Seattle's Delivery Minimum Wage Failed Drivers and Raised Costs

Increased hourly rates corresponded with lower tips and fewer orders to share between drivers, leaving gig workers no better off than they were before the law passed.

In 2022, Seattle became one of the first cities in America to pass a minimum wage law for food delivery drivers. The law went into effect in 2024, and the results were nothing short of calamitous. Food orders plunged to unprecedented lows, delivery costs exploded, and driver earnings appeared to crater.

Now, new research on Seattle's delivery driver minimum wage ordinance shows that the law had no long-term effect on driver wages. And yet, Seattle's city council shows no signs of changing course, even with higher consumer costs and zero growth in driver pay.

Seattle's delivery minimum wage currently sits at over $26 per hour—higher than the city's general minimum wage, which will reach $21.30 in January 2026. In the first few weeks after the new minimum wage was enacted, DoorDash reported a decline of 30,000 orders, while UberEats saw a 30 percent drop in order volume. Reports indicated that drivers were earning less than half of what they had prior to the ordinance's passage.

But what was once merely anecdotal evidence now has hard economic facts to back it up. In a National Bureau of Economic Research working paper, researchers from Carnegie Mellon University unpacked the Seattle experience using cross-platform, task-level data that allowed them to track individual drivers over time.

While finding that per-task base pay doubled under the new wage, researchers also saw a corresponding decline in driver tips and a reduction in the number of tasks completed by each driver. As a result, within one month of the law's implementation, the most active drivers had experienced no increase in monthly total earnings, according to the researchers. There was also evidence of increased wait times between tasks and more idle (i.e., non-earning) time spent by deliverers.

The researchers conclude that in a labor market with free entry—which is the case with gig-based delivery work, given that new drivers can always sign up and join a platform—increases in base pay are fully offset by these declines in tips and order volume.

There's some controversy around why driver tips fell, with many pointing to food ordering platforms moving in-app tipping options from appearing during order placement pre-ordinance to appearing after an order was placed post-ordinance. Although it's likely this response did impact overall tip levels, increasing the minimum wage nearly always leads to a reduction in tipping in tipped-wage occupations, including for delivery drivers and restaurant workers.

Other cities that have experimented with minimum wages for app-based delivery drivers have seen results similar to those in Seattle. For instance, New York City's delivery minimum wage led to a 10 percent spike in delivery costs and a 47 percent decline in driver tips.

There was also an 8 percent drop in NYC's delivery driver workforce, as gig companies were forced to cap the number of drivers active at any one time in order to manage the suddenly higher labor costs. (For its part, NYC also recently passed an ordinance mandating that delivery apps provide at least a 10 percent in-app tipping option on all orders.)

As more and more economic evidence keeps rolling in showcasing the deleterious effects of its minimum wage, Seattle's city council has remained as recalcitrant as ever. A 2024 lobbying effort by the council president to reform and overhaul the minimum wage ordinance ultimately failed to pass and was quietly abandoned.