“I have to put in 70 or 80 hours a week just to get by. Each order only pays $4. Sometimes that doesn’t even cover our gas and mileage costs! All us workers want is fair pay. Not much, just enough to make sure we can survive in this city. Enough to live out the inflation and other economic impacts to us. Enough to have a bowl of cereal. Enough for the family, for ourselves, for Seattle.”
Introduction
The gig economy has grown rapidly in recent years, with numerous app-based platforms disrupting multiple lines of business and reaching multi-billion-dollar valuations. More than 16% of US adults report having done app-based work at some point, including 20% of Black adults and 30% of Latino adults. The pandemic sparked particularly rapid growth in food delivery; DoorDash is valued at $23 billion and estimate they are responsible for $1 in every $20 of US restaurant business. Uber’s food delivery business now represents more sales value than their core ride-hail business. Instacart is currently valued at about $24 billion, and filed to go public in May 2022. And Gopuff has collected $2.5 billion of investment capital over the course of last year and is valued at about $40 billion.
Seattle’s gig economy has also expanded rapidly: a 2021 study found that 11.2% of Seattle households have ordered app-based grocery delivery since the pandemic, and more than a quarter of households have used a restaurant gig delivery service. Many gig platforms also have a significant engineering presence in the Seattle area, including Uber, DoorDash, Gopuff, Amazon Flex, Rover, and others.
App-based platform work has also expanded well beyond food delivery. Companies like TaskRabbit and Handy offer a range of home-based services; Rover and Wag offer pet care services; and platforms like Poached Shifts and Wonolo offer gig-based staffing of dishwasher, warehouse, and other positions.
While each of these platforms operates somewhat differently, they all share a fundamental similarity: by classifying their workers as “independent contractors,” they’re able to evade all fundamental labor protections — most notably the minimum wage. Expenses which would normally be borne by a conventional employer — such as employer-side payroll taxes and the expense of operating a delivery vehicle — are instead shifted to workers, and not reflected in pay rates.
By classifying their workers as “independent contractors,” app companies are able to evade all fundamental labor protections — most notably the minimum wage.
There has been substantial public controversy over how gig workers are paid — and how much they earn. Past practices by which Instacart, DoorDash, and Amazon Flex misappropriated customer tips have been revealed and largely stamped out under intense pressure from workers and customers, but pay itself has remained opaque and is not well-researched. While app companies have significant data about customers’ pay, they do not disclose this data publicly and have not shared it for independent review.
The major app companies release this data only through their own citation of opaque “average hourly earnings” figures, which are inflated using several factors: reporting gross earnings that blend tips with pay, failure to account for the cost of mileage or any other expenses, and failure to account for all the time required to do the work. Aside from these corporate statements, data about gig workers’ actual earnings is scarce. Previous national data analyses conducted by the Pay Up campaign found effective hourly pay after basic expenses of just $7.66/hour for Instacart shoppers and $1.45/hour for DoorDash drivers. However, that data was sampled on a national basis and dates from before the pandemic, which prompted rapid growth of both customers and workers on the platforms.
As Seattle City Council considers implementing a pay standard for app-based workers, and public attention to the issue grows, we felt it would be useful to expand on existing data analysis by analyzing earnings across apps in Seattle’s gig economy. This report, the first such crowdsourced study of app working conditions in Seattle, confirms that pay rates are so low that Seattle gig workers typically take home well below minimum wage after expenses.
Our analysis of more than 400 job reports collected from workers for on-demand delivery apps, and an analysis of practices by worker-facing and public-facing marketplace app platforms, provides clear evidence that across the gig economy, workers’ pay falls significantly short of minimum wage.
Key Findings
⚠️ Average pay was $9.58/hour after accounting for basic expenses — just over half of Seattle’s minimum wage.
⚠️ 92% of jobs paid less than minimum wage.
⚠️ Average net pay for grocery delivery apps was $11.09/hour, and for restaurant delivery apps was $8.71/hour.
⚠️ Without Seattle’s gig worker hazard pay law, more than 1 in 8 delivery jobs would pay below $0 — in other words, they required more in driving and other expenses than they'd pay.
⚠️ About 1/3 of workers' earnings came from tips. But even if tips were treated as pay, workers’ net earnings would be below minimum wage.
⚠️ Marketplace apps like TaskRabbit and Rover also offer services at rates below minimum wage, and engage in a variety of practices to drive down pay.
⚠️ Raising pay to minimum wage after expenses would provide a direct economic boost of approximately $79 million annually for gig workers in Seattle — money that would be put right back into local business.
