Seattle Law Mandating Higher Delivery Driver Pay Is a Disaster
reason.com
reason.com
Thats why route delivery (like grocery/elderly meal delivery/lunch runs) can keep the costs down.
Truck drivers are also having lots of issues with lowering incomes also, and corporations are trying to push the expenses on them. Another area you need to look at the entire model and figure out how the truck driver makes money and what is hurting them. (dispatch services, gas prices, insurance, lines, etc)
Long wait times are hurting many delivery type services with rising expenses.
The Seattle ordinance doesn't call for per-order fees! It requires minimum per-mile and per-minute rates, along with a per-offer minimum of $5. An "offer" is "one or more online orders presented to an app-based worker as one opportunity to perform services for compensation that the app-based worker may accept or reject."
Delivery companies have long had the opportunity to optimize and batch deliveries to reduce costs. The ordinance only further incentivizes them to do so! Adding extreme per-order fees is not something they're being forced to do, but is more of a punitive response to the legislation instead of building more efficient and sustainable systems.
https://seattle.legistar.com/LegislationDetail.aspx?ID=55448...
But i wouldnt say the bill is the only cause of hardship, inflation has hit everything from doubling car insurance, and the companies costs for employees is probably a big issue also.
>> On cue, news stories started popping up of $26 coffees, $32 sandwiches, and $35 Wingstop orders in which taxes and the new fee comprised nearly 30 percent of the total.
If people aren't leveraging below-minimum wage labor to get a single coffee delivered by a driver, whatever will we do?
There was a time before food delivery apps, and it was better.
This is such weird revisionist history. Was it really better to always have to walk to the restaurant, place an order, wait 15-30 minutes, and then walk home with cold food? Were people magically unexploited in 2010 because apps didnt exist yet?
Apps to order food efficiently are fine. Everyone wins. It's easier for the restaurant, it's easier for you.
Having food delivered to your door, however, is incredibly expensive. A lot of the cost has been masked: for a while paid-in-part by VC-style below-cost funding hoping to for winner-take-all success, and by giving drivers no benefits & terrible pay.
Thank you for reminding me about the browser wars 25 years ago. People were scratching their heads at the time about how internet companies like Yahoo and Google were making money, despite not having clear income streams. In the end, what? Advertising and our data.
I’ve been working in the food service industry for the past 15 years. Back in the day I was scratching my head at the rise of delivery apps, mostly wondering how a business can be making money with 20-25% of the sale price as cost to participate. Now, we see it’s volume and low income delivery.
The scam was getting them to use their own vehicle without mileage fees for depreciation. But even that’s gone now with lots of pizza places having a fleet of delivery vehicles for the drivers.
To your snarky meta-point, yes, having people learn the market rates for labor is a good lesson. It’s really good for teenagers who don’t actually need the money because it’s about the lowest risk hands-on way to figure out that life is harsh to people who have limited skills for where society pours its money.
When every restsurant delivers separately, and the delivery agent isn't based at that restaurant, the economy of scale vanishes.
It seems like everyone was in on the take otherwise someone would have put an end to it vokuntarily
How were they getting screwed exactly?
I can totally survive without a $35 fast food order. Can they?
You don't have a fundamental right to having someone else pick up your latte.
Food delivery has very little economic value. Yes it saves you a small amount of time but the people doing it aren't somehow more efficient at it and their labor can't then be allocated to anything that does provide an efficiency.
If you want to reduce the amount of time it takes you to get food you should stop fighting mixed zoning and start supporting the construction of walkable communities.
The problem isn't that there aren't enough people willing to make slave wages to hand deliver a burger to you, it's that the burger is in a strip mall five miles away across an eight lane highway.
Hard truth: running over people you deeply hate with your car isn't ok.
For the record, them being more efficient at it than you has nothing to do with it. This is one of the insights of economics that many people don't know about - the principle of comparative advantage.
> You don't have a fundamental right to having someone else pick up your latte.
People should have a fundamental right to agree to a business transaction without it being anyone else's business. If someone wants to pick up my latte and I want to pay for it, it's our fundamental right to agree to that exchange.
> If you want to reduce the amount of time it takes you to get food you should stop fighting mixed zoning and start supporting the construction of walkable communities.
Eh. Maybe that works for some cases, but food delivery is still important in many situations - people who have mobility issues (handicaps or just age), people who have kids and can't just walk around with them easily this second, etc.
Maybe the law is just disguised as improving driver pay but the real objective is to decrease traffic congestion.
If that is the real reason then I support it. If it’s an unintended effect then I’m against.
I daresay if this were a federal regulation evenly administered -- like, say, the 32-hour workweek Sen. Sanders is proposing -- corporations would more likely expend some capital to keep prices reasonable enough to stay in business.
Sanders is effectively proposing a 25% raise for everyone. That will definitely destroy a lot of these businesses.
You might say “good riddance, they weren’t good businesses anyway”, which is a fine political opinion. But don’t pretend everyone can drop their work hours by 20% and not have a huge impact on what we produce as a society.
