SEATTLE — A Seattle City Council committee advanced an ordinance Wednesday that would charge app-based companies like Doordash and Rover a 10-cent fee per order to help fund new labor standards.
The fee implemented with CB 120706 is estimated to generate at least $2.1 to $3 million per year and would help fund the Office of Labor Standards (OLS) regulatory costs for implementing app-based labor standards. The labor standards include two newly passed first-of-their-kind legislation that requires companies to pay gig workers minimum wage and give 14 days' notification of deactivation.
The original proposal considered a tax but was changed to a fee. The change was made so the revenue created would only be used for what the legislation intended instead of going into a general fund.
The ordinance caused confusion among Seattle residents in October, according to Google trend data and Reddit posts, after Instacart sent an email to its users that a tax on groceries would be in violation of state law. Orders for solely groceries would be exempt under the ordinance.
The fee is for companies to pay, although council members admitted that it's likely the companies will pass the fee onto their users.
The ordinance was passed out of committee in a 7 to 2 vote and will be in front of the full city council at a later date. The fee would be implemented Jan. 1, 2025.
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