Across all on-demand delivery jobs, average pay was $9.58/hour after expenses — about half of Seattle’s minimum wage.
Calculating net hourly pay by factoring in the cost of mileage at the IRS rate and basic expenses at 13% of pay, the average delivery paid just 55% of Seattle’s $17.27/hour minimum wage. This figure accounts only for “engaged” time spent on the individual job, from when the worker accepted the job to when they completed it; it does not factor in the extra time associated with each job, like driving to a “hotspot” to receive offers, managing accounts, or contacting support. A thorough accounting of this “associated time” would reduce average hourly pay further.
92% of jobs in the sample had net pay below Seattle’s minimum wage, and no on-demand delivery app had an average hourly net that met minimum wage.
Net pay across all delivery apps was substantially below minimum wage, with 92% of all jobs paying less than $17.27/hour. DoorDash jobs represented the lowest average net pay per hour ($7.97/hour), followed closely by Grubhub ($8.11/hour) and Gopuff ($8.79/hour).
Average pay per job on grocery delivery apps was higher than on restaurant delivery apps, but required more mileage and time, resulting in average hourly net pay of $11.09/hour for grocery delivery and $8.71/hour for restaurant delivery.
Average grocery delivery pay per job ($13.08 gross per delivery) was significantly higher than restaurant delivery ($6.62 gross per delivery). However, the average grocery delivery also involved 78% more time and 29% more mileage than the average restaurant delivery. As a result, net hourly pay was $11.09/hour for grocery apps Instacart, Shipt, and Gopuff, versus $8.71 for restaurant apps DoorDash, Grubhub, and Uber Eats.
Without Seattle’s temporary mandated hazard pay, 99% of delivery jobs would pay below minimum wage, 71% of jobs would pay less than half of minimum wage, and more than 1 in 8 jobs would pay below $0.
Without the temporary $2.50/job emergency hazard pay required by the City of Seattle, 99% of delivery jobs would pay below minimum wage for engaged time after expenses. Additionally, 89.8% of restaurant delivery jobs and 54.5% of grocery delivery jobs would pay below half of Seattle’s minimum wage. And 12.5% of jobs would have net pay below $0 because the cost of mileage and other basic expenses would be more than the company paid for the job.
About one-third of workers’ earnings came from tips. But even if tips were treated as pay, workers’ total net earnings would still fall significantly below minimum wage.
This report focuses on earnings paid directly by apps and does not factor in tips, because tips are supposed to be a supplement to pay. However, even when analyzing total earnings including tips, pay still falls below minimum wage, with 53% of restaurant delivery jobs and 51% of grocery delivery jobs resulting in net earnings (company pay and tips) below minimum wage.
Marketplace apps like TaskRabbit and Rover encourage workers to offer services at rates that fall below minimum wage when workers’ expenses and total work time are taken into account.
Default suggested rates to workers on TaskRabbit for services including delivery and senior care fall below the minimum wage after factoring in workers’ basic expenses and the additional time they must work outside of direct job time. Rover allows for rates as low as $8/hour in gross pay for dog walking, and Rover’s suggested rates for drop-in visits come to about $15/hour in hourly net pay when a minimal accounting of workers’ basic expenses and time is taken into account.
Raising gig worker pay to minimum wage after expenses would provide a direct economic boost of approximately $79 million annually.
Using a conservative estimate offered by gig companies that the city's 40,000+ gig workers average 5 hours per week, raising pay from the current average of $9.58/hour to the minimum of $17.27/hour would result in an aggregate $79 million annual economic boost from the bottom up. A gig worker who currently has to work more than 72 hours to earn the equivalent of a full-time minimum wage job, could reduce those hours to 40 and maintain their income.
“The flexibility is important to me because we have two girls we need to pick up and take home from school, and I was also taking classes in community college. But the pay is impossible to live on. My earnings for the month of March were just under $1,230, and with my total costs of $671, I brought home less than $600 for the whole month.”
Overview of apps included in this report
Restaurant & grocery delivery apps
Marketplace apps
“I’ve been using DoorDash a lot more lately, but the pay is terrible. You’ll get orders that have you doing easily 40 minutes of driving, and you only get paid $5 or $6. I hear the companies say this isn’t meant to be a full-time job, it’s meant to supplement income. Whether or not that’s true for each individual, it doesn’t matter. I’ve been in both positions, relying on gig work as a full-time income and using it to make extra money on the side. Fair pay is fair pay, no matter the type of work we’re doing.”