Unless Bernie has a mandate on dropping demand by 20% as well, a bunch of businesses will be destroyed.
The right answer is that there's just not enough value in these delivery jobs to ever be enough to support even a lower-middle class lifestyle.
There is a zero-sum amount of value you can extract from a marginal order, and when you exceed it, you get the effect that is described in the article - e.g. people boycotting $32 fast food meals (or whatever it was) and demand collapse.
The difference, of course, is that my order wasn't the only thing on the boat. There were probably dozens of shipping containers full of stuff. Even the last mile, it was on a UPS truck, with dozens of other packages. Huge economies of scale mean low overhead per item.
I think this warps our perception of how much a delivery driver should be paid. Frankly, I'm amazed that delivering a single cup of coffee, to a single customer, where the driver had to drive to the store, buy the coffee, drive to the customer, and drive back, can even be done for that cheap really.
"But it was so much cheaper, and the drivers were making so much more money before this stupid law was passed!" you might say.
We'll.....I wonder whether they were really tallying up all of the externalities. E.g. if I fill out an expense report for a trip where I had to drive, I get comped 75 cents a mile for gas, insurance, wear-n-tear on the car, etc. If a driver has to drive 5 miles to the store, 5 miles to the customer, and 5 miles back to home base, that eats up a fair bit of the $26 right there. And that's before the driver even bought the $7.50 grande latte.
When the article reports the utopic amounts of money they were making pre-bill, I don't think either the reporter, or even the drivers themselves, were properly discounting those figures to reflect the true costs. Not to mention that venture capitalists are also subsidizing those prices, because they want keep prices low so they can expand fast enough to get a network-effect lockout of other competitors.
The article deftly deploys some fine rhetoric borrowed from bleeding heart liberals--"think of the elderly who are relying on these deliveries!! Think of the CHILDREN!!!" But yeah, not that long ago everybody was doing without delivery services, and we didn't even notice that we didn't have it.
I guess it would be nice if there were a permanent underclass, who you could afford to hire for this kind of thing. If you weren't in the underclass, of course.
It’s amazing how throwing all kinds of computing power and fancy apps at the problem has made the process so much less efficient than when someone picked up the phone and called the restaurant and food would show up at their door.
Delivery used to be primarily (not exclusively, but primarily) pizza.
Pizza is a special, nearly optimal case for delivery because it translates to small volume, lightweight, uniform, packing efficient, equal temperature containers enabling a single driver to carry enough product for a large number of endpoints while maintaining the temperature and quality of the food. These conditions do not apply to most food options, and are critical to the cost efficiency of pizza delivery.
You say that like its a bad thing :-)
> all worse off than before.
Let's stipulate, for sake of argument, that is true. Coffee shop owners are selling less coffee, delivery drivers are getting paid more per hour, but get less hours in, and erstwhile customers can no longer afford hand-delivered coffee.
Further stipulate that its this bill which us the cause.
The question is, wouldn't all of that happened anyways? The bill might have made it happen now, and not 6 months from now. But can you show everybody was not just living in a fool's paradise?
I know it's unusual these days to make public policy based on calculation and not ideological conviction, but lets do some math. If a driver is making $20 an hour, and it costs him 75 cents a mile to drive his car, how fast, in MPH, can the driver go before just running the car uses up the entire $20? I calculate 20/.75 = 26.7 MPH.
So anybody driving at over 30 MPH is already wearing their car out faster than they can earn money to maintain it. 6 months later, there will be no money set aside for replacing the tires. When the break pads are worn away, well, just hope that the calipers digging into the brake discs can keep you going. And we'll just hope the timing belt--which should have been replaced 50k miles ago, doesn't break, or we'll have to pay for an engine rebuild.
Seriously guys in what universe does it make any sense that you can get coffee hand-delivered to your house for a few bucks extra? If something looks too good to be true, that's because it is too good to be true.
You could often get $0 delivery charge, with no order minimum.
Food delivery as an external service from anywhere has poor coordination. Many restauarants don't get enough orders to have a batch delivery. Many food items need to be eaten right away, so the driver needs to idle at the restaurant for best service, which kills efficiency.
What kind of monsters do you know?
The difference is the Universal Postal Union. China gets preferential treatment including $1 terminal fees and the ability to subsidize the cost for export. It’s only cheap because everyone else is required to pay more than their fair share.
Sounds a lot like food delivery.
I see myself as very liberal, but this sounds like quite a straw man. What do I think of people deleting DoorDash, et al, en masse? "Good". Very good.
It's a wasteful racket.
Let alone dealing with the entitlement of some of the drivers who think that they deserve special treatment at stores and restaurants because they're "on the clock", or "late", or whatever. A non-trivial amount of times, I've had them ask to cut in line (or just straight attempt to), or serve up attitude to servers and other customers alike just to get back to the "hustle".
Once all of the Really Smart People are done bethinking themselves smarter than the market, voters can hopefully overthrow the RSP clique and get back to having, you know, an economy.