Instacart May Stop Service If Seattle OKs Hazard Pay Fee

Seattle’s City Council is debating a bill to force eCommerce ordering and transportation platforms like Instacart and Uber to give drivers at least $5 “premium pay” for each trip made during the pandemic and until as long as 2023. Now, Instacart is threatening to halt operations there rather than pay up.

“If this measure passes, Instacart may not be able to sustainably operate in Seattle,” Instacart said in a statement to PYMNTS. “It’s unfortunate that the Seattle City Council has chosen to introduce this misguided legislation in the throes of a global pandemic, a widespread economic crisis, and civil unrest in the city.”

City Council member Andrew Lewis said in a press release announcing his support for the measure that “frontline workers across the country, from medical professionals to grocery store workers, have received hazard pay to compensate for increased exposure to coronavirus during this pandemic. Our frontline drivers, from food delivery drivers to those who get us from A to B, should also be recognized for being on the frontlines of this pandemic.”

The proposed legislation calls for companies to pay the $5 bonus until the City Council either repeals the measure or until March 3, 2023, the third anniversary of Seattle Mayor Jenny Durkan declaring COVID-19 an emergency.

But Instacart in particular is taking a hard line against the idea, threatening to pull up stakes from the Emerald City if it becomes law.

The debate comes as consumers are buying more online than ever before. Growing numbers of consumers surveyed by PYMNTS report buying online, which presumably involves delivery. Approximately half of consumers we polled (48.2 percent) have shifted more of their shopping online, and 63.3 percent say they’ll maintain some of those digital behaviors even after COVID-19 passes. More than two-thirds (67.4 percent) specifically endorsed order-ahead for delivery services.

The Seattle proposal also comes as “‘Big Tech’ has become a code word for ‘Bad Tech’ among some politicians, regulators and the media,” as Karen Webster recently noted.

But Instacart vows it’s not going down without a fight. The company warned in its statement to PYMNTS that “with one careless vote, the City Council could eliminate the only way of getting 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.”