Food-delivery apps have responded to cities’ new wage-increase requirements for gig workers by ratcheting up fees. Now, they are contending with frustrated consumers, plunging restaurant orders and an exodus of delivery drivers.
Lawmakers in New York City, one of the cities where pay increases for delivery drivers recently were adopted, say that their changes have worked well for workers. Seattle, which implemented similar rules this year, is planning to roll them back because of “outcry from drivers and restaurants over its devastating” impact, Seattle City Council President Sara Nelson said.
The delivery companies — whose businesses are built on gig workers they don’t employ full-time — say they can only afford to pay so many workers under the two cities’ latest pay standards. The cities want the companies to pay couriers a minimum hourly wage based on the time they spend delivering orders and reward the most efficient workers. New York City now requires that the companies pay couriers at least $19.56 per hour before tips, up from an average of $5.39 per hour before its rules went into effect in December.