Seattle ordinance intended to help app delivery workers is 'hurting' them

https://www.king5.com/article/news/local/seattle-ordinance-intended-app-delivery-workers-hurting-them/281-9516c79c-3161-41f3-a662-798b9db16d3f

by tomohawk • 2 years ago

41 118 2 years ago

king5.com

nullindividual• 2 years ago

Unsustainable business is unsustainable. News at 5. Or 11. Or maybe noon. Whenever news that isn't really news is aired.

Even without the additional city-based fee, these food delivery services companies are far too expensive.

CamperBob2• 2 years ago

It was 'sustaining' just fine until City Hall got involved.

monero-xmr4• 2 years ago

“These services hurt workers! Let’s force them to charge more and pay a living wage!”

“Well those jobs were bad anyway, we are all better off without them”

phmqk763• 2 years ago

Funny, that’s the same exact (bad) argument against the minimum wage…

phmqk763• 2 years ago

Not sure why people are disliking your comment. You are absolutely right - a business that cannot turn a profit while paying even the most basic wages (I wouldn’t call $15 per hour “living”) has no business existing. How did people in the 1930s understand this and pass the Fair Labor Standards Act, and yet highly-educated techies fail to grasp this simple concept?

mschuster91• 2 years ago

How did people in the 1930s understand this and pass the Fair Labor Standards Act, and yet highly-educated techies fail to grasp this simple concept?

People in the 1930s came right out of the Great Depression with 25% unemployment rate. Stuff had to change, and radically at that, which is why FDR got elected.

Today's techies, meanwhile, are largely decoupled from the actual realities of the people. We live in decent homes with fat paychecks, and despite us working for the same company as the barely-surviving delivery driver, our lives rarely intersect other than at the next food delivery.

pierat5• 2 years ago

How did people in the 1930s understand this and pass the Fair Labor Standards Act, and yet highly-educated techies fail to grasp this simple concept?

Because the "highly-educated techies" think of themselves as the next potential big founder over a tech company taking lumps of money from each transaction and making it big.

Closing that form of exploitation closes down all of those techies' wet dream of exploiting millions to be the next (pee-bottle) Bezos.

elevatedastalt5• 2 years ago

And yet people were using them more until the city decided to add the extra fee. Just because a cost is added by the government doesn't make it immune to the demand-supply curve.

__derek__• 2 years ago

Anecdotally, some factors I've heard that make YoY comparisons questionable:

1. With RTO, folks are more likely to eat out during the week (especially for places in SLU), so weekend demand is probably lower

2. With commutes, folks are more likely to pick up on their way home, so demand for delivery is probably lower

3. With the poor level of service, folks are more likely to pick up in order to ensure that their food is actually edible

King5's post itself notes another potential confounding variable: more drivers.

andy_xor_andrew• 2 years ago

Living in Seattle, every election the ballet was filled with items like these, which sound great and have good-faith intentions that are totally in line with my own personal convictions.

But I guess policy needs to be studied--really studied--examined from all fronts, tested with the full weight of reality.

If you ban X, what replaces it? Y? Is Y really better? If you add a charge of Z to support certain industries, how does that shift the economics? You can't just assume that a $5 charge means $5 more in the pocket of everyone in that industry.

mhb• 2 years ago

You can pretty assuredly assume that, when you increase the price, demand goes down.

HPsquared2• 2 years ago

Bastiat's "seen and unseen".

drewcoo4• 2 years ago

"In good faith" or "with good intentions" mean the same.

Isn't every referendum system plagued with that problem. Want a second opinion? Ask any Oregonian!

The alternative is to have elected officials write and pass laws. But they're elected because of popularity, not legal prowess. "I could drink a beer with them" is almost never "they are clearly best qualified to write the rules by which we all live."

As Churchill never said (but not originally), "the worst form of government except for all those others that have been tried."

sethrin• 2 years ago

Note that the various platforms have changed their UI to discourage tips, and my impression is that they are doing their best to communicate the reason for the price increase, and it's not possible to determine whether the increased fees are actually in proportion to the increased cost (if any).

I can't speak to how any of these companies think about this ordinance, but I do think they have an incentive to ensure that this ordinance fails, and a great deal of influence on its success.

