By Taylor Soper | GeekWire.com
Seattle-area gig workers are making higher hourly wages while they’re delivering food for platforms such as Uber Eats and DoorDash following the implementation of a new minimum wage law. But they’re also getting fewer tips, and consumer demand has likely fallen.
Those are some takeaways from data provided to GeekWire from Solo, a Seattle-based software startup that helps more than 250,000 independent contractors manage their earnings.
The controversial law went into effect in January and set a minimum per-minute and per-mile amount for app-based workers delivering for tech platforms.
The companies responded by adding substantial new fees for consumers — $5 for each order — and say demand has fallen substantially in the subsequent weeks.
Data from Solo shows that the number of active workers on these platforms fell by around 15% in February, compared to the year-ago period, showing that consumer demand has likely indeed fallen in Seattle.
Hourly earnings are up 8%, Solo said, with base pay — calculated by time and distance — up substantially, by 38%. But tips are down 16%.
“This would suggest that due to the new law, companies are loading most of the required pay into the distance/time calculation for orders,” Solo CEO Bryce Bennett told GeekWire. He said tips typically make up around half of total earnings.
Uber and DoorDash adjusted tip mechanisms in their apps after the law went into effect — for example, lowering the suggested tip amount or moving the tip prompt to after an order is completed.
Bennett noted that January and February are typically slower months for food deliveries.
One caveat to Solo’s data is that it comes from drivers in the Seattle area, not just within city limits where the law applies (though Uber was also adding the fees outside of Seattle).
Uber published a blog post last month with new data showing a 30% decrease in order volume over a six week period in Seattle. DoorDash said it saw 30,000 fewer orders in a two-week period since the law and its new fees were implemented.