SEATTLE — Beginning Thursday, DoorDash said it will increase fees on long-distance orders in the Seattle area.
In a statement posted to its website, DoorDash said an additional $1.99 fee will be placed on certain long-distance orders. According to the company, the additional fee will be added to offset the costs of some of the most expensive deliveries under Seattle's minimum pay ordinance. In addition to the long-distance fee, DoorDash will add a $1.99 minimum service fee for orders from subscribers.
DoorDash called Seattle's app-based minimum pay ordinance "misguided" and said it demanded the Seattle City Council to make changes. The company said it continues to lose money in the Seattle market due to the ordinance, even after including a $4.99 regulatory response fee.
For the last six months, DoorDash said it held off on increasing fees while the Seattle City Council debated a compromise bill.
The Seattle City Council was scheduled to vote in late May on revisions to an ordinance that went into effect in January that raised pay for app-based delivery workers. At the last minute, the Seattle City Council decided to delay the vote due to wanting more time to review potential amendments and have more time to decide on changes.
The changes to the PayUp Ordinance the council was set to vote on would have decreased pay for app-based delivery workers from around $26 per hour to just below $20 per hour. It also would decrease their pay per mile driven, among other things.
Now it is uncertain when a vote will happen.
"It was our sincere hope that these additional fees could be avoided, but the City Council's inability to reach a compromise that would reduce costs, even marginally, has left us with few options," DoorDash said in a statement. "As always, we will evaluate the effects of these fees and react or make any future changes as needed to continue operating a sustainable and growing business in Seattle."
The original ordinance that raised the pay was passed by the former council. Six of the nine current Seattle council members were not a part of the vote.
The ordinance that raised the drivers’ pay went into effect in January. Some drivers said the increase has been beneficial and is needed. They said they saw a slight dip in orders when the ordinance first passed and consumers saw additional fees by companies, but now they are making more money.
But not all drivers feel this way. Since the pay increase resulted in companies like Uber Eats and DoorDash adding more fees for consumers, some delivery drivers said that resulted in fewer orders from customers and less money for them.
According to DoorDash, merchants earned $7 million less over six weeks, and consumers placed 300,000 fewer orders through February and March.