NovemberWhiskey11• 2 years ago

In NYC, the UI for GrubHub used to default to (I think?) something like a 20% tip; now it defaults to 0% and there's some kind of explanatory text about this.

I think you missed the reasoning though - they don't want customers to feel obliged to tip 20% on top of the increased prices, which they'll do less often or stop doing entirely. It's more like "you don't need to tip because a living wage is baked into the price now".

marssaxman• 2 years ago

you don't need to tip because a living wage is baked into the price now

That sounds like a really good change! Tipping is such an archaic mess.

Cupertino950142• 2 years ago

When people claim that minimum wage laws don't hurt workers, there's an implicit assumption that the jobs would always exist anyway, and costs will just be passed on.

Sometimes that may be true. Other times, you're just getting rid of a certain class of jobs.

rootusrootus• 2 years ago

When I visit Hyderabad I'm reminded how nice it is to have an underclass, provided you are not a member of that class. Many services are practically free compared to the US.

Not sure I think we should create that here, though.

Edit: Wow, judging from downvotes it seems there are some folks here on HN that would like that underclass! Interesting!

AJ007• 2 years ago

Minimum wages serve a political purpose, but they also force automation on an economy. One can study various countries which had very cheap labor pre-1900, and see how far behind they got (e.g. China.)

What would the global economy look like without cheap labor? One can only guess.

Cupertino950142• 2 years ago

Maybe you should ask one of these gig workers if they feel better off now than before? Instead of making spurious comparisons to Hyderabad.

kevingadd4• 2 years ago

I've seen enough stories about how gig workers struggle to actually turn a profit thanks to all the costs that get offloaded onto them, so I don't know that 'getting rid of a certain class of jobs' is automatically a bad thing.

floatrock2• 2 years ago

Yeah, that's the tricky part that this seems to come down to.

A decision was made that a slave-wage is undesirable/illegal, so the wage-slave job goes away.

The argument is about do you believe people should decide for themselves that the wage-slave job is better than nothing, or should the government dictate that we don't tolerate wage-slaves by slave-wages here.

It gets messy because the "people should decide" message shares the same outcome as "corporates get richer", so strong incentive for the latter to amplify the former.

This whole story echos those union fights in our history textbooks.

edgyquant• 2 years ago

If these people didn’t turn a profit no one would do the jobs, as they’d be losing money in each order. They may not be happy with that profit, but it’s a profitable gig

NovemberWhiskey11• 2 years ago

how gig workers struggle to actually turn a profit thanks to all the costs that get offloaded onto them,

Well, OK, I guess they could not do that then? McDonalds is hiring in NYC and paying a minimum of $16 an hour.

I do feel for people in that situation, but they're just getting greased in the collision between, on the one side, techno-utopian companies that want to bring in automation ASAP to eliminate their jobs and, on the other, big labor that is threatened by the gig-economy model and believes the better outcome is just for the jobs not to exist.

I'm pretty sure that the participants in the gig economy just wanted it to pay a bit better, rather than for it to get annihilated. I guess you find out who your friends really are.

sgift• 2 years ago

I cannot read the original article (seems to be blocked in the EU? I get access denied), but since this is a general comment:

If the only reason that a job could exist was that people had another job and/or got government subsidy this means the job shouldn't exist - it's not societies' job to support bad companies.

So, if they "just go away" that's okay. Give the people who don't have a job now government support and training to get a better job. At least the companies who tried to get rich by exploiting people stop existing then.

thrill• 2 years ago

You say "it's not societies' job to support bad companies" and " Give the people who don't have a job now government support and training to get a better job".

Do you not see the contradictions? Who is paying for that "government" support and training? Taxpayers have money for taxes because they work for a profit - else they cease to exist, or to appease the economically illiterate the politicians run societies into such debt that everyone (including those dastardly "exploitive companies") ceases to exist.

kevingadd4• 2 years ago

I stopped using DoorDash once I saw the big 'every delivery costs an extra $5 now thanks to Seattle' modal on their front page because it's so dishonest. If they really have to jack their fees up that much and it's not a variable cost I can tell they're just trying to manipulate me.

