New city laws to boost pay for app-based delivery drivers are causing significant ripples in the gig economy. Companies have opposed local rules that raise the minimum wage for their drivers.
We’ve gathered a group of articles on this subject from SHRM Online and other trusted sources.
New Laws in Seattle and New York City
In Seattle and New York City, laws intended to bring delivery drivers up to minimum wage will also change how they are paid. Rather than earning per trip, they will be compensated on a time and distance basis or at a rate every time they are offered a job.
The rules are already eliciting challenges from companies including DoorDash, Instacart, Grubhub and Uber in the form of legal action, lobbying and public campaigns against the actions.
In Minneapolis, a similar law was vetoed last year by Mayor Jacob Frey, but city council members have vowed to take up the issue again this month. Colorado, Hawaii, Massachusetts and Washington have seen worker protection bills raised in their legislatures, while drivers in Chicago continue to organize for minimum-wage protections.
Minimum Wage in New York City
In November 2023, New York City became the first major U.S. city to implement a minimum pay rate for app-based restaurant delivery workers. Delivery platform companies must pay delivery workers the minimum pay rate of at least $17.96 per hour.
The companies must pay drivers at least once per week and tell drivers how much the customer tipped for each delivery and their total pay and tips for the previous day.
Shrinking Delivery Demand
In Seattle, laws mandating that some gig workers get sick days and a minimum hourly wage of $17.27 will take effect this month.
For lots of gig workers, delivering groceries, takeout and other items isn’t paying the bills like it once did. Demand for the delivery of many items, especially groceries, has tapered off since the early pandemic. That translates to lower earnings for many workers.
Many of the delivery services have pitched themselves for years to workers who don’t want a rigid 9-to-5 schedule. But working for the apps has started to look more like an office job, especially when it comes to working at a specific time.
Delivery Service Quitting Seattle
Citing new ordinances recently passed in Seattle that aim to help gig workers, the Target-owned delivery service Shipt informed customers this week that it will pause operations in Seattle starting Jan. 10.
Birmingham, Ala.-based Shipt works like same-day delivery companies such as DoorDash and Instacart, employing gig workers to pick and/or deliver groceries and other items. Target acquired Shipt in 2017 for $550 million.
Shipt said action taken by the Seattle City Council will impose significant operational challenges that would impact its ability to be compliant and continue providing value and service.
(GeekWire and The Seattle Times)
Was this resource helpful?
Validate your HR expertise
Earning your SHRM-CP credential makes you a recognized expert and leader in the HR field.
Related Content
Learn how Marsh McLennan successfully boosts staff well-being with digital tools, improving productivity and work satisfaction for more than 20,000 employees.
The proliferation of artificial intelligence in the workplace, and the ensuing expected increase in productivity and efficiency, could help usher in the four-day workweek, some experts predict.
As artificial intelligence technology continues to develop, the demand for workers with the ability to work alongside and manage AI systems will increase. This means that workers who are not able to adapt and learn these new skills will be left behind in the job market.