Nelson’s Gig Worker Sub-Minimum Wage Proposal Postponed at Eleventh Hour

For Immediate Release: 

May 28, 2024

Contact: Hannah Sabio-Howell | hannah@workingwa.org

The worst pay standard proposal in the country postponed within an hour of Council’s scheduled vote, workers react

Following news of the postponement, delivery drivers remark on the proposal as a reflection of Seattle’s values that workers deserve a living wage and inclusion in stakeholdering about policies that affect us

Seattle, WA – Council President Sara Nelson announcing that she’s postponing the vote on her own policy to reduce gig workers’ wages, less than an hour before the vote was scheduled to take place, communicates two things. 

One: worker organizing works. For the last four months, despite being deliberately excluded from any stakeholdering process on Nelson’s policy to gut the PayUp ordinance, workers have shown up at city hall to urge the council to protect minimum wage after expenses for all time worked, hold a meaningful stakeholdering process, and listen to workers. This abrupt delay is a sign that workers are gaining momentum.

Two: cutting low-wage workers’ wages is extremely unpopular and poor economic policy-making; Council President Nelson simply doesn’t have the support from her colleagues or the public to pass this pay cut into law. 

Ultimately, this sudden change of plans reveals what workers already knew to be true: raising wages is good for Seattle, and cutting wages is supported by no one but app corporations. And those corporations dumped hundreds of thousands of dollars into trying to mislead the public and lobbying councilmembers with the message that cutting workers’ pay is somehow good for workers, only to find out that the home of the Fight for $15 is true to its values. We all know that all Seattle workers deserve a living wage.

Comments from workers are included below. Contact Hannah Sabio-Howell to arrange an interview.

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From Nick Lawrence, an UberEats, DoorDash, Instacart, and Roadie worker: “PayUp has meant I no longer have to work 60-hour weeks to get by. Without standards, gig work is a race to the bottom. I’ve been heartbroken watching city council move forward a corporate proposal to cut pay, but hundreds of gig workers have spoken out against the pay cut, and it looks like it’s working. I’m glad to see city council is finally listening, and I’m glad to have more time under the current pay standard so I can continue working a normal schedule.“

From Troy Donald, an UberEats and DoorDash delivery worker: “After minimum gig worker pay came out, I was making great money. Then Uber and DoorDash came out and said they want to cut the pay – so they can go back to paying $3 for orders that charge $20 in fees. Gig workers have been making it very clear: cutting our pay is not a solution to apps choosing to charge outrageous fees. And now it looks like city council is actually listening. It’s awesome to know that fellow drivers and supporters have slowed Sara Nelson’s progress.”

From Elena Martin, an Instacart worker: “I’m beyond excited that the vote is being postponed. I believe Sara Nelson may have thought it would be easy to make this change and that us gig workers wouldn’t care. I’m glad enough of us have shown up and participated in opposing this proposal that she is now seeing just how many of us this will affect and how many of us do care.”

From Mupopa Tshibuabua, an UberEats worker: “It’s important for workers that we keep the pay standard in place because now we can take every single job and it’s worth it. We can’t let Uber and DoorDash go back to paying $3 a job. As a driver, I certainly want to see struggling restaurants succeed. These restaurants should focus on corporate greed rather than equally struggling drivers as their obstacle to success. The postponement of today’s vote is a good sign for workers – let’s hope the council is taking the necessary time to reconsider the proposal clearly advocated by the lobbyists.”

From Justin Taylor, a DoorDash worker: “Sara Nelson wanted to rush her bill through city council because reducing pay for workers in Seattle is hugely unpopular, and she knows it. But because workers and their supporters showed up in opposition – and will continue to show up – there is now an opportunity for our voices to be heard. I’m hopeful the vote delay means that city council will engage in a true stakeholder process with the gig workers like myself who are directly affected by this bill.”

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Which side are they on? Uber’s, apparently.

TODAY, the Seattle City Council Governance Committee voted to side with Uber and DoorDash and cut gig workers’ pay to just $13.17/hour while  rolling back their rights. Meanwhile, they did absolutely nothing to control the companies’ excessive junk fees – leaving Seattle workers, restaurants, and customers paying the cost of the apps’ greed.  — ignoring the overwhelming sentiment at meeting after meeting to cut fees, not pay. 

