Consumers in Seattle will now experience higher service fees on all orders, starting this month. DoorDash, which reported $3 billion in revenue in the first quarter, considers Seattle the most expensive market for delivery in the U.S.
The company did not disclose the exact amount by which fees will increase. This decision comes as a new law regarding driver deactivation is put into effect. The law, passed by the Seattle City Council in August 2023, aims to provide more job security to app-based couriers and delivery drivers.
Under this law, companies are required to give a 14-day notice before deactivating workers, base deactivations on reasonable policies, and provide workers with records explaining the decision. The ordinance received support from gig worker advocacy groups who believed it would protect workers from unfair deactivations.
This legislation is part of Seattle’s efforts to regulate the gig economy and is the first of its kind. It applies to gig workers involved in food delivery, grocery shopping, and other on-demand tasks through apps.
Uber and Instacart filed a lawsuit against the law, but a federal judge denied their effort. The law became effective in January, with detailed implementation guidelines issued in June. The city’s Office of Labor Standards has received over 150 worker inquiries and has helped workers with reactivation.
Companies must report certain records quarterly, and starting in June 2027, the city can investigate if workers were deactivated for valid reasons. Last year, companies like Instacart, Uber, and DoorDash faced challenges from Seattle lawmakers over a minimum wage law, leading to new fees being added.
DoorDash mentioned in a blog post that the new regulations have impacted driver earnings and increased delivery delays. The average monthly revenue per store decreased after the minimum wage law was enforced, and there was an uptick in fraud cases, with some drivers allegedly prolonging deliveries for higher pay.
