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Seattle Debates ‘Premium’ Pay for Grocery Delivery Workers

Seattle Debates ‘Premium’ Pay for Grocery Delivery Workers
Target and other retailers are trying to better reach more shoppers via delivery services such as Instacart.

The pandemic has made frontline workers out of food retailers and grocery delivery drivers. But an effort in Seattle to mandate premium pay for those drivers has already run into serious resistance from Instacart.

A bill before Seattle’s City Council would require those delivery services to pay $5 per delivery or trip, a program that could last as long as March 3, 2023.

“Gig workers working for food delivery network companies and transportation network companies bear the brunt of the time and expenses necessary for cleaning and disinfecting equipment and engaging in other efforts to protect themselves, customers, and the public from illness,” according to the bill, CB 119799. “Premium pay, paid in addition to regular wages, is an established type of compensation for employees performing hazardous duty or work involving physical hardship that can cause extreme physical discomfort and distress.”

Hazard Pay Programs

As of Monday afternoon, the bill was on the agenda for Monday’s city council meeting, scheduled for 5 p.m. EDT. The move to offer such pay comes as some food retailers either have pulled back or extended their own premium pay pandemic programs for their own workers. Additionally, the bill represents part of a larger fight between gig economy companies and local and state governments over how to better protect those employees, and how to classify the nature of their labor relationships.

In Seattle, “the legislation prohibits companies from passing the $5 premium pay onto customers,” according to a statement from two council members who introduced the proposed law in late May. This proposed pay would be “separate and apart from drivers’ regular pay, commissions, bonuses and tips. When providing the premium pay, hiring entities would include notification of online orders that qualified for the pay and itemize the pay separately from other compensation.”

Instacart Opposition

While the law would apply to more delivery providers than just Instacart, it has reportedly come out hard against the proposal, including sending of opposition messages to local customers. Uber and Lyft also have expressed opposition, though Instacart has apparently taken the lead in saying such a law could cause reduction of services in Seattle. In a statement made to GeekWire, for instance, Instacart said “the City Council could eliminate the only affordable and accessible grocery and prescription drug delivery service in Seattle, take away flexible earnings opportunities for 5,500 people, and threaten the economic future of more than 90 neighborhood and regional stores trying to serve customers.”

Home delivery of food and groceries keep expanding during the pandemic, with perhaps the most recent example coming from CVS, which now works with DoorDash to offer same-day home deliveries of health, beauty and wellness products. As that happens, consolidation continues in the broader food delivery space.

As for San Francisco-based Instacart, it recently won $225 million in funding to scale its operations as it races to keep up with unprecedented shopper demand for online grocery. Instacart’s share of grocery pickup and delivery sales jumped to 55% in the third week of May, up from about 30% in February, according to research firm Second Measure. According to Instacart, its order volumes have surged as much as 500% over the past few months as shoppers have migrated to shopping for groceries online during the pandemic.

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