Bill requiring premium pay for gig workers seems poised to move ahead, with changes

After several weeks of delay while negotiations occurred in the background, a bill that would require some companies employing “gig workers” to provide premium pay seems poised for approval tomorrow — after some significant rewriting.

The original bill, introduced by Council members Lewis and Herbold in late May, required TNCs such as Uber and Lyft as well as food and grocery delivery companies such as Postmates and DoorDash to pay $5 per trip extra pay for their “gig workers” in Seattle for the duration of the COVID-19 civil emergency declared by Mayor Durkan. The $5 rate received pushback from some stakeholders for being too high, and also for overlapping with the effort already underway to establish a minimum wage for TNC drivers.

On Monday afternoon the bill is back before the Council again, with two proposed amendments.

The first is a substitute version of the bill that makes several substantial changes:

  • It removes TNC drivers from the list of eligible gig workers; the bill would only apply to food and grocery delivery drivers.
  • It reduces the premium pay to $2.50 per trip, with $1.25 for an additional pickup or drop-off locations.
  • It adds a new section (restructuring a previous one) that prohibits some forms of retaliation/response by the companies, including reducing or otherwise modifying its areas of service in Seattle, reducing a driver’s compensation, or limiting a driver’s earning capacity by restricting access to online orders. However, this raises a question as to how a company could respond if it find that with the new premium pay requirement it can no longer profitably operate; would discontinuing service in Seattle entirely violate the prohibition on reducing or modifying its areas of service?
  • It requires the companies to provide their workers with a notice of their rights under this bill.
  • It adds remedies and penalties that the Office of Labor Standards could assess for violations.

The second amendment, proposed by Council member Morales, would prohibit the companies from adding customer charges to online orders for delivery of groceries. From simply the perspective of keeping a necessary service affordable — many people vulnerable to COVID-19 are dependent upon having their groceries delivered right now — this makes sense. But again, it raises questions about whether the grocery-delivery companies can operate profitably if they can’t pass through to customers some or all of the “premium pay” they would be required to pay. Last month the Council passed another bill capping the fees that delivery companies can charge restaurants. In a business where, at least for the moment, there is plenty of competition between companies that should keep prices competitive, there is reason to question whether caps on fees are necessary. It will be interesting to see whether Morales provides any analysis of the price that delivery companies are charging, and how much they are currently paying drivers, in Seattle. The fact that it wasn’t rolled into the substitute bill suggests that there may not be consensus support for it.

The Council is scheduled to vote on the amendments and the bill on Monday afternoon. It is written as emergency legislation, which will require seven of the nine Council members to vote for it, as well as the Mayor’s approval. If approved, it will go into effect immediately and could not be overturned by a voter referendum.

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