I don't mind fees going up some, and in contrast GrubHub isn't playing games - the fees are just higher now. That's fine if it means the drivers are getting paid more. I noticed that they adjusted the default tip percentages to be lower, so it seems like the actual cost of an order by default probably isn't higher. If the driver earns the same amount in the end (or more) that just means I'm spending less money on the "tip".

EDIT: Thinking about it more, the "their wages have been slashed" phrasing in this article is also deeply dishonest. They weren't wage workers before, and still aren't! They're freelancers who rely on a steady flow of gigs and tips to earn enough every hour. If the flow has slowed then of course they're going to earn less. We can argue that the ordinance caused the flow to slow down but other factors could be at work too, like the apps adjusting recommended tip percentages.

TMWNN4• 2 years ago

I stopped using DoorDash once I saw the big 'every delivery costs an extra $5 now thanks to Seattle' modal on their front page because it's so dishonest.

How is that dishonest? DoorDash's costs have risen because of the new law. The first three seconds of the news this discussion is about explicitly mentions the "$5 fee".

I don't mind fees going up some, and in contrast GrubHub isn't playing games - the fees are just higher now

You no doubt supported the law, just like all other good bien-pensants. You just don't like seeing the consequences clearly spelled out.

kevingadd4• 2 years ago

DD is dishonestly saying "the cost of this new law is $5/order". That's obviously not the case.

GH just actually adjusted prices so that they are not (presumably) losing money. I'm fine with that, and they show me the new fees.

bfeynman• 2 years ago

Not really about the framing of these policies. What it really should be is 'new rules to limit exploitation of workers reduces exploitation'. What the US has too much of, is providing people just enough support that you have legions of people lining up for jobs that are effectively subsidized by tax payers. These services should not really exist at the current price point and scale.

JumpCrisscross• 2 years ago

it really should be is 'new rules to limit exploitation of workers reduces exploitation'

The transition is predictably painful. A foreseeable effect of raising labour costs in one part of the market, and an elastic one at that, is lower employment there. Passing a law like this without any support for the workers whose income you're destroying is hard to position as reducing exploitation. If anything, it's exploiting them as symbols, a modern White Man's Burden by Seattle's electeds.

advisedwang• 2 years ago

There seems to be a choice between a lot of poverty-level jobs (with low consumer prices) and fewer living-wage jobs (with high consumer prices) and it's legitimate for a government to opt for the latter with something like this ordinance.

The problem comes that switching requires those jobs to go away. Even in the best case that's going to be very painful for the workers that lose their poverty-level job and have nothing. But what this article is highlighting is even worse - because of the way gig job works there isn't even a switch to fewer jobs livable-wage jobs, just less work spread between the same people. Hopefully that's temporary but it's not clear cut.

I think this is an example of a very painful policy choice. It might be the right decision long term but still can be a damaging transition.

balderdash4• 2 years ago

Why is this the better in choice in the long run?

Don’t get me wrong - nothing would make me happier than abundant living wage jobs, but if the demand isn’t there to support them, isn’t poverty level more poverty level jobs in the aggregate a better outcome than a binary outcome?

phmqk763• 2 years ago

Obviously no. This is the reason we have the minimum wage and labor laws. I can’t believe this is even a serious question

unethical_ban• 2 years ago

The flipside of those who may go "aha, price controls on labor don't work" are

* Changes in demand unrelated to the fee

* (as noted in the article) A flood of labor supply since people may have thought Doordashing was a good job due tothe bill

* A change in price making people realize they don't need to waste money on delivery

* People dumping Doordash because they're assholes for passing costs onto the customer

As we've seen from megacorps in the past, they will 100% sabotage local markets in order to make workers' rights or attempts at taxation fail.

(edit to reorder)

balderdash4• 2 years ago

Why is that people are surprised when basic economic principals hold true? I’m not saying it’s completely explanatory, but why would anyone be surprised that increasing costs 10-25% would decrease marginal demand or encourage substitution?

