Gig economy in chaos as new wage laws meant to help app-based workers backfire

In an economy suffering from inflation, many families suffer from rising prices. But instead of fighting inflation directly, recent laws passed in Seattle and New York create new rules about how online delivery platforms, such as DoorDash And GroupPopThey are required to pay their workers’ wages. Meanwhile, cities like Minneapolis have passed new laws that restructure how ride-sharing apps operate Uber And Lyft Required to pay gig drivers.

These new laws aim to provide app-based delivery and ride-sharing drivers with livable earnings by creating a minimum wage rate for workers. But their drastic restructuring of the labor market has inadvertently placed huge costs on consumers. The end result is fewer orders, fewer job opportunities, and fewer local businesses.

As Seattle City Council members reconsider their delivery policy, other cities should think twice before passing similar legislation.

For consumers, especially those who live in expensive cities like New York and Seattle, even a small price hike can mean the difference between ordering and skipping a delivery.

The cost of living remains stubbornly low high After the pandemic, data suggests that even as the economy strengthens, many Americans feel so pessimist about their financial resources. While well-intentioned, strict new laws setting minimum delivery prices stretch household budgets.

As employees continue to return to their offices post-pandemic, the simple convenience of ordering delivery can be a lifeline for workers who find themselves overwhelmed. With new regulations, this relief may now be out of reach for many.

Not to mention, for thousands of people, affordable food delivery is not only convenient, it’s essential. Many disabled and older Americans, especially those who live alone, have difficulty cooking or driving to the store and rely on quick, simple delivery services such as Instacart Or Uber Eats for fresh ingredients and balanced meals. on half Many seniors living alone rely on a fixed income of less than $27,000 a year, and the additional fees could strain their budgets, putting healthy food options out of reach.

Customers are not the only ones affected by these new regulations. Local restaurateurs are raising concerns that rising delivery costs are causing fewer orders, cutting into their already thin margins. huge 98% Many restaurant owners are already reporting challenges due to rising costs, and partnering with delivery apps has proven to be a good solution Critical resource for business For many during the pandemic.

Since the coronavirus lockdowns ended, delivery services have remained popular, and restaurants have come to rely on delivery app orders as part of their expected revenue streams. But as potential customers are being deterred by new delivery fees, some… Restaurant owners They say they may have to raise their menu prices as well, pushing up dining costs.

And when restaurants struggle, Local economies do also.

The pressure of the gig economy

Despite new pay increases, app delivery workers face fewer opportunities. In fact, they appear to be worse off in some cases. Workers in Seattle and New York City see Less tips As consumers tighten their belts, some are reporting a drastic response discount In available work.

This is only for delivery workers. New wage laws for app-based workers also affect drivers in Minneapolis. There, ride-sharing apps Uber and Lyft have announced plans to pull out of the city all together due to new minimum wage laws that are sending prices skyrocketing. The unprecedented departure of ride-sharing apps could mean Loss of 8,000 jobs In the Twin Cities and fewer transportation options for Minneapolis residents.

App-based workers already face a crowded market Waiting lists For the opportunity to take an order and diminish Client. New wage laws are expected to stimulate more competition for delivery opportunities, crowding out workers already in the field.

We can and should focus on ways to improve opportunities for app workers. As lawmakers consider passing new wage laws, it is important to strike a balance, securing better earnings for gig workers while at the same time ensuring continued opportunities for workers and restaurants on delivery platforms.

Lawmakers across the country should learn from Seattle, New York, and Minneapolis and reconsider before hurting the people they want to help.

Adam Kovacevich is the founder and CEO of the Chamber of Progress, a center-left tech industry coalition that promotes the progressive future of technology. Chamber of Progress partner companies include Uber, Lyft, DoorDash and Grubhub.

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