capitol Hill, said order volume at his restaurants has dropped 50% on Uber Eats and Grubhub and 30% on DoorDash since the implementation of the PayUp law. While Singh considered hiring in-house delivery drivers to tamp down on prices for consumers, it wouldn’t have been financially viable for his business.
Businesses that employ their own drivers, like Seattle pizza chain Pagliacci, are on the hook for issuing payroll and paying associated taxes. The employees may not be able to choose their own hours, a benefit of delivering for third-party companies, but they are offered more protections as employees rather than independent contractors. (...)
Footing the bill
Skyrocketing delivery prices have pushed some customers off the apps entirely.
Approaching 6 p.m. on an April Monday, it was dinnertime for Robby White of First Hill. White opened DoorDash and placed an order from 8oz Burger & Co: a burger for himself, a plant-based sandwich for his partner, a large order of fries and two drinks. The subtotal was $59 — pricey for a simple meal, but an expected expense for a convenient meal after a hectic workday.
Then came the sticker shock. The grand total, bloated after service charges, the $4.99 flat fee, taxes and tip, was $87.73.
White was so incensed that he filed a complaint with the Federal Trade Commission.
“Maybe the $5 fee isn’t going to the drivers at all; maybe it’s going to the companies,” White remembered thinking. “I think we’re just getting ripped off.”
by Xavier Martinez, The Seattle Times | Read more:
Image: Ellen M. Banner/Seattle Times
