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DoorDash raises fees due to minimum wage agreement

DoorDash raises fees due to minimum wage agreement
DoorDash raises fees due to minimum wage agreement

DoorDash’s warnings about “significant consequences” for everyone who uses the platform have become a reality. In recent months, the food delivery app has been raising concerns about the proposed new minimum wage law that would hit customers. 

In December, the company warned that the regulations will “significantly increase the costs of facilitating delivery in NYC.” That has now finally happened. 

DoorDash has raised its fees for deliveries in NYC as it’s financially unable to avoid the impact. The company has confirmed to Business Insider that all customers in this area will start feeling the impact when ordering food. 

Regulations by lawmakers

According to Bloomberg, new laws in New York City designed to protect gig workers intend to bring delivery drivers up to a minimum wage. Rather than earning money per job fulfilled, gig workers will be compensated on a time and distance basis. Workers will now be paid per hour instead of per trip completed in major cities. 

ALSO READ: Food delivery drivers to be paid by the minute

In NYC the new law forces online food delivery companies to pay a minimum of $17.96 per hour or 50 cents per minute before tips to gig workers. 

The latest available data from the Becker-Friedman Institute stated that in 2021, the gig economy grew by 3 million people. There is a healthy appetite for this kind of worker but a growing concern about labor regulations.

While gig workers see this increase in the minimum wage as a victory for the industry, DoorDash believes there is no other way but to pass the increases on to customers. 

SuperMarketNews is reporting that the specific amount of the flat fee varies based on the area. 

Minimum wage in Seattle

In a statement last month, DoorDash announced that workers who deliver in Seattle will now earn at least $26.40 per hour (at time of publishing). This rate excludes tips, allowing them to make more than the minimum wage. “Dashers who earn below the required minimum will receive a pay adjustment,” says the company. 

To help cover all the costs, the delivery app is “reducing the suggested tip amounts on each order.”

“We know tips are still an important way for consumers to show Dashers their appreciation, and consumers will still have the option to tip any amount they choose. As always, 100% of a consumer’s tip goes to the Dasher,” it says, to address all possible customer concerns. 

Under the new law, Top Dasher status will no longer benefit Dasher offers or earning potential in Seattle. “Additionally, we will be terminating our Priority Access program for Seattle Dashers, which gives Dashers who have high ratings priority on higher-paying offers.”

DoorDash maintains that the “major policy shift is unprecedented.” It’s however confident to work with the communities to review the changes to accommodate customers. 

About the author

Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.

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