Seattle tried to guarantee higher pay for delivery drivers – here’s why it didn’t work as intended

Seattle's January 2024 minimum-pay law for delivery drivers required apps to pay at least $5 per delivery through per-minute and per-mile compensation, but labor economists studying the policy found monthly earnings barely changed despite base pay roughly doubling. Tips fell sharply after delivery apps passed higher costs to consumers through new fees—DoorDash added a roughly $5 "regulatory response fee" and Uber Eats removed tipping options at checkout—offsetting more than one-third of the base pay increase. Existing drivers also completed 20% to 30% fewer monthly deliveries as competition intensified, with wait times between tasks nearly doubling from pre-policy levels. The economists conclude that gig markets absorb wage regulations differently than traditional employment because new drivers freely enter the market, competing away gains until benefits equalize through longer task gaps. Their findings suggest direct per-task pay regulation alone is unlikely to sustainably raise gig workers' earnings without limiting the number of active drivers.