Yuan An, a PhD student in economics and technology at Carnegie Mellon University, said new research suggests that Seattle’s minimum pay rules for app-based delivery workers may not significantly raise earnings in practice, even as they increase delivery costs.
“Our findings are relevant to policymakers who want to raise pay for gig delivery drivers. If the market for drivers is indeed subject to nearly free entry, minimum pay policies will struggle to raise drivers’ earnings without imposing some form of entry barrier,” An said.
An made the comments in connection with a coauthored National Bureau of Economic Research (NBER) working paper examining the effects of Seattle’s App-Based Worker Minimum Payment Ordinance, which took effect in January 2024.Â
The study comes as cities and states consider minimum compensation standards for gig workers, part of a broader effort to regulate pay in platform-based delivery jobs that have become a growing source of flexible work for independent contractors.
In Seattle, platforms responded to the ordinance by adding roughly $5 in regulatory fees per delivery order. As a result, delivery prices in the city rose to about 93% higher per order than in comparable markets such as Portland. The higher costs were also associated with declines in order volume, raising concerns about affordability for consumers and businesses, according to DoorDash.
An is a PhD student at Carnegie Mellon University’s Heinz College. His research focuses on labor economics and public economics, with an emphasis on platform labor markets and how gig work compares with traditional employment structures, according to The Conversation.