HPsquared2• 2 years ago

Good politics is bad economics; good economics is bad politics.

cupcakecommons6• 2 years ago

It becomes good politics when people realize everything is much worse like in Argentina. It's remarkable Seattle, Portland, and SF haven't decisively reached this state yet.

paxys5• 2 years ago

There is no world in which you get food delivered to your door whenever you want for ~$0 extra while the person delivering it makes $20/hr + benefits, healthcare, vacation. It simply doesn't make mathematical sense. The possibilities are (1) you pay a lot, (2) drivers get paid nothing, (3) the whole thing is subsidized by VCs, or (4) the service doesn't exist at all. With option 3 taken away and the public at large against 1 or 2, it seems like 4 is what we will be left with.

babypuncher• 2 years ago

1 and 4 are the only viable options, full stop. If a business cannot sustain itself without piling on debt or abusing its employees, then it simply should not exist.

potatolicious• 2 years ago

What we've suddenly discovered is that having servants on-call costs a substantial amount of money.

Which is what all of the gig economy services are - you have always been able to get driven around - they were called limos and chauffeurs. Likewise the wealthy have been having servants fetch their dinner for decades, if not centuries.

With a container ship full of VC money our industry was able to sustain an illusion for some years that servants can be had for cheap. Turns out the basic economics of having servant(s) hasn't been disrupted by technology.

NovemberWhiskey11• 2 years ago

... and yet there were so many people who wanted to do the job for the existing pay. I'm not in any sense suggesting these were great jobs, but I'm pretty sure people made at least minimum wage (based on how much I tipped and how long deliveries took).

If you took a straw poll, I think you'd find a lot of drivers in favor of higher pay and not so many in favor of higher pay but zero hours.

lock-the-spock• 2 years ago

All depends on the setup. Pizza delivery run by the individual small shop has worked for 50+ years; they pay two cooks and two drivers and a waiter and feed hundreds of people a night while earning just fine. A single place to order all food from all restaurants at any point? Well something needs to give...

Alternatively it's simply time for people to learn to cook simple foods again, a pasta with alfredo sauce, fried potatoes with eggs and a salad, or a spinach quiche (with a 1€ supermarket crust) are all quicker to make myself than I get through any app's ordering process (ignoring here the waiting time for both processes to finish).

paxys5• 2 years ago

It only "worked" because pizza delivery drivers had to bring their own vehicles, made below minimum wage and were working for tips (AKA exactly what we don't tolerate today).

balderdash4• 2 years ago

Or option 5) restaurants pay for their own delivery people which seemed to work just fine (pizza places have been doing it forever (I’m assuming profitably))

cupcakecommons6• 2 years ago

The key here is that it's worked for restaurants with historically decent margins (pizza) it likely won't work for most restaurants

elevatedastalt5• 2 years ago

Pizza delivery drivers drove their own cars (and paid for maintenance and everything) and replied heavily on tips. So basically the same situation as now, but unlike earlier, it's apparently no longer acceptable.

neltnerb• 2 years ago

I don't so much mind paying extra to the person doing the delivery, I get frustrated when I have no insight (intentionally) into how much of the fees and surcharges (or even tips) are supporting delivery driver salary and benefits versus being a convenient way for a company that mostly exists virtually to increase their fees without it being obvious.

I will absolutely call a place and order on the phone if it avoids grubhub extracting an extra $10 in fees from both sides of the transaction... and give the delivery driver the difference in tips. But yeah, less frequently than I did when VCs were subsidizing the cost.

xboxnolifes• 2 years ago

So much this. I'm the asshole if I tip $0, but I have no insight into how much the delivery driver is making. Am I tipping on-top of a full salary? Am I tipping to someone who is paid entirely through tips? No idea. Instead you play the game of guessing how much you're supposed to pay for services.

Either bundle in the driver's payment into the fees entirely, or don't at all. Let's drop this game of having to guess how much to tip to make up for what the company is not paying the drivers.

seanmcdirmid5• 2 years ago

(5) automation.

Take the humans out of the delivery business and you get more flexibility on pricing. Self driving cars could do it if you are willing to meet the outside. Drones also, although I think the power costs will never work for air delivery, so it will need to be grounded somehow.

