Companies like DoorDash and Rover may be required to pay a 10-cent per-order fee if a new proposed ordinance makes its way through Seattle City Council.
The bill, CB 120706, would use revenue generated by the fee to help pay for the implementation and enforcement of recently passed “PayUp” gig worker protection laws in Seattle: one that sets minimum wage policies, and another related to regulations for the worker deactivation process.
The bill, referred to the City Council last week, would require “network companies” operating in Seattle to pay the fees and obtain an annual license. For-hire transportation companies including Uber and Lyft would not be subject to the fee.
The proposal is projected to generate at least $2.1 million per year, based on a estimate of 21 million online orders per year, and would go into effect January 2025.
“These vulnerable workers in this under-regulated industry are calling out for us to put our money where our mouth is and fund the enforcement of the protections we have approved as a council,” Seattle councilmember Lisa Herbold, lead sponsor of the bill, said in a budget meeting last month.
The city’s Office of Labor Standards does not have enough existing revenue to cover the costs of implementing the two gig protection laws, according to a summary note of the new bill.
“Without this funding, the OLS will not be able to fully enforce the law,” Herbold wrote in a guest post last month in The Stranger.
In that post, Herbold called out grocery delivery giant Instacart for allegedly sending marketing materials to Seattle customers asking to oppose the new bill.
However, the bill exempts groceries, which would somewhat insulate Instacart from paying the fees.
“Their real concern is that OLS will have all the funding it needs to uphold the law,” Herbold wrote.
In a statement, Instacart said the proposed tax “forces residents to foot the bill for an ill-advised ordinance amid record inflation and tightened budgets.” It called the license “duplicative and unnecessary.”
This past summer, DoorDash agreed to a $1.6 million settlement with the City of Seattle over allegations that the company violated a paid leave ordinance passed in 2020 to provide gig workers with paid sick and safe time during the pandemic. A new permanent law passed earlier this year.
We reached out to DoorDash about the new 10-cent fee ordinance and they provided the following statement.
“With families and businesses facing rising costs and record inflation, this is the wrong time to make essential delivery services more expensive,” a DoorDash spokesperson said in a statement. “Instead of trying to pass a fee on deliveries that will make life more expensive for consumers and potentially reduce orders from businesses, we urge the Council to seek solutions that drive affordability and support local businesses.”
Update: The Washington Alliance for Innovation and Independent Work issued a press release Monday, calling the proposal “a backdoor tax that inflates the implementation costs and provides significant revenue for education and outreach.”
Seattle wants to charge gig companies 10 cents per order for new license fee by GeekWire on Scribd