If that all sounds like a policy written by Uber & DoorDash, for Uber & DoorDash, that’s because it was. Nelson’s CB 120775 was crafted in a rushed, secret process entirely controlled by Uber, DoorDash, their lobbyists, and Drive Forward, an organization founded, funded, and controlled by Uber. 

No other groups were part of the process — no groups representing workers, customers, immigrant communities, or national national experts on labor policy. The city’s Office of Labor Standards wasn’t even invited to participate. Just the apps, their lobbyists, and an organization they control. And they got what they paid for.

The vote was especially disappointing given that recent polling shows only 18% of Seattle voters support Seattle City Council President Nelson’s proposal to repeal gig workers’ minimum wage. In fact, 64 percent of voters support capping the fees that delivery apps like Uber and DoorDash can charge consumers. Everyone agrees – the fees are the problem, and yet this amendment does nothing to address them or to provide any support to local businesses. 

Councilmember Hollingsworth’s vote to abstain and call for stakeholdering was a welcome moment, as she highlighted the urgent need for a process that brings workers and small businesses to the table. 

The gig worker pay cut goes before the full council on May 28th. Ten years after becoming the first city to pass a $15 minimum wage, Seattle could soon become the first city to cut gig workers' pay to a subminimum wage, and intentionally exclude them from basic labor standards. 

“Today’s vote is an unprecedented and targeted vote against workers. Seattle is one step closer to being the first major city to roll back gig worker pay to below minimum wage. This is still far from an ordinance that will help workers or local businesses. We are encouraged by Councilmember Hollingsworth’s interest in stakeholdering and developing data driven solutions that will actually meet the needs of Seattle’s workers and small businesses.” — Danielle Alvarado, Executive Director, Working Washington

More information:

• The Nelson/Uber/DoorDash bill would cut pay to a subminimum wage of $13.17/hour. While it claims to pay the gross minimum wage, gig workers are responsible for paying all their own taxes and expenses out of that rate, and are only paid for their time actively delivering an order. Once you account for that additional time & expense, the bill pays $6.80/hour less than minimum wage. 

• Latest polling of Seattle voters shows only 18% support Seattle City Council President Nelson’s proposal to repeal gig workers’ minimum wage. By rushing through this corporate written legislation, the council is not listening to what their constituents clearly value.

• Uber stated on their most recent earnings call that “we have been able to absorb the financial hit of all these different regulations in our platform. You've seen in our profitability, which is up over 80% in Uber Eats on a year-on-year basis.”

• DoorDash recently reported gross profit margins of 44.9% — meaning that they pocket almost half of total customer fees, after paying the worker who did the actual work.
  
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  Gig workers, policy experts, and community supporters are available to discuss the implications of this proposal. Contact Hannah Sabio-Howell (hannah@workingwa.org) to arrange.

Nelson’s Gig Worker Sub-Minimum Wage Proposal Fails to Deliver Lower Fees

Proposed Seattle gig worker ordinance would eliminate minimum wage for delivery workers and hope the benefits trickle down

Nelson’s proposal would slash pay, reduce transparency, and effectively eliminate flexibility protections while doing nothing to address excessive fees or the availability of jobs for bike delivery workers

After a three-month big-dollar lobbying campaign by DoorDash and other food delivery corporations, Council President Sara Nelson has released a proposed new delivery ordinance which fails to deliver lower fees to customers, and fails to provide any relief for bike couriers. The proposal would simply reduce worker pay well below minimum wage, in the hopes that it will trickle down to customers in the form of lower fees instead of simply being pocketed by the app corporations.

Nelson’s proposal provides no assurances that fees will in fact be lowered – in fact, the new law allows companies to collect even more fees, this time from the workers themselves, for seeking to be paid for their work. The multi-billion-dollar app corporations would be allowed to pay workers far less than minimum wage, continue to throttle bike delivery jobs, and gouge customers with any fees they’d like, for whatever reason they’d like. They wouldn’t even be required to disclose how much of those fees is being paid to workers and how much is being pocketed by the companies.