NovemberWhiskey11• 2 years ago

Right; I guess the only reason investor money keeps flowing in here is the need to maintain market position (and the implied flow of data) until automation displaces enough of the people. That's the pot of gold at the end of the rainbow.

drewcoo4• 2 years ago

I suspect it might be easier and less open to litigation to have robots make the food. Or manage the restaurants.

wyre• 2 years ago

My heart goes out to everyone relying on these delivery jobs to make ends meet, but it is and always has been an unsustainable market and it’s great that this ordinance is revealing this. The delivery companies do the barest minimum to support their drivers and allow anyone with a vehicle and desperate for income to compete for delivery orders. The article alludes to the problem of too many drivers, which is the bigger issue than customers ordering less because of an additional $5 fee. I wouldn’t be surprised if TFA is only politicizing the ordinance to when people have fewer reasons to order delivery while the numbers of people needing to supplement income goes up (cost of living increasing faster than wages).

fritzo2• 2 years ago

"ends meet" what a delightful veganization, as if the two ends --your expenses and income-- just barely meet. I used to literally buy the packaged ends of meat and cheese, which grocers sell for less because they're closer to expiry date.

komadori• 2 years ago

I was so surprised by your comment that I had to check that I hadn't been using the wrong word all this time! However, I don't think it's a veganisation, as you put it.

Usage of "ends meet" dates back to at least the 17th century with uncertain origin, but possibly to do with ropes or accounting. "ends meat" seems to be a more modern derivation, sometimes given as a folk etymology for the former.

https://english.stackexchange.com/questions/66831/origin-of-...

https://en.m.wiktionary.org/wiki/make_ends_meet

https://www.oed.com/search/advanced/Quotations?textTermText0...

triceratops• 2 years ago

It's always been "ends meet". You've been using it wrong.

everforward• 2 years ago

The article alludes to the problem of too many drivers, which is the bigger issue than customers ordering less because of an additional $5 fee.

Reducing the number of drivers may increase the time it takes to deliver food, making it colder.

I don't fundamentally think "get delivery from anywhere" can exist at this price point without somebody getting screwed.

spaceguillotine• 2 years ago

Seems more like delivery apps can't coexist with a living wage because the cost is too high. If the system only works on exploitation then it wasn't a good system before.

Everyone got drunk off VC backed loss taking to corner and monopolize the market but once they gotta turn a profit AND pay a living wage we quickly realize its never been a sustainable system.

librish• 2 years ago

Before the new fees I was only using these services when I had a 50% off coupon. After the new fees it just doesn't make sense outside of being sick or a last minute group event.

It's looking like a gig economy that provides guaranteed solid minimum wages is a lot smaller than what we've had so far. It might be a good thing, though it does feel weird to forcibly be telling people "no, you're not allowed to work like that" when the work is so low commitment.

FlacoJones• 2 years ago

https://archive.is/Q6pYI

tuan• 2 years ago

Hmm I don't know if the ordinance is the main factor that leads to the decline in demand or just everything is getting too expensive nowadays. In my own experience living in the area, we've stopped ordering food since a few years ago. We also stopped going to restaurants because everything has become so expensive for us. We cook meals at home and our kids bring lunch from home.

Simulacra• 2 years ago

I don't think there's anything the government can do to improve the marketplace for gig workers. This is one time I think the government needs to stay out of it. Let the market decide.

1vuio0pswjnm7• 2 years ago

To me this just illustrates the uselessness of the "business model". No "gig" worker can make enough money from "gig work" to justify the time and effort, and if a local government forces the venture-backed "founders" behind this lets-create-a-middleman-for-everything "business model" to pay a living wage, then these cretins will just pass on that cost to customers. They will not pay for labor and take on the risk of a real business. The truth is this "business" is nothing without real workers. The "app" is worthless without real people doing real work. And so people just delete the app. It is not worth anything.

The workers are the value. If the "app developers" cannot/will not pay them a competitive wage, then the "business" dies. The ordinance did not backfire on the workers, it backfired on the middleman-based startups. Ultimately their "business" will fail. What did it cost to write an app and to take money from investors. What was risked. Maybe not much. That would explain the proliferation of these bogus middleman "businesses".

sershe• 2 years ago

Can confirm from first hand (customer) experience, I was already on the fence about delivery with all the fees (not sure how many were Seattle-specific before this - I know Ubers in Bellevue, just outside of Seattle, were considerably cheaper than in Seattle proper for a while)... after seeing another goddamn $5 fee I canceled DashPass, my orders went from ~once a week to one in 2024 so far, and I won't tip a lot anymore. The real minimum wage is always 0.

Seattle ordinance intended to help app delivery workers is 'hurting' them

Related Stories