This wildly unbalanced, rushed proposal is the natural result of poor governance and an illegitimate stakeholdering process. In fact, City Council visitor logs indicate Nelson has developed this proposal with input exclusively from the app corporations themselves, the lobbyists they pay, and an organization they founded and fund.

Key changes proposed in CB 120775

CB 120775 is a long, complex piece of policy which is written to gut existing city labor standards for gig workers and effectively eliminate minimum wage protections for people doing food delivery. Key sections of the proposal are noted below:

• Dramatically cut pay well below minimum wage: Section 8.37.050 B(1) of this proposal would force an immediate 24% cut in workers’ pay (from 44¢ per minute of delivery time to $19.97 per hour, or about 33¢ cents per minute) – a cut of over $6 per hour. Gig delivery workers are only paid for time actively making a delivery, and because they’re treated as independent contractors, they are responsible for paying all their own payroll taxes and covering all their own expenses. For this reason, it is necessary to pay an additional factor above minimum wage for each hour actively delivering in order to ensure take-home pay equivalent to minimum wage for each total hour of work, after expenses. (As a comparison, imagine a reporter was only paid for their time with their hands on a keyboard, actively writing a story; that reporter would have to be paid higher than $19.97/hour for active writing time in order to end up with $19.97/hour after accounting for all their work time.)

• Make workers lose money for each mile they drive: Section 8.37.050 B(2) of this  proposal would cut workers’ pay for mileage in half to an arbitrary 35¢ a mile — dramatically less than the standard IRS mileage rate (currently 67¢) that determines mileage pay for almost every other worker who uses their personal vehicles for work purposes, from city contractors to state lobbyists to UPS drivers who use their personal vehicles for seasonal deliveries. The IRS rate is the gold-standard method of accounting for the cost of driving, and a per-mile rate so far below the IRS rate means that workers would be losing money for each mile they drive. 

• Do nothing to control excessive fees: This proposal would do literally nothing to compel the app corporations to lower excessive junk delivery fees — the phrase “ customer fee” does not even appear in the proposal. While the fees the companies charge to restaurants are currently limited by city law, no such protection against excessive fees would be extended to customers or to workers. The entire idea is to slash workers’ pay, take away their rights, and hope the benefits trickle down. 

• Do nothing to address app corporations’ decision to throttle bikers: This proposal would do literally nothing to compel the companies to equitably offer jobs to bikers — bike couriers do not even appear in the proposal. The reason bikers are being cut off from deliveries is that apps’ algorithms may determine that drivers are faster on average and therefore cut off bicyclists’ access to most orders. Reducing every worker’s pay while still setting time-based minimum rates does nothing to address this disparity, and likely will not improve job availability for bikers at all.

• Eliminate disclosure requirements on fees and orders for customers, workers, and the city: Section 8.37.070 of this proposal would eliminate current rules requiring that app corporations disclose information to the city about pay rates, fees, commissions, and order volume. It would also dramatically reduce transparency for customers and workers. In fact, under this proposal the app corporations would not even be required to disclose to customers how much of the excessive fees they charge is being paid to workers, and how much they’re pocketing. And workers would no longer see a breakdown of pay and tips on offers, making it easier for companies to revert to pay models under which they previously faced public backlash for stealing tips by reducing company pay on orders with higher tips.

• Eliminate workers’ flexibility protections: Section 8.37.080 of this proposal would allow the app corporations to treat workers more like employees than contractors, by allowing them to penalize workers for choosing which jobs to accept or choosing when to work. The corporations could penalize workers in whatever way they want — including by denying them access to any jobs at all — as long as a "contract" is still in place, regardless of whether they still get offered any jobs. This would effectively eliminate all flexibility protections.

• Eliminate workers’ ability to enforce their rights in court: Section 8.37.230 of this proposal would eliminate the “private right of action,” denying workers the ability to protect their rights in court if the app corporations break the law. When coupled with gutting the Seattle Office of Labor Standards’ enforcement and rulemaking authority, this destroys any meaningful enforcement of the law.

Gig workers, policy experts, and community supporters are available to discuss the implications of this proposal ahead of Thursday’s committee hearing. Contact Hannah Sabio-Howell (hannah@workingwa.org) to